Cannabis industry in Colombia: an investment opportunity
It has been 3 years since Cannabis was legalized in Colombia. Decree 613 issued on 2017, regulated the use of cannabis for medical and scientific purposes in the country. This norm established the rules, conditions, or obligations applicable to those natural or legal persons, of a public or private nature, of Colombian or foreign nationality and domiciled in the country, who carry out any of the following activities: import, export, cultivation, production, manufacture, storage, transport, commercialization, distribution, use of seeds for sowing, cultivation of the cannabis plant, its derivatives and finished products that contain it. The Ministry of Justice and Law, in compliance with Decree 613, enabled the technological platform called Information Mechanism for Cannabis Control (MICC), a tool that will be applicable to activities and / or licenses for the use of seeds for sowing, cultivation of psychoactive or non-psychoactive cannabis plants.
Since then, there’s been a huge interest in private investments in the industry. Facts:
· More than 656 licenses have been granted in the modalities of use of seeds for sowing (98), cultivation of psychoactive (164) and non-psychoactive cannabis plants (394)
· Approximately more than 171 licenses for the manufacture of cannabis derivatives
· 4191 registrations of small and medium growers, producers and national marketers of medicinal cannabis.
These figures only demonstrate the importance of this business and the opportunity it represents for the country. According to a study carried out in 2019 by Fedesarrollo, by 2030 the Cannabis industry could generate more than 41.000 jobs, from which 26.968 would be in the farming industry and the rest would be associated with the research and administrative area.
On February 20th 2021, the government issued a draft that gives free access to "safe and informed access" to the use of cannabis for medicinal purposes. According to the draft decree, it is established that the Government will authorize the export of the dried flower of cannabis for commercial purposes and so that companies do not dispose of the surpluses in each of their processes. This product in countries such as United States, Canada, Germany, Switzerland, Holland, Portugal, Israel, the United Kingdom and Australia, the dried flower is the most developed market segment of the plant and constitutes 50% of the sales of the companies.
The National Narcotics Fund (FNE) will monitor the manufacturing permits and those who obtain licenses must submit bimonthly reports to the Ministry of Justice within the first 10 business days of January, March, May, July, September and November of each year. A Technical Quota Group (GTC) would be created to carry out the examination, analysis, evaluation, recommendation, and follow-up of matters related to cannabis forecasts in the country.
So why in invest in Colombia?
· It has lower production costs thanks to its geographical position, environmental conditions, luminosity (12 hours of light and 12 hours of darkness), productivity (4 harvests a year), good supply of labor, ports and airport experience (flowers, fruits and coffee).
· Colombia is a pioneer in legal and institutional framework & it enables scientific and technological development, as it is intensive in R + D + i (Research-Development-Innovation) (Mintic).
· In 2019/2020 USD 2.8 million were exported to countries such as the United States, the United Kingdom, Israel and South Africa, among other countries (Pre-Colombia).