Ecuador has legalized the cultivation of hemp, excluding it from the list of substances subject to the regulations of the country's Penal Code, placing the plant under the jurisdiction of the agricultural authorities. Ecuador's Ministry of Agriculture and Livestock must issue hemp regulations within 120 days of the enactment of the law that took place in late June.
Many of Ecuador's regional climates offer advantageous conditions for cannabis production, bringing in consistent and reliable harvests of the crop throughout the year and reducing investment in infrastructure in the early stage. Also, like other Latin American countries, the cost of labor in Ecuador is highly competitive compared to other parts of the world.
The regulation aims to regulate two varieties of cannabis: hemp for industrial use and non-psychoactive cannabis. The first is intended for industrial purposes, such as textiles, cellulose for paper, plastic parts, while the second is required in the pharmaceutical and cosmetic sector.
The Secretary of Agricultural Production of the Ministry of Agriculture points out that to enter and exercise this activity, a license will be required. These will be issued for different stages: import and seed production, planting and cultivation, germplasm bank, processing and industrialization, and export and marketing of biomass or oil.
To enter the business and obtain a license, the interested parties must present a business plan, the source of funds for the project, georeferencing of the lot, details of the purpose of production and the market. In addition, the applicant must have legal status.
For this regulation, Ecuador has been analyzing the cases of Uruguay, Colombia and the United States, to try to avoid problems that have been generated.
It is desired to promote productive and non-speculative regulation. Thus, Ecuadorian regulations do not want to allow the transfer of licenses if the company is sold.
Importantly, the new law sets the THC limit for hemp at a full 1.0%, following the lead of a growing number of countries that have set their THC barriers beyond the generally accepted global standard of 0.3%. Hemp plants with higher levels of THC generally contain higher levels of CBD, the most lucrative derivative of industrial hemp. Therefore, nations that adhere to the 1.0% standard have a market advantage in that sector over those where the limits are lower.
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