Market Date: 4 June, 2020

Facing stiff competition, will Colombia's marijuana business go up in smoke?

A severe scent hangs in the air in the 15-hectare La Chacra medicinal cannabis farm in central Colombia, where marijuana plants blossom from the warm proximity of its enormous, heavily-secured greenhouse.

It is among the world’s most significant plants, but the plantation, run by cannabis firm Clever Leaves, has just managed to export a couple of marijuana derivatives due to the tight regulations threatening to invade Colombia’s ganja market.

Colombia was among the earliest countries to control the cultivation, commercialization and export of marijuana solutions. But companies that spent in cannabis complain waits in regulatory adjustments are coming exports and discouraging potential investors.

The issue is particularly serious given competition from several other Latin American countries such as Uruguay, they state.

Clever Leaves, that has investors in the USA and conducts the farm in the central state of Boyaca in addition to a sophisticated laboratory outside the capital Bogota, delivered 360 g (12.7 oz ) of dried marijuana to Canada in February — the first legal export of cannabis from Colombia. Back in July, it discharged an 6,000-bottle shipment of nutritional supplements to London.

Colombian-Canadian growers PharmaCielo exported a comparable amount of derivatives to Switzerland at roughly precisely the exact same period, after three decades in business.

“We would like if everything was faster, better, but we’re a sector that’s growing, setting up,” stated Clever Leaves executive Julian Wilches. “It’s going to take time.”

Colombia, among the world’s top manufacturers of illegal drugs, has complex regulations which need legal cannabis growers receive permissions from bodies which range from agriculture and medical governments to the anti-narcotics authorities and drug regulators.

Security regulations are rigid — requiring growers to own cameras, high electric fences round plants and normal contact with the authorities. The motion of plants into the laboratory is tracked by satellite and occasionally accompanied by bodyguards. Employees at the farm sign in using their own fingerprints.

Government take between 12 and 18 months to award licenses and growers should then wait between 6 and 3 weeks to become annual permissions that establish how big the plants and regulate the creation of derivatives, such as oils and lotions.

“Colombia took the initiative first, but today it’s recognized for taking way longer than people expected,” stated Juan Diego Alvarez, a Latin America executive in grower Khiron. “We’re in authorities’ hands, for them to finish the regulations.”

The government has defended its own advancement and stated there will be improvements in principles prior to the close of the month.

“Everything had to be learned, to be addressed,” Julio Aldana, the mind of the nation’s food and drug regulator stated in a recent occasion.

“The only way for this not to be a bubble is for us to do it responsibly,” Aldana said, speaking to this desire for the business to expand slowly.

Medicinal cannabis could finally earn $6 billion annually, which makes it Colombia’s third-largest supply of foreign exchange, the government has stated.

However, the export headaches are already harshing the mellow of overseas investors, who originally poured a few $400 million to the sector over three decades.

The threat is that companies will appear elsewhere in the area, to nations were export and production seem set to prove simpler, experts state.

“Before the feeling from investors was that there was enormous potential – they gave money to whoever had a license, but now they are evaluating more,” said industry analyst and adviser Alfredo Pascual. “Years have passed and they want to see results.”

Swift law in Uruguay, Peru, Mexico and maybe Brazil could erase Colombia’s first head-start, companies warn.

Uruguay lately made its own the very first commercial shipment of medical cannabis — 10 kg (22 pound ) of dried flowers with elevated levels of active ingredient THC destined for sufferers in Australia.

In Mexico the ultimate court has arranged the health ministry to issue regulations within six months on medical marijuana usage, stating its inability to do this after legalization at 2017 had put faith at risk for patients, such as children.

“Agro-industrial giants are nipping at our heels – I’m referring particularly to Mexico, Peru and Brazil, who know how to develop the agro-industrial sector,” stated Clever’s Wilches.

“Or we get it done or the others will do it and the opportunity will have passed us by.” (Reporting by Nelson Bocanegra Composing by Julia Symmes Cobb Editing by Chris Reese)