Nearly 15 months after President Juan Manuel Santos signed a decree that legalized the growing, sales, and export of marijuana for medical and scientific purposes, the process of obtaining the necessary licenses remains in a legislative limbo as the government hashes out the logistics of regulating a plant that has long been controlled by the black market.
The Ministry of Health, the agency charged with issuing licenses, has halted all applications related to medical marijuana “until further notice” while the Ministries of Justice, Agriculture, and Environment establish the specific procedures for implementing additional requirements imposed by Congress in May for companies seeking to launch medical marijuana businesses in Colombia. The new requirements, which Santos signed into law in July, include increased environmental regulations, hygienic standards, and ensuring that cannabis-based medications meet international scientific standards.
Though no companies have been granted cultivation licenses under the new rules, lawyers and business leaders consulted by The City Paper expect the government to start accepting license applications in the coming weeks. But by law, the government has until July 2018.
The Ministry of Health did not respond to multiple requests for comment.
“The bureaucracy to process these licenses is unprecedented,” said Cristián Avallaneda, a lawyer at Buritica Abogados, a Bogotá-based firm that is advising companies applying for licenses.
However, three companies — PharmaCielo, Cannavida, and Labfarve-Ecomedics — were granted extraction licenses before the Ministry of Health suspended the application process in July. But these companies are only authorized to “set up production plants, import machinery, construct laboratories, and conduct pilot trials with no more than 20 plants,” according to a communiqué from the Ministry of Health.
So far, the four ministries tapped with regulating medical marijuana have been drafting the rules for eight months. When they finish, four different types of medical marijuana licenses will be available in Colombia: extraction, cultivation, production, and exportation.
“It’s moving very slowly,” said Susan Farkas, founder of O.R. Supplements, a Florida-based dietary supplements firm that is awaiting to hear back from the government after applying for an extraction license six months ago. “The government is still writing the legislation and controlling everything, which is what they should do. The most important part for them is that we had a background in medicine and that our sole intention of extraction is for medical purposes.”
The same sentiment was echoed by Angela María Guzmán, distributor and spokeswoman for Sannabis, a subsidiary of Colombia-based coal mining outfit New Colombian Resources, Inc. “Right now the license is being processed,” said Guzmán. “We’ll have to wait and see how the government treats us smaller businesses. There are a lot of multinationals coming to Colombia to make money on this.”
Sannabis hopes to cultivate cannabis in partnership with indigenous communities in Caloto, Cauca.
After Santos’ decree in December 2015, Colombia became the third coun- try in Latin America to legalize medical marijuana. Chile passed its law in 2014, and Uruguay legalized recreational and medicinal use of the drug in 2013. Marijuana, however, remains illegal in the rest of Latin America although consumption of the drug has been decriminalized to varying degrees in Brazil, Argentina, Costa Rica, Ecuador, Mexico, Peru, and Venezuela.
Santos called the new rules “a major step that put Colombia at the vanguard and forefront of the fight against illnesses” during a signing ceremony for the decree.
The current law only allows for the cultivation of cannabis strains that are low in tetrahydrocannabinol (THC), the main psychoactive ingredient in marijuana, and limits production in Colombia to the extraction of oils from the plant. No dry leaves can be sold or exported.
Colombia’s move to legalize medical marijuana also marked a shift away from U.S.-backed drug policies and reflected a change in attitude toward drug use and the policies to eradicate narcotics production in Latin America, including Santos’ decision in 2015 to end 20 years of aerial coca fumigation.
Marijuana legalization in the United States, however, remains embroiled in clashes between state and federal laws. Although eight states have legalized the recreational use of the drug in recent years and 28 states have approved medical marijuana, the federal government prohibits the import of all marijuana-based products and currently classifies marijuana as a “schedule one” drug along with cocaine, heroin, and LSD—the most severe restriction for law enforcement.
But legalization of medical marijuana has largely been welcomed in Colombia. Authorities view it as an opportunity to boost the local economy and hope it will cut into drug trafficking proceeds by offering a profitable and legal alternative for farmers who grow illicit cannabis and coca crops. Researchers believe Colombia has an opportunity to transform itself into a world leader in medical research on cannabis given restrictions on conducting research on the plant in the U.S. And businesses project that the country’s climate, soil, and business-friendly environment make it a cheaper and more
natural alternative to growing the plant in hostile climates.
“In Colombia, cannabis could be bigger than coffee and flowers combined,” said Patricio Stocker, president and CEO of PharmaCielo, a Toronto-based medical marijuana venture. “That is what I told [Finance] Minister Mauricio Cárdenas. He probably looked at me like I was crazy. But Colombia has the potential to catch 20% to 25% of the world market.”
In June, PharmaCielo became the first company to be awarded a license to produce cannabis in Colombia. Since then, Stocker said the company has invested US$15 million to launch business operations in the country, including a 66-acre plot of land in Rionegro, Antioquia, where the company will grow and process cannabis. But the company is currently growing flowers there while it awaits a cultivation license. The company expects to invest at USD $100 million over the coming years.
“The cost of cultivating one gram of dried [cannabis] flower in Colombia is below five cents,” Stocker said. “In the U.S., it is between US$1 and US$3. On average, we see US$1.75. In Canada, it is around US$3. We project that the costs of cultivation in Colombia will be 60 times lower than in Canada and 35 times cheaper than in the U.S.”
Researchers also have high hopes for medical cannabis in Colombia. Javeriana University has started preliminary talks with O.R. Supplements. Farkas, a therapist, herbalist and founder of O.R. Supplements, has teamed up with Dr. Mike Cusnir, an oncologist and co-director of gastrointestinal malignancies at the New York-based Mount Sinai Medical Center who has worked with several Colombian hospitals.
“The Javeriana University is willing to work with us,” said Farkas. “There are so many fields that cannabis is useful for. The idea that we have this plant that is non-toxic, non-addictive, that can help with depression, anxiety, sleep, and ease pain, and the only reason we’re not using it is because of politics and economics is very sad.”
“The potential that Colombia has with medical cannabis is absolutely enormous,” said Farkas. “In the future, this is going to be an extremely important crop. Medicine is changing because of it. There are so many fields of medicine that are currently spending millions of dollars around the world for research on conditions like anxiety, PTSD, epilepsy, fiber myalgia, glaucoma, Crohn’s disease, and cancers.”
Farkas hopes to spend several years growing cannabis in Colombia, studying its health benefits and conducting human trials in partnership with local hospitals, such as the San Ignácio University Hospital. She said her initial research will focus on pain and inflammation. But eventually, she expects to export cannabis-based medicines to Florida, which legalized medical marijuana in November
The potential seems so great that the legal marijuana market in North American is projected to mushroom from US$6.9 billion in 2016 to US$21.6 billion by 2021, according to Arcview Market Research, a cannabis market research firm. And with Australia, Germany, Italy, and several other countries having legalized medical cannabis to varying degrees, the potential demand extends far beyond North America.
Although Colombia’s medical marijuana industry is currently in a holding pattern, business leaders and researchers remain bullish, hoping the country can take advantage of a unique opportunity to be a key country in the medical marijuana industry.
“Colombia, a country that was struck hard by the war on drugs, has an opportunity to be a world leader in the medical cannabis industry — if they do it right,” said Stocker.