Colombia's New Leaf

Last month, CCI was invited to speak at Cannatech Panama 2019 to present key insights, risks and opportunities in Colombia’s New Leaf: the Colombian medicinal cannabis sector.

By: Juliana Salazar

International analysts, investors, executives and medical professionals from around the world got together for three days to dive into the most crucial issues surrounding the international cannabis industry. Cannatech’s Panama 2019 edition officially began on Monday, February 11 with a welcome cocktail for attendees overseeing the colonial scenery at Panama City’s Casco Viejo.

All in all, the hosts created a formidable environment for business transactions to blossom.

There were plenty of booths for attendees to visit, as well as networking spaces and over 20 conferences on a diverse range of topics, from innovation to finance, regulatory policy and medical science. While former DEA agents pointed out the costs of illegality and importance of compliance protocols, service company executives focused on software customization for licensed producers and medical professionals analyzed the case for medicinal cannabis and cancer. With a host of different nationalities and market players, it was an open space that facilitated the exchange of knowledge and experience in diverse areas. All in all, the hosts created a formidable environment for business transactions to blossom.

In the hyped atmosphere of this nascent and developing industry, CCI gave a political and legal analysis of the trends, risks and opportunities for the medicinal cannabis industry in Colombia. Beginning with the birth of the industry and the current state of play, CCI editor Mat Youkee presented industry data collected by CCI regarding market players, corporate acquisitions and potential consumers in the Latin American market. The following legal and regulatory analysis included corporate consequences and risks of market entry strategies, as well as introducing the main government stakeholders, and making some brief considerations on corporate establishment and land acquisition under Colombian legislation. Subsequent political risk analysis covered macro-politics, security and regulation. He finished by drawing parallels with the mining sector – an industry that had experienced a similar boom in Latin America – and looked at lessons that can be learned.

The prospect of new Latin American jurisdictions coming on board with medicinal cannabis legalization, together with promising returns for licensed producers, service companies and pharmaceutical players was certainly cause for excitement at Cannatech. However, excitement must be tempered by realistic expectations, in this case all players, whether newcomers or deal sealers, need to be aware of potential risks arising from corporate decisions, all the way from export purchase orders to mergers and acquisitions.

In the Colombian cannabis space, there is a legitimate concern about potential regulatory modifications in license requirements, especially given the amount of licenses requested in the past year. Ministries may find themselves facing a bottleneck after the National Development Plan is approved in the following weeks. Questions regarding the future of exports and cannabis medicine registration are still open, and currently in hands of supporting entities such as INVIMA and the Ministry of Commerce.