Formula for Success

Firms are turning to homeopathy legislation to sell cannabis treatments in Colombia.

By: Juliana Salazar

Developing a business in the Colombia’s highly regulated cannabis sector can often resemble a game of snakes and ladders in which a missing document or a minor omission can set a company back to square one. Over the last two years the most successful firms have been those that have battled through the cultivation and manufacturing licensing process but now the game is changing. Today the key question – in the absence of clear export regulations – is who can find the path to sales in Colombia’s domestic market.

PLANT DEFINITIONS: Companies have come up against an unexpected challenge. INVIMA, the national regulatory body, still classifies cannabis as a narcotic and not a medicinal plant. As such, the path to market used by most pharmaceutical companies is currently closed. In July, the Ministry of Health issued decree 1159/2018 which aims to simplify the sanitary registration process reclassify marijuana as a medicinal plant. This classification change has significant consequences since it will position cannabis-based products into the category of pharmaceutical products elaborated with medicinal plants (PMF). Sanitary registries for PMFs were recently simplified to standard legal and pharmaceutical requirements, and INVIMA now was 30 days to respond to the applicant’s petition. In terms of costs, according to the current values stated by INVIMA for 2018, sanitary registration costs for PMF products vary from 2.39 million COP (792 USD) to 2.7 million COP (895 USD) per product, depending on presentation. Medical trials required to obtain sanitary registrations may take up to 2 years, which positions sanitary registrations as a long-term alternative for cannabis companies.

Under current regulations, formulas magistrales can be commercialized without the need of an INVIMA registration

But companies on the cusp of production are impatient for this change to be confirmed. Even though the INVIMA registration scenario seems viable in a mass-production business model, if companies start launching products before the official change in status they may be accused of fraudulent production which is heavily sanctioned by INVIMA. Companies must also know that injectable products based on medicinal plants are not allowed under the recently issued decree, which may pose more problems than solutions depending on the company’s angle.

HOME RUN: However, Khiron Life Sciences and Colombian Cannabis SAS, recently acquired by Canadian Canopy Growth, appear to have found a clever solution. They are in the process of registering their products as formulas magistrales, the same classification scheme used for homeopathic medicines in Colombia. Under current regulations, homeopathic formulas magistrales must be specific-dosage products tailor-made by professionals for each patient, but they can be commercialized without the need of an INVIMA registration. Decree 1737/2005 allows for the commercialization of formulas magistrales at level I and II homeopathic pharmacies, dependent on a permit from the local Health Secretary and the oversight of a pharmaceutic chemist.

The process will allow firms to reduce costs and sidestep some bureaucracy. Companies are working hard to train medical professionals on dosage mechanisms but the requirement for patients to receive exact concentration levels of THC and CBD depending on the diagnosed pathology adds an extra step in the process that would not be required for mass produced, standardized products. There are also grey areas regarding the prescription of THC, still a controlled substance, under such legislation. Nevertheless, the formula magistral looks to be the best path to market in the short term.