New opportunities and new challenges
The last decade saw the birth of a new industry in Colombia, bringing with it the birth of hundreds of companies, the unstoppable march of regulation and a host of lofty venture investments.
By: Juliana Salazar
Colombia’s nascent cannabis industry continues to push through the regulatory and economic barriers to emerge on the global stage. 2019 brought regulatory updates, stock market fluctuation and the arrival of new jurisdictions, but also the first commercial export of CBD product to Europe, new magisterial formula rules and major steps forward in licensing and seed registration.
As we move into a new year – and a new decade – new challenges and opportunities will no doubt abound as the green rush continues.
SHIFT IN POWER: In December, INVIMA – who are already responsible for clinical trials and sanitary requirements – also took charge of granting fabrication licenses. This had been managed directly by the Ministry of Health for the previous three years.
From now on, the Colombian FDA- equivalent will be in charge of the licensing process with future LPs, as well as the sanitary permits for cannabis products in the domestic market. The upside of this is that it will unify requirements, and do so under the umbrella of an entity that has the human and intellectual resources to deliver. If cannabis companies are evaluated from day one by INVIMA, it will ensure they are on track with all the technical requirements and well placed to produce and commercialize cannabis- based products. The 4-tier entity has a reputation for being meticulous and stern – it will enforce high-quality standards and complex requirements. Companies planning product launches in the domestic market should be prepared for rigorous measures, but overall should expect some simplification in the process as it will be managed by the same entity.
LEVEL UP: Many players who have skin in the game will want to level up by applying for production quotas for psychoactive cannabis. With the ICA approving hundreds of CBD varieties as companies develop agronomic testing, the game is now on to show who can compete in the psychoactive space. Last year, Colombia made its first successful commercial exports of CBD products. And although the reduction of its INCB quota from 40 tons to 1.2 tons was widely reported, the truth is that this is the year for Colombia to prove that there is enough market for psychoactive products. Once the government grants its quotas during the first half of the year, with a magistral formula regulation fresh out of the oven and facilities ready to go, we expect to see a push in the domestic psychoactive market, justified by an INCB quota extension.
WELCOME ON BOARD: There’s been a notable trend of new Latin American countries joining the legal medicinal cannabis industry bandwagon over the past two years. After years of single- player Uruguay dominating the Latin American cannabis space, Colombia, Mexico, Peru, Brazil, Argentina, and Chile have all tagged along with novel approaches. Some LPs were concerned that the newcomers would overtake Colombia. But their concerns have been quickly replaced by the realization that new business and export opportunities are being born across the region. From seed banks to pharmaceutical-grade products, players have devised business strategies to supply neighboring countries and patients with cannabis- based products and solutions.
It remains to be seen how the strengthening of multiple compliance standards will pan out, but the likelihood for expansion has created a glimmer of hope. Especially when compared with heavily regulated first-world markets.