Colombia is gearing up to become a leading international supplier of medical cannabis.
On Friday, President Iván Duque Márquez made modifications to Medical Cannabis Order 613, originally passed in 2017, to allow the export of dry flower for medical and research purposes, which was prohibited in the original legislation.
While the modification lifted the prohibition for exporting dry flower, in the coming months, government and industry stakeholders will discuss the creation of specific regulations for legal international trade.
With the recent changes, Colombia also allows medical cannabis to be distributed to a wider range of pharmacies across the country, as well as expanding the list of available CBD-based products.
“Today, Colombia has achieved a new stage for this sector,” Duque said after signing the order. “We had previous legislation — the 2016 [medical cannabis] law, the 2017 order — but this is the type of order that gathers integral modernity so that this sector turns into one of the engines of our country’s exportation development.”
The president signed the order while visiting the community of Pesca, home to one of the largest authorized medical cannabis production facilities in the country, owned by Clever Leaves Holdings Inc. (Nasdaq: CLVR).
“With this bill we are putting ourselves at the forefront in terms of regulatory competitiveness, at least in Latin America and the Caribbean,” Duque said.
Additionally, the order permits processing and packaging of medical cannabis in “free zones,” which gives companies certain tax exemptions related to exports.
It also addressed some legislative gaps, by suggesting that limits for low-THC products be competitive with other countries.
During his speech Friday, Duque proposed opening a National Cannabis Research Center (CeniCanna) to perform applied research on medical cannabis.
Recent changes only ‘beginning of the process’
PharmaCielo Ltd. (TSXV: PCLO, OTCQX: PCLOF) CEO Henning Von Koss, told Mugglehead via email that the regulatory changes mean a broader pool of clients and more international prospects for his company.
“First, the decree enables and expands the commercialization and industrial use of CBD as an input ingredient in health, wellness, cosmetics, and functional foods categories,” he said.
PharmaCielo, headquartered in Toronto, Canada, is a large operator in Colombia focused on processing and supplying medical cannabis oil extracts and related products to large-channel distributors worldwide.
While his firm will take advantage of the new regulatory changes, Von Koss says that they won’t come online overnight as this is only the beginning of the process.
“Indeed, the decree removed the ‘prohibition’ which now enables government and industry stakeholders to engage in consultation and define in greater detail what type of dry flower, as a final product, can and should be exported,” he said.
There are still many aspects that need to be addressed by the regulator and industry players before dry flower can be exported, continues Von Koss, explaining that the goal is to ensure sustainability of the industry without making cannabis an agricultural commodity, but a high-value product.
In 2016, Colombia legalized cannabis for medical purposes with its Medical Cannabis Law 1387. In 2017, Order 613 was approved allowing the commercialization and export of pot products, but only for derivatives like oils and other concentrates.
In his recent address, president Duque said the international cannabis industry will be worth US$62 billion by 2024, and he wants Colombia to be a key player.
He recently toured Khiron Life Sciences Corp.‘s (TSXV: KHRN) production facilities, and plans to soon visit PharmaCielo’s.
Despite that formal regulations haven’t been established, some companies have been exporting flower with government permission via legal loopholes and special permits. In 2020, Khiron started exporting its branded dried flower to the United Kingdom, and this year it started exporting to Germany.