Legal & Regulatory

Cannabis legalization challenges in Colombia

While Colombia was an early mover in the race towards a legal cannabis market, regulatory and institutional hurdles are still holding the country back, preventing it from becoming competitive in the global cannabis market. The challenges include slow-moving bureaucracy, limited access to banking, and the additional certification requirements that the country's medical-only approach imposes.

The legalization of cannabis is a global trend. Its therapeutic and medicinal benefits are now undeniable. The world, and America in particular, is in a slow but irreversible race towards cannabis legalization.

A complex process kills Colombia’s early-mover cannabis advantage

But this process is slow, regulated at every step of the way, and still under construction. This brings tremendous challenges in our race to competitiveness in the global cannabis market. The coordination of so many government agents that figure in the industry – such as ministries of Justice and Health, ICA, Invima, and DIAN – implies a complex regulatory integration which, in Colombia, is coming at the price of losing the fundamental advantage it gained with the enactment of Law 1787.

To understand the dichotomy of the cannabis situation, in legal terms we must refer to the first norm of the Political Constitution of Colombia which, in its article 49, indicates that “the carrying and consumption of narcotic or psychotropic substances is prohibited, except for medical prescription.” Through sentences of the different courts and national laws, it has been sought to configure its legality. But it has taken us five years since the enactment of Law 1787 of 2016 to integrate the control entities for cannabis, each with its guidelines, to build an industry with growing global demand.

Can Colombia develop its legal cannabis industry to global standards?

Now, getting into the matter of what concerns us in this article: has Colombia reached the degree of legality that includes the entire production chain, which allows to competitively develop the cannabis industry under international standards?

It is not easy to answer. After almost five years of decrees, modifications, circulars, and concepts of all the entities, we could think that the legal work for cannabis has been completed. However, from our point of view, there is still a lot of work to be done. We will mention some of these institutional shortcomings that are holding Colombia’s cannabis industry back in terms of competitiveness.

Access to banking and seeds an ongoing problem for Colombian entrepreneurs

Access to banking is one of the first challenges for Colombia’s cannabis entrepreneurs. The dependence of banks on international standards and regulations due to their subsidiaries means that they do not allow the opening of accounts for cannabis businesses. The national bank and emblematic for the agricultural sector, the Agrarian Bank, also does not even have clear policies for account openings.

The second major challenge is access to certified seeds; so far 68 companies have managed to obtain seed licenses, which makes them the only ones authorized to commercialize and study them. The cannabis bubble in Colombia has inflated seed prices to unsustainable levels over time, with costs of $50,000 per unit and cuttings costing up to $5,000,000 taking small and medium-sized growers out of the market.

Medical cannabis raises regulatory hurdles

The third great challenge for Colombia’s cannabis industry derives from the fact that Colombia, with its decrees and laws, determined that the legalization of cannabis would be allowed for medicinal and scientific uses. Therefore, entrepreneurs in the industry must prepare themselves technically to obtain international certifications that endorse the process of planting and processing (CUMS-GAP, Global GAP, SGS Medical Cannabis Certification, among others) and that require very high capital investments to be obtained.

____

(Featured image by Saul Mercado via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Hemp.im, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in EL ESPECTADOR, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Hemp.im assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Hemp.im is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

Eva Wesley

Eva Wesley is an experienced journalist, market trader, and financial executive. Driven by excellence and a passion to connect with people, she takes pride in writing think pieces that help people decide what to do with their investments. A blockchain enthusiast, she also engages in cryptocurrency trading. Her latest travels have also opened her eyes to other exciting markets, such as aerospace, cannabis, healthcare, and telcos.

Recent Posts

Women Represent 61% of Home Cannabis Growers in the U.S.

A survey found that women comprise 61% of home cannabis growers, marking a diversion from…

16 hours ago

Denmark Proposes Making Its Medical Cannabis Program Permanent

Denmark plans to make its pilot medical cannabis program permanent following its success in treating…

2 days ago

Polish Lawmakers Petition Donald Tusk for Cannabis Decriminalization

Polish lawmakers have submitted a non-binding petition to Prime Minister Donald Tusk, urging cannabis decriminalization…

1 week ago

The UK Medical Cannabis Market: Growth, Diversification, and Opportunities

The UK medical cannabis market has rapidly grown since legalization in 2018, with private actors…

1 week ago

Alcohol & Cannabis: 60% of Cannabis Users Say It Helps Them Drink Less

A new study involving over 23,000 participants in New Zealand found that 60% of people…

1 week ago

French Interior and Justice Ministers Announce Measures to Combat Organized Crime

The French Ministers of the Interior and Justice announced a comprehensive plan to tackle organized…

2 weeks ago