International companies interested in Ecuador’s promising cannabis market

As cannabis legalization makes progress in Ecuador, many international companies are starting to get interested in this new market. It is expected that this new legalization would bring many economic benefits to the Latin American country. It could open many new investment opportunities to companies all over the world, specially those from the US and Canada.

In the midst of the severe economic crisis that Ecuador is experiencing, in the medium term, it is possible to attract new investment to the country through the development of the medical cannabis industry.

An important starting point for progress towards that goal will be the publication of regulations related to the decriminalization of the cultivation of non-psychoactive cannabis products (hemp) for industry and medicine.

If you want to know more about cannabis, how cannabis legalization in Ecuador would bring a lot of new investment opportunities for international companies, and to find out the latest cannabis news, download the Hemp.im mobile application.

Several international cannabis companies eyed Ecuador

According to the Ministry of Agriculture, which is in charge of defining this regulation, it will be ready on June 21st. On that date, the deadline set by the reforms to the Comprehensive Penal Code expires.

Once the regulations are approved, this Portfolio will issue licenses for import and production of seeds, sowing and cultivation, plant breeding or research, processing and industrialization, as well as export and marketing of biomass or non-psychoactive crude cannabis oil.

The explanation was given on May 20th by Andrés Luque, Undersecretary of Agricultural Production of the Ministry of Agriculture, in a videoconference.

“Several companies, national and international, have shown interest in investing in hemp cultivation and industrialization in Ecuador. However, all are waiting for the regulations to be established, to formalize their intentions,” said Production Minister Ivan Ontaneda in an interview with this newspaper.

Investments in cultivation and industrialization can reach tens and even hundreds of millions of dollars, the Minister explained, depending on the development of this new sector. “It is a dynamic market that is growing rapidly; the projections are very favorable,” he said.

Companies from the US and Canada are looking to invest in Ecuador’s emerging cannabis market

Xavier Valverde Carcache of the Hoban Law Group, a law firm specializing in the cannabis industry, noted that so far there is early interest from companies especially in the United States and Canada. “We cannot establish an exact number until we have regulation and these investors can review the conditions, safeguards, and incentives to operate in our country.”

In this regard, Minister Ontaneda explained that hemp production will be classified as agricultural or agro-industrial. Therefore, investments in this sector will enjoy incentives for new investments: exemption from income tax and tax on foreign exchange, in the case of signing an investment contract in the country, as established in the current Organic Code of Production, Trade and Investment and Law for the Promotion of Production.

An important aspect that Valverde notes has to do with the areas or provinces where there may be more opportunities to undertake hemp planting.

That will depend, he said, on the variety of seed used, and the processes that allow for its adaptation to the country’s climatic conditions. “Ideal is not to mention exact areas to avoid speculation on land prices, which in Colombia generated many scams and damages,” he said.

Among the provisions to be issued by the Ministry of Agriculture and Livestock regarding authorizations for hemp planting and cultivation is that these economic activities will not be carried out in protected areas, primary forests, or located in border or beach areas.

__

(Featured image by Rick Proctor 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 Comercio, 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.