The emerging legal cannabis market in Colombia has a predicted value of $54 billion USD by 2025. Its potential to uphold the peace agreement, create jobs for rural farmers and boost the national economy is remarkable, although there are stubborn obstacles to progress. Natalia Garcia visited Huicanna, a sustainable medicinal cannabis grower and extractor based in Suesca, Cundinamarca, to find out more about the future of the industry in Colombia, and what stands in its way.
Colombia is often connected to the traffic of illegal drugs, but the country is usually considered to be an accomplice rather than a victim of the criminalised drug trade.
According to a 2015 report from the Observatorio de Drogas de Colombia, between 2010 and 2014 more than 1.5 million kg of cannabis was seized by Colombian forces. Consequently, great sums of military budget were redirected to prosecuting the drug market and many campesinos saw their crops destroyed. Crime, however, continued to rise as the drug trade remained illicit, and thus extremely dangerous for the many and extremely lucrative for the few.
But with minor developments and modifications to the legality of cannabis cultivation and trade, might we see an opportunity for Colombian farmers and entrepreneurs to overcome adversity?
In August 2017, the cultivation of medicinal cannabis was legalised. This was considered by many as a major step towards the plant’s decriminalisation. The bill sparked significant growth in the Colombian cannabis market, creating new job opportunities, foreign investment, and the potential for local agriculture to thrive in areas of the country with few economic incentives.
For some, legalisation signified that the government was constructively implementing the 2016 peace treaty. Although cannabis is not the main source of the drug conflict, its legalisation has pushed campesinos to decrease illegal cultivation and contribute to upholding the peace agreement, particularly its stipulation that the cultivation of illicit crops be replaced by sustainable alternatives – potentially medicinal cannabis.
What has happened in the four years since medicinal cannabis was legalised?
The emerging market has shown great potential for expansion. In fact, Asocolcanna, the Association of the Colombian Cannabis Industry, asserts that by 2025, the market could be worth $54 billion USD. This could make a significant contributution to tax revenue.
Cannabis derivatives such as oil concentrates of CBD, creams for external application, and CBD vape pens are among Colombia’s top export products. However, this new market has overwhelmingly benefitted foreign companies, particularly those from Canada, which make few contributions to the domestic economy. Meanwhile, numerous challenges face local farmers seeking to join the market.
Daniela Cappa is the CEO and co-founder of Huicanna, a sustainable Colombian cannabis company based in Suesca, Cundinamarca, about an hour from the capital of Bogota. Cappa explains that various obstacles make it almost impossible for local growers to progress within the market.
‘I can identify the three main problems around cannabis in Colombia,’ Cappa tells LAB. ‘First off, there are the bureaucratic barriers; second, the lack of national financial support; and lastly, the inability to export the dry flowers.’
Obstacles to producing legal cannabis in Colombia
Bureaucracy and institutionalism
The process for granting cannabis licenses is slow-moving. There are so many technicalities and normative requirements demanded by the government that it inhibits small, emerging industries from thriving.
Lack of financial support from national banks
If national banks do not collaborate by providing easily accessible loans and financial support to small industries, it is almost impossible to compete with foreign companies. These companies often have access to investors with huge sums of money, which can help speed up legal processes and further contribute to their dominant position in the Colombian cannabis market.
The cultural taboo surrounding cannabis in this primarily Catholic country means entrepreneurs face extra hurdles when trying to open business bank accounts. It is also more difficult to obtain loans for infrastructure and to qualify for insurance.
Failure to legalise the cannabis dry flower
The issue with being unable to export the cannabis dry flower is that by only exporting CBD and other non-psychoactive cannabinoid extracts, many potential market opportunities are lost.
For one, CBD is less profitable than THC, the psychoactive element in cannabis. Furthermore, Colombia exports primary products and concentrates of CBD, which are then processed by other countries into more profitable products, such as cosmetics.
Since recreational marijuana was legalised in California in 2018, the production of CBD as a primary product has shot up in the United States, leading to a decline in the value of Colombian CBD. Thus, the production of Colombian CBD is no longer as profitable as it once might have been.
Open letter to President Duque
Such is the extent of concern about the cannabis market in Colombia that in January of this year, associations like Asocolcanna, the Colombian Cannabis and Hemp Federation, and ASOMEDCAM (the Asociación Médica Colombiana de Cannabis Medicinal) wrote a letter to President Iván Duque addressing the need to legalise the exportation of the flower in order to diversify the market.
The letter addressed an almost paradoxical situation: the ban on the export of Colombian flowers means domestic producers cannot take advantage of Colombia’s competitively low cost of production and potential use of herbal cannabis in the global pharmaceutical industry. They emphasise that this ban deters domestic producers from cannabis cultivation, further strengthening the position of international growers in the global market while preventing potential growth in the Colombian economy.
Keeping Colombian campesinos out of the market means many still have to rely on illicit crops to survive. The peace agreement is once again thrown to the wayside.
What’s more, the open wounds left by narcotrafficking are not yet healed. Although the peace treaty sought to build trust, many Colombians disagree with any sort of mechanism which legalises drugs, for fear of returning to the times when drug cartels ruled many parts of the country. This poses a further issue to the cannabis industry – how to manage the public’s fear of corruption and drug trafficking?
A possible market for cannabis?
The problems facing the Colombian cannabis industry are ongoing. For instance, in September 2020, congressmen Juan Carlos Lozada and Juan Fernando Reyes tried to present a bill fully legalising cannabis both recreationally and commercially.
The congressmen asserted that the taxes raised by the industry could be redistributed to victims of drug trafficking, citing the peace agreement for support. Furthermore, they argued, it could support campesinos and farmers looking for new job opportunities.
By legalising cannabis, Lozada and Reyes said, drug cartels and the illegal market would be diminished. Their proposal was rapidly rejected by congress, due to supposed moral implications and fears of further drug trafficking.
The time the Colombian government has taken to institutionalise and legalise the different uses of cannabis comes amidst a crucial chance for the country to position itself as an industry pioneer. However, the bureaucracy is moving disproportionally slowly, prioritising cultivation licences for foreign companies rather than small local companies.
It’s hard not to weigh up the lost opportunities. Imagine if cannabis cultivation licences were awarded to indigenous Colombian populations, like the Aruahacas and Kogis in the Sierra Nevada de Santa Marta, who have traditionally cultivated cannabis for centuries as part of ancestral traditions. The local cannabis industry could use this knowledge to its advantage whilst helping both indigenous groups and small farmers to thrive in the international market.
By overcoming the difficulties of the cannabis market, Huicanna has shown resilience in the face of adversities facing the small growing company. By attaining the licence to legally grow cannabis, their company has provided job opportunities for the small town of Suesca and has contributed to the growth of the local economy. They actively seek to employ women, to diversify the sector, and provide positions in an environment mainly dominated by men.
Huicanna is currently working with doctors to provide medical consultations based in medicinal cannabis, as an alternative to traditional medicine. In the future, they hope to pioneer research in cannabis for medicinal purposes and to develop cannabis-based products to improve people’s well-being and health.
Lastly, by working to break the taboo campesinos hold against cannabis, there is an effort to shift the ideological discourse around drugs, to leave behind a Colombia haunted by drug trafficking, and to envision a future of economic progress that begins with the cannabis market.