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So you want to invest in Colombian cannabis? Here's what you need to know to get started

The cannabis market in Colombia is one of the most open and robust markets in the world. Although cannabis is not legal to consume in its flowered form, licensed derivatives in oil form for medicinal use are permitted.

Entrepreneurs in Latin America and beyond are already cultivating and processing medicine, not just for Colombia, but for the world at large. The country is setting itself up to be a major supplier of global medicinal cannabis.

Colombia’s comprehensive regulatory framework creates clarity for speculators in their cannabis market. PotNetwork outlines some initial steps to start your investment.

Who holds the rulebooks?

The legislation, which happened in two key stages:

  • First, Law 1787 in 2016, which legalized marijuana for medicinal and research purposes

  • Second, in 2017, Decree 613 provided an additional regulatory framework for the law and clarification for the deregulation

The law starts by yielding full control of cannabis and its derivatives to the State, including “the activities of cultivation, production, manufacture, acquisition in any capacity, import, export, storage, transportation, commercialization, distribution, use and possession of the seeds of the cannabis plant, of cannabis, of its derivatives and products.”

Ministeries across the government regulate different aspects of the cannabis supply chain. For investors looking to begin the licensing process, the Ministry of Health and Social Protection and the Ministry of Justice and Law hold jurisdiction.

For those interested only in processing medical cannabis, The Ministry of Health and Social Protection hosts an application on their website with a full list of fees and license types.

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If the firm wants to cultivate psychoactive cannabis, first it must apply for a manufacturing license and upon approval may apply for a psychoactive cultivation license from The Ministry of Justice and Law.

The justice ministry defines psychoactive cannabis as follows: if “the cannabis plant has a percentage of THC greater than or equal to 1 percent, in dry weight, you should apply for a license for cannabis cultivation psychoactive … cannabis plants with a percentage of THC less than 1 percent, in dry weight, may apply for a license to cultivate non-psychoactive plants.”

The application for licenses for “use of seeds for cannabis planting and crops for medical and scientific uses” is available on the ministry’s website along with helpful FAQs and additional information about the licensing process.

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Licenses are valid as long as the licensee continues to abide by the regulations, unless that person is a foreign national with a limited visa which, in that case, the license is only valid for the duration of the visa.

How to get a license?

Applicants must provide, in addition to the license application, citizenship information or immigration information, payment information, confirmation of income origin, tax number, union or consortium membership.

License for manufacturing

Building a cannabis processing plant is the most significant investment entrepreneurs make in the market. Not only do they require substantial capital, but they are an investment in that country’s economy.

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For entrepreneurs seeking a full seed-to-patient business and sales cycle, a processing plant for the dry flower is essential, as it is still illegal to consume medicinally or recreationally in Colombia.

Manufacturing licenses, to export, research, national distribution, and every combination of the three are available in 5-year or 1-year payment rates.

License for cultivating

Cultivation across Latin America is highly controlled and securitized as many countries continue to grapple with illegal cultivation.

To successfully apply, the applicant must provide a detailed “description of the fields and the area where the activities will be executed,” including information about “measurements and dimensions and corresponding photographic records.”

If the applicant does not own the property, they must provide documentation from the landowners providing permission for cannabis cultivation as a part of the application.

Other considerations for your emerging business

Before beginning the application process, investors need to determine which quota level makes the most sense for your business. Small growers have different requirements than medium or industrial growers.

Colombia is adhering to the Single Convention on Narcotic Drugs of 1961 to determine quotas. The International Narcotics Control Board approves quota levels for a country a year in advance.

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Based on the country’s quota approval, how much cannabis the Convention permits, it divides the quotas amongst licensees.

Colombia received 44 percent of the global quota from the narcotics board, which amounts to a commendation for the country’s ability to control cannabis cultivation and adhere to the strict international standards regarding the psychoactive version of the plant.

To read Colombia’s full regulatory framework, Law 613 is available as a PDF in Spanish from the country’s government website.

(Photo courtesy of Get Budding via Unsplash)
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