The Colombian government may reconsider its ban on medical cannabis flower exports for commercial purposes.
A recent letter by the Superintendency of Industry and Commerce (SIC) – a government agency that promotes fair business practices – to the Ministry of Health recommended the country modify current regulations and allow flower exports.
This is the first time an agency such as the SIC has recommended allowing flower exports.
Although the proposal is not binding, it could nudge the government to make a move, local sources say.
Allowing exports of flower for commercial medical purposes could open new opportunities for Colombian producers.
However, the global export market remains small and competitive, so even if flower exports are allowed, it won’t be a panacea for the Colombian cannabis industry struggles.
Cannabis flower exports from Colombia have been authorized only for scientific purposes.
Colombian producers have seen unimpressive export revenue from extracts exports so far, particularly when considering that the country has received hundreds of millions of dollars in foreign investment for cannabis production projects.
As of October 2020, total cannabis exports from Colombia amounted to only $5 million, according to a report issued by Asocolcanna, the main cannabis industry association in Colombia.
Most of those exports involved shipments of CBD to the United States, followed by the United Kingdom and Australia.
In contrast, Uruguay has been able to export more than $10 million of product to date, primarily thanks to the transport of high-THC flower.
“It’s critical that Colombia’s regulatory framework remains competitive and allows companies to access new markets, increase revenue and attract further investment,” Rodrigo Arcila, executive president of Asocolcanna, told Marijuana Business Daily.
“Allowing flower exports makes strategic sense,” said Camilo de Guzman, general counsel of Colombian licensed producer NatuEra, told MJBizDaily.
NatuEra is a joint venture in Colombia with Toronto-based Cronos Group.
According to de Guzman, “Colombia’s ability to grow and harvest high-quality flower year-round, at a low cost and in many microclimates, positions it uniquely to service this market with a varied offering of fresh product at stable quantities and prices.”
The SIC says the flower export restriction “causes market distortions without achieving the proposed objective” of developing a local pharmaceutical industry of value-added products.
The letter comes as the Colombian government is considering introducing several modifications to the decree that regulates the cannabis industry, although the process has been in the works for more than a year.
Colombia businesses have long had an eye on the flower export market.
At the end of August, Asocolcanna sent a letter to the Minister of Justice asking authorities to reconsider the ban on flower exports.
But not everyone agrees.
Toronto-headquartered PharmaCielo and Khiron Life Sciences – two of the leading licensed producers in Colombia – cosigned another letter to the Minister of Justice in August in which they distanced themselves from the association’s position and outlining risks they argued could be associated with authorizing flower exports.
Both companies confirmed to MJBizDaily they maintain that position.
Alfredo Pascual can be reached at [email protected]