Colombian Marijuana Industry Feeling the Pinch of Tight Regulations
Colombian marijuana regulations are threatening its otherwise promising medical cannabis industry, according to Reuters.
Colombia – whose advantages in climate and cheap labour make it a prime candidate for large-scale cannabis production – could become a world leader, with a CBD export industry already in its infancy.
But much like Canada’s underwhelming performance, Colombia also is falling short of investors’ expectations. Like its northern counterpart, regulation created a bottleneck that hampered the approval, production and distribution of marijuana – only to an even worse extent.
Regulation is an important part of every industry, but there needs to be a balance. Little or no control can create a public health hazard, but excessive regulation comes with its own problems – something Colombia needs to address.
Investors Turned Off
Excitement was in the air when Colombia’s cannabis industry began ramping up for international competition. Unfortunately, now the enthusiasm is dying down. Reuters explains:
“Colombia was one of the first countries to regulate the cultivation, commercialization and export of marijuana products. But businesses that invested in cannabis complain delays in regulatory adjustments are stemming exports and discouraging potential investors.”
The impact is quite obvious. Clever Leaves, who owns a large marijuana farm in Colombia’s Boyaca, is behind the country’s first cannabis export in history. The February 2019 shipment went to Canada, but it was a mere 360 grams.
In July, Clever Leaves also exported 6,000 bottles of CBD supplements to London. Again, this is not a lot, given the company’s production capacity.
Canada-based PharmaCielo made a similar delivery to Switzerland after operating for three years.
Colombia’s medical cannabis industry could be worth six billion dollars, but this number seems to have lost its appeal as it becomes seeming unattainable. Consequently, previously interested parties feel their aspirations deflating, which could cause Colombia’s edge to evaporate:
“…the export headaches are already harshing the mellow of foreign investors, who initially poured some $400 million into the industry over three years. The risk is that businesses will look elsewhere in the region, to countries were production and export look set to prove easier, experts say…Swift regulation in Uruguay, Peru, Mexico and possibly Brazil could erase Colombia’s initial head-start, businesses warn.”
Slow and Steady
Despite the obvious frustration felt by many, Colombia’s rationale is to take it slow. Juan Diego Alvarez, who is in charge of Colombia’s food and drug regulator, says that the country needs time to do things right:
“Everything had to be learned, to be addressed. The only way for this not to be a bubble is for us to do it responsibly.”
The Colombian government is aware of the regulatory concerns, promising that “advances in rules” will come by the end of October.
While this approach may be safer and more beneficial in the long run, Colombia’s desire to be patient is in direct conflict with the instant gratification wanted by nervous investors. This basically puts Colombia in a position where they have to choose between serving their industry or serving investors.
WeedAdvisor’s Consistent Support for Colombia’s Cannabis Industry
As a Canada-based company with a global presence, WeedAdvisor is no stranger to regulations – and the setbacks they cause.
But despite their effects on Colombian investments, we understand the need for government oversight. Colombia’s slow, steady approach may not be conducive to a quick profit, it may work better than the rushed rollout.
Meanwhile, WeedAdvisor’s multitude of business solutions and services exist to help guide governments, licensed producers and retailers through the unfamiliar territory of setting up a large-scale cannabis industry.