Colombia: new measures to regulate the medical cannabis industry

The Colombian government is planning to change the regulations surrounding the production of medical cannabis. The Ministry of Health has made the first version of the project public in May 2019, but the implementation date remains unknown for the time being.

Facilitating the circulation of cannabis

The project would make it possible to export cannabis to free-trade zones to be packaged, representing an interesting opportunity for companies that don't have the means to process it locally. For the time being, moving the flower, even within Colombian territory, is considered exporting. As Juan Felipe Mejia, representative of medical cannabis company THCG, points out, «most of the manufacturing equipment has to be imported, which means that import taxes are normally applied (plus a value-added tax) of 19%. This won't be a burden in free trade zones.»

Foliumed CEO Diego Navarro is also convinced of the merits of free-trade zones. «It should be possible to move manufacturing facilities into a free-trade zone,» he says, as this would enable Colombian companies to compete more effectively on the international market.

The issue of licensing was also addressed in the project. At present, the law allows growers with a license to produce non-intoxicating cannabis (i.e. with a level of THC less than 1%) and with at least 1 registered cultivar not to apply for a packaging license, and not to report on their production quotas. The new measures would require companies applying for a production license to also apply for a packaging license.

«The purpose of also applying for a manufacturing license for the production of non-intoxicating extracts is to provide the National Narcotics Fund (FNE) with tools to control residual THC in the production process,» explains Andres Lopez, former director of the National Narcotics Fund.

Integrating local communities

Among the measures proposed, there is also an effort to integrate local communities, which grew cannabis in the past and have not been able to integrate into the therapeutic cannabis market. Although the law currently requires licensed companies to obtain at least 10% of their cannabis from small or medium-sized producers, this is not always respected. Companies applying for a license after the law is in place will therefore have to certify that there are no ethnic communities around where they would like to set up that they could harm.

New controls will also be introduced: for example, companies will have to declare shareholders who own more than 20%.

The time required to obtain a license will also be extended, and it will no longer be possible to apply for both the production and processing licenses at the same time. Checks on documentation provided by companies will also be more rigorous.

For the time being, the Colombia has over 100 licensed companies, However, only 3 of them have registered a cultivar, which is one of the prerequisites for growing cannabis for commercial purposes in Colombia.