Colombian Marijuana Investment Facing Excessive Regulatory Obstacles

 

Colombian marijuana investment seems like a golden opportunity. According Investor’s Business Daily, Colombia issued over 200 cultivation licenses so far.

But while the potential is certainly there, it is encased in thick, multi-layered shell of regulatory obstacles and processes from Colombia and its importers.

It is no secret that Colombia has tight rules around its medical cannabis industry (which could one day also service recreational users). The extent, however, is surprising and could be off-putting to individuals who would otherwise jump into this growing industry.

 

“Labyrinth Approval Process”

 

Colombia’s regulator process has good intentions, but one look at the situation shows that something needs to change.

The country’s rules may be responsible for the majority of these delays, but the blame does not entirely fall on Colombia. Investor’s Business Daily explains:

 

“…those companies need to make their way through a labyrinthine approval process before they can legally sell any product domestically or abroad.  After that, the process of actually exporting cannabis requires a lot of changes to meet requirements of regulators and authorities on both ends of the deal, and even the airline flying the products itself.”

 

The cannabis industry in any country is no stranger to bureaucracy, but it would be hard to disagree that this extensive red tape benefits nobody.

 

Different from Canada

 

Major cannabis companies like Tilray, Canopy Growth and Aurora are already well-established in Colombia, but their experience getting started is radically different. It may even make them appreciate Canada’s comparative regulatory simplicity.

Unlike Canada, who allows companies to begin cultivating and selling once they receive their licenses, Colombia requires additional registration – and it is a lengthy process:

Alfredo Pascual, an industry analyst for Marijuana Business Daily, says:

 

“It is not the same as having a license in Canada. Having a license in Colombia is like, ‘OK, you’re good to play the game now. But now comes the hard part.'”

 

The next step involves choosing and registering certain strains. Unfortunately, this step is anything but easy:

 

“…to get a strain registered, those companies first have to register a seed bank, or, essentially, a collection of seeds. The company then selects a strain from that seed bank to go through a government review process. In that process the government evaluates whether a company can grow that strain consistently. It can take around six months.”

 

Fortunately, companies are at least able to initiate the licensing and registration process at the same time, reducing the overall delay. Still, this delay is enormous. PharmaCielo Chief Corporate Officer David Gordon says that the approval process, along with growing and cultivation, means it could take two to three years to register a single strain.

 

What Does This Mean for Investors?

 

Colombia’s potential is certainly there. However, the regulatory delays mean returns on investment will not happen as quickly as we hope.

That being said, this does not mean investing in Colombia is a lost cause. Investors may simply benefit from either investing later. Otherwise, they will wait longer than expected to see results.

 

WeedAdvisor’s Close Involvement with the Colombian Marijuana Industry

 

As Colombia’s marijuana businesses wind their way through the “labyrinth” or regulations, WeedAdvisor continues to engage with clients throughout Colombia.

Once new producers and retailers become established, we look forward to offering our selection of critical business solutions to assist with functions like inventory tracking, compliance, employee management, POS, reporting and more.

 

 

 

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