Since its production, commercialisation and use was fully legalised in 2018, Canada became the only place in the world besides Uruguay where cannabis is completely legal (other countries have only partial legalisation) and also its main exporter. But Colombia’s recent opening to exports may pose a clear threat to Canada maintaining that status, taking into account all the losses this would entail.
August 2021, the decree on safe, informed access to the use of medical and scientific cannabis signed by President Iván Duque in July came into force in Colombia. The decree allows the industrial use of cannabis for the manufacture of textile and food products such as the export of dried flower (prohibited until now), as well as production and distribution. The main and most evident advantage that the Andean country has over Canada is its climate. Due to its particular geographical location on the Equator, Colombia has about twelve hours of natural light a day and more than optimal temperature and humidity conditions, with very few fluctuations throughout the year.
Including labour, the final cost of production is also much more beneficial: if the cost of growing a gram of marijuana in the United States or Canada is around two dollars, this can be accomplished in Colombia for just six cents on the dollar. And on top of this, Colombia is the second world exporter of dried cannabis flower (only behind the Netherlands), giving it remarkable expertise when embarking on this new industrial venture on a global level. Despite all of this, Colombia also has the disadvantage of a law that is still stringent, and only a very limited number of licences to grow cannabis have been granted; this is in contrast with a much laxer law in Canada (who would be its main competitor).
What is undeniable is the enormous economic potential this might entail for Colombia: if medical cannabis exports were more than five million dollars in 2020, it’s estimated that they could reach over 1.7 billion by 2030 according to the government business promotion agency ProColombia. The most optimistic forecasts would place the turnover above 2,500 million dollars (even exceeding figures reached in the coffee sector), which would mean approximately 44,000 jobs.
With a market value exceeding 50% of the total sales of medical cannabis worldwide, the dried flower is the most essential part of the cannabis plant, and the part that can best be utilised. Announcing in July that Colombia would allow the export of the cannabis flower, the President himself estimated an economic potential of billions of dollars for the country. The very next day, shares in Canadian cannabis companies dropped; at the same time, more than $500 million in foreign investment was attracted to Colombia.
This economic promise for Colombia in the market sharing of the cannabis industry dates back to the government of Juan Manuel Santos in 2016, during which a regulation was approved allowing medicinal and scientific uses of cannabis. It was very strictly regulated through licences granted by the Ministries of Health and Justice. At the present time, the new regulation signed in July by Duque goes further and allows Colombia the real possibility of being at the forefront of exports. It will take time and investment, but the country appears ready to enter the international cannabis business in earnest.