By: Craig Dempsey, Biz Latin Hub
It’s no secret that Canada has been one of the great drivers of cannabis development in the world, by approving it for recreational purposes through the national Cannabis Act. This Act was approved on October 17, 2018, in an effort to not only end the illicit economy surrounding the plant, but also to be at the forefront of its development in the medical sector. Canadians have been producing cannabis for medicinal purposes since 2015, earning a reputation as trailblazers in the field.
Canada has a broad competitive advantage regarding the sophistication of its technology and innovation in agriculture, and the supporting budget the government allocates to the sector. However, there is some loss of that advantage in cannabis, when considering the overall climates and costs of nearby countries in Latin America that have also legalized its production.
Countries such as Colombia offer a highly attractive, competitive market for cannabis. The options in terms of variety, price and quality make Colombia an ideal location for Canadian companies looking to operate successfully and with higher profit margins.
Canadian cannabis companies in Colombia are making the most of an ideal growing climate
Colombia is a country that has a wide diversity, from its culture to its composition in terms of geography and biodiversity, with countless species and a considerable range of natural environments and climates.
Therefore, it is important to find a place that can help the growth and production of this plant for medicinal and scientific purposes.
General characteristics that benefit the growth of cannabis in Colombia
Normally in Colombia the weather is described depending of the heights above the sea level, and these varied weather zones are known as thermal floors. There are a variety of altitudes and temperatures available within each thermal floor in Colombia:
The cannabis plant adapts easily to several thermal floors without problem, meaning that Colombia’s environment offers ample opportunity and spaces for low-cost production of the plant. Additionally, the country’s proximity to the equator means it receives around 12 hours of sunlight per day, and experiences 2 main seasons: dry season and rainy season. During these seasons, temperatures more or less remain constant, offering reliable growing conditions.
From the Colombian Caribbean Coast, to the Cundi-Boyacense highlands – both regions located between the Cálido and Páramo thermal floors – it is easy to grow Cannabis plants both outside and within greenhouses.
This is extremely attractive to the Canadian market. When entering the fall and winter seasons in Canada, low temperatures make it impossible to grow Cannabis in the open sky. Being able to grow outdoors contributes to the unique growth and quality characteristic of the Colombian cannabis strains compared to other locations in the world.
For a plant as versatile as Cannabis Sativa, a country like Colombia becomes the ideal strategic location for the growth and development of this plant. You can find particular properties within Colombian cannabis plants that can’t be found anywhere else, adding diversity to market offerings for medicinal cannabis in Canada.
Establish a Canadian company in Colombia to grow cannabis
For a Canadian company to operate in Colombia, it first must establish a local company. This can be made simple with the help of a local corporate law expert.
From there, companies can purchase land to grow their crop. Though some concern remains around the security of some areas of rural Colombia, many territories offer viable spaces of land for use.
Colombian law on using land for cannabis
Based on Law 1787 of 2016 and Decree 613 of 2017, Colombian regulations outline criteria for assessing land to cultivate cannabis for medicinal and scientific purposes.
Three key requirements under Law 1787 include:
- Certificate of Land Use: This document certifies a company’s ability to use a particular space of land for a commercial purpose. Companies must obtain a Certificate of Land Use to certify their activities cultivating cannabis for medicinal or scientific purposes.
- The land cannot be located within a natural park or in the National System of Protected Areas (SINAP). The Colombian State created SINAP to defend the conservation and sustainable use of the country’s biodiversity.
- Certificate of Freedom and Tradition of the land: This certificate is issued by the Notary. It verifies that the desired land complies with all necessary requirements. This includes identifying owners, the physical location and real estate registration, as well as valuations, mortgages, and other details.
There are a number of government agencies supporting cannabis activities in Colombia. The main administrators of Colombian cannabis law and policies are Ministry of Justice and Law, the National Surveillance Institute of Food and Drugs (INVIMA) and the Colombian Agronomic Institute (ICA).
How to get land in Colombia to start growing medical cannabis?
There are 2 main methods to obtain land and cultivate medical cannabis in Colombia:
- Contract of sale to acquire the land
- Land lease contract.
Government agencies will ask land-owning companies to prove their ownership of the land either through a sales contract or lease document.
It can often be easier for Canadian companies in Colombia to lease this land, instead of purchasing it outright. Purchasing land comes with extra paperwork and of course, higher investment costs. Leasing means paying a monthly fee to the land owners for as long as is required to cultivate cannabis for medicinal purposes. This method is efficient, and costs will only accrue for as long as the company needs to use that land. Starting and ceasing operations are both easier processes when leasing land.
Finding agricultural expertise in Colombia
Thankfully, many of Colombia’s agricultural experts possess skills highly transferable to cannabis. This smooth transition has contributed to Colombia’s rapid success in the global cannabis market. As a major supplier of cut flowers to the rest of the world, Colombia’s flower growers are particularly apt to support cannabis cultivation.
Canadian companies in Colombia can enjoy access to cheaper land and optimal growing conditions, as well as trained agricultural expertise within the country. With prime conditions, and close geographic proximity to the homeland, Canada’s cannabis companies should consider their prospects for producing medicinal cannabis in Colombia.
Make sure to consult an employment law expert when you’re hiring staff in Colombia to support your cannabis business. Labor laws differ greatly between Canada and Colombia, and your company will need to be aware of and fully comply with labor regulations, including understanding your social security contributions and wage and work schedule requirements.
Share the success of other Canadian cannabis companies in Colombia
Colombia offers valuable opportunities for Canada’s cannabis businesses, including lower production and labor costs and ideal climates for growing. Don’t let language be a barrier for you; connect with English-speaking legal and accounting experts who can support your business development. Make the most of the value this industry can offer your consumers back home.
About the author:
Craig Dempsey, Co-founder & Managing Director, Biz Latin Hub. craig@bizlatinhub.com