Marijuana Business Magazine September 2019

Marijuana Business Magazine | September 2019 46 Colombia: Most of the international attention in Latin America has been devoted to Colombia because of its advantages for domestic cultivation, with most of the companies there planning to export. But, up until recently, the nation’s only exports have been samples bound for ana- lytical testing. (Bogota-based Clever Leaves announced that the first Colombian shipment of nonpsycho- active cannabis products reached London’s Heathrow Airport on July 27. The products were exported as a food supplement.) A closer look shows that while the final regulations regarding the domestic medical market are drafted, the quickest path to revenue is importing raw materials to manufac- ture cosmetics, which are easier to register than medicines. That’s why Khiron Life Sciences, the only licensed producer currently selling cannabis products, generates revenue by selling cosmetics that are manufactured in Colombia with imported CBD rather than CBD extracted from Colombian cannabis. Blueberries Medical Corp. is another company with operations in Colombia that plans to start selling cosmetics during the second half of 2019 using CBD imported from the United States. Some smaller domestic companies aren’t even interested in investing the considerable time and capital required to cultivate their own cannabis, so they import CBD to sell cosmetics. Mexico: Despite legalizing medical cannabis in mid-2017, Mexico never properly regulated MMJ. Last year, right before the previous government ended its time in office, Mexico’s regulatory authority, the Federal Commission for the Protection Against Sanitary Risks (COFEPRIS), issued questionable guidelines to allow the importation of specific low-THC products but no domestic production nor exports. Only a couple of months later, the new government revoked the guidelines and started a process to determine the validity of the previously granted import permits. A bill that would legalize cannabis in all forms—including adult use—is expected to be approved during the second half of 2019. The law would allow (and probably also encourage) domestic production. It’s anyone’s guess how imports would work until the law and its regulations are available, but it wouldn’t be surprising if imports became the quickest path to market. Paraguay: This country has a very modest medical program, which consists of access to one CBD oil manufactured by a domestic laboratory called Lasca. Because no domestic cultivation has been authorized, the laboratory depends on imports of the CBD as raw material. Not many people know that Paraguay, one of the leading illegal exporters of marijuana in Latin America, depends on imports for its domestic legal medical market. Peru: Despite approving a medical marijuana law in 2017 and then regulating it with a decree in 2019, Peru won’t have business opportunities of any kind available until the relevant government agencies allow companies to apply for licenses. The country will allow domestic production, but, as is common with programs that are just starting, it looks as if access will first be secured via imports. This means that, at least until domestic production is up and running, the most immediate revenue-generating business opportunity would be to export cannabis products to Peru. Uruguay: This was the first country in the world to completely legalize cannabis in December 2013, including adult use, and the country has two licensed companies allowed to cultivate recreational marijuana for commercial purposes. Cannabis for nonscientific or medical uses can’t be legally shipped internationally because of the prohibitions established by international drug control conventions, so domestic production is necessary. But when it comes to access to medical cannabis, Uruguay is one more example of a country that depends on imports—even nearly six years after the law was approved. There’s only one company with registered products available on the shelves of pharmacies: Medicplast. The company doesn’t grow cannabis in Uruguay, so extracts—for now, this includes only CBD-rich oil with minimal THC—are imported from Switzerland, and the manufacturing process is finalized domestically. In addition to the Medicplast products available locally, patients also can apply to obtain a permit to import nonregistered products from abroad for personal use. As you can see, imports have been more prevalent than exports for the Latin American countries with medical cannabis programs. In cases such as Brazil, which allows only imports, the reason is clear. In nations such as Colombia, which is expected to become an exporter soon, there’s a more immediate opportunity for generating domestic revenue with imports. This situation is unlikely to last for- ever, but while these countries are in the earlier stages of developing med- ical marijuana programs, companies that understand and embrace the immediate opportunities to generate revenue could have a head start. Alfredo Pascual is an international reporter for Marijuana Business Magazine based in Germany. Reach him at alfredop@mjbizdaily.com . Trends & Hot Topics | Alfredo Pascual