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Doing business with medical cannabis
What regulations does Colombia have for growing and processing medical cannabis? What business opportunities are there in this field?
Ángela María Salazar, Lloreda Camacho Natural Rosources Department Director, talks about doing business with medical cannabis in Bogota.
Cultivating and selling cannabis for medical and/or scientific purposes is an incipient industry in Colombia, which has been regulated since 2016, under Law 1787 of that year, precisely allowing for the cultivation and processing of cannabis and its derivatives in medical products. Subsequently, Decree 613 of 2017 was issued establishing the conditions for these practices. This year, the Government enacted Decree 811 of 2021, replacing the 217 Decree, implementing updated provisions required by this industry, while also filling in the voids of the previous regulation.
Despite the recent regulation and development of this industry in Colombia, there is evidently great potential for its establishment as a key economic sector in the country, given the following considerations: the existence of free trade agreements with key countries to export medical cannabis; local weather conditions; available qualified labor at competitive prices; and large areas of land that can be used for crops.
In order to participate in this industry in Colombia, interested parties must first obtain certain licenses, generally granted for a 10-year period as of Decree 811 of 2021, that may be extended for an equal term, but cannot be transferred to third parties once obtained. Depending on the type of activity to be developed, interested parties must obtain one or more of the following licenses:
- License to use cannabis seeds and grain, issued by the Ministry of Justice and Law.
- License to cultivate psychoactive cannabis plants, issued by the Ministry of Justice and Law.
- License to cultivate non-psychoactive cannabis plants, issued by the Ministry of Justice and Law.
- Extraordinary license to cultivate cannabis plants, issued by the Ministry of Justice and Law.
- License to manufacture psychoactive cannabis derivatives, issued by the National Institute for Drug and Food Surveillance (Invima for its initials in Spanish).
- License to manufacture non-psychoactive cannabis derivatives, issued by the Invima.
- Extraordinary license to manufacture cannabis derivatives, issued by the Invima.
Keep in mind
The licenses for doing business involving medical cannabis can be requested by any natural or legal person – whether public or private in nature, either Colombian or foreign, as long as it is a registered as a place of business in the country.
In order to obtain these licenses and for the purpose of using cannabis seeds, applicants must previously obtain a registration before the Colombian Agricultural Institute (ICA, for its initials in Spanish).
For the production of cannabis derivatives, applicants must also obtain an authorization issued by the Invima.
License holders looking to cultivate psychoactive cannabis or to produce psychoactive cannabis derivatives, must also obtain an annual quota allocation from the Ministry of Health and Social Protection, and the Ministry of Justice and Law respectively, in the meantime and in accordance with Decree 613 of 2017, that is, while both entities, together with the Ministry of Agriculture and Rural Development, draw up new regulation on the matter, as per Decree 811 of 2021.
- Insolvency procedures that take place due to reorganization must not last longer than 6 months, and those related to liquidation must not last longer than 8 months. However, in practice they can last up to 2 years.
- Insolvency procedures end with a reorganization or liquidation agreement, enforceable education measures, or the signing of a reorganization agreement.
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Lloreda Camacho & Co
Specializing in multinational companies, Lloreda Camacho & Co. has 75 years of experience giving legal advice in the areas of commercial, corporate, financial, tax, administrative, foreign exchange, labor, environmental, mining and real estate law, as well as in the areas of private and mergers and acquisitions (M&A), public contracting, competitiveness and economic integration, consumer protection, telecommunications, sanitary registrations, intellectual property, fintech, litigation and arbitration, and in filing administrative proceedings with all government agencies.
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