Anthony Wile: Colombia grants first cannabis processing license, country poised for greatness
By Anthony Wile - June 28, 2016

In the long-running global war on drugs, arguably no country in the world has suffered more than Colombia, where I have been doing business and living part-time for over 15 years. Violence, poverty, fear, destruction of families and communities, political upheaval, economic chaos – the black market has wreaked havoc throughout this beautiful land.

But today, the courageous and forward-looking leadership of Colombia has taken another giant step on its path to turning a drug that was previously so damaging into a force for global good. The Ministry of Heath has granted the nation’s first license for the production and manufacturing of cannabis for medical and scientific purposes. This first license was awarded to PharmaCielo Ltd., a Canadian corporation with operational headquarters in Colombia. As long-time Daily Bell readers and those following my work at The Wile Group know, I am a director of the PharmaCielo Foundation and a private investor in PharmaCielo Ltd.

For a number of significant reasons, it makes perfect sense for Colombia to embrace the burgeoning medical cannabis industry now, during its infancy, when the regulatory structure that will eventually frame the entire global market is just being developed. Colombia is in position to create the standard for high-quality, low-cost, standardized medicinal cannabis cultivated using environmentally net positive practices, processed using pharmaceutical-grade techniques, and shipped internationally safely and securely.

First, Colombia is an ideal place to naturally cultivate and process cannabis in an environmentally net positive manner. Temperatures are ideal for open-air greenhouse production, rainfall is plentiful and regular, allowing growing facilities to use their own natural water reserves rather than drain localized water tables, and, being located at the equator, the daily 12 hours light/12 hours dark cycle – exactly the light requirement cannabis needs to properly flower – is consistent, year-round. The diverse microclimates within Colombia also facilitate cultivating a wide variety of strains, each of which thrives best in slightly different growing environments.

Second, a tremendous amount of support exists within Colombia to facilitate the rapid development of a cannabis industry, from the world-class university system, agricultural/research organizations and leading engineering firms. The University of Antioquia is renowned for its third-party testing lab services that help companies extend their R&D capabilities and its impressive work to identify and investigate the nation’s diverse flora, Universidad EAFIT has an exchange partnership with Purdue’s School of Industrial Engineering and Universidad de La Salle has an innovative sustainable agriculture program for young farmers in rural Colombia, to mention just three examples.

Colombia’s agricultural success is supported by research organizations such as Corpoica, the Colombian Corporation for Farming Research, a quasi-private public agricultural research and technology organization. The nation’s massive cut-flower industry ascribes to the high environmental and social standards of the Florverde Sustainable Flowers certification as well as those set forth by the association of flower producers, Asocolflores. Finally, international trade security is guided by BASC, the World Business Alliance for Secure Commerce, which facilitates trade through internationally recognized standards and procedures.

The engineering expertise needed to develop cannabis processing facilities, required because Colombian law only allows export of cannabis oil extracts, is readily available from internationally recognized firms like Indisa S.A. This strong, broad infrastructure is part of the reason companies like Kimberly Clarke, IBM, Hewlett Packard and Citibank and have relocated or expanded into Colombia. It’s not surprising Colombia has long been an area of interest to big pharmaceutical companies for research and clinical trials, conducting initial investigations and investigating initial indications for new products.

Already the world’s second largest exporter of cut flowers, Colombia has a work force of 94,000-plus with extensive experience in the industry as well as the infrastructure and relationships in place for global exportation through major channel distributors – in many cases, the same ones who will most likely be distributing medical cannabis in markets worldwide – both of which can be smoothly transitioned to include medical cannabis as well. With coasts on two oceans, Colombian ports facilitate lower-cost sea shipping throughout the world. Air freight, already highly efficient due to the massive volume of cut flowers being exported, allows for direct, expedient shipments of goods to Europe, Asia and the Americas.

The stable political climate, especially as compared to the leftist-leaning governments of neighboring regions, provides another important comparative advantage for Colombia. The previous decades of guerrilla warfare has ended with the peace process nearing a successful close, allowing the government to refocus its energy on economic and social improvement, which has been massive. Today, Colombia has a proven track record of encouraging and protecting foreign investment, enabling investors to feel confident about putting capital into the region. The World Bank’s 2015 Ease of Doing Business report ranked Colombia 34th in the world and 1st in Latin America, with a comprehensive legal framework in place for foreign direct investment.

Colombia is a perfect “one-stop shop” to lead the global development of the medical cannabis industry, where leadership can be brought forth on the environmental front as well as in the standardization of scientifically advanced processes that enable natural processing of the cannabis plant into extracts that reflect the purity of the whole plant’s constituents.

This can be accomplished so that the world has access to natural, low-cost, environmentally friendly cannabis produced at pennies on the dollar compared to other countries, creating a white market vertical structure between local producers, exporters, importing distributors and governments. The vertical of that pricing structure is easily lower than that of local black markets operating in regions around the world not climatically suited to producing in outdoor low-cost environments – which means the black market can more readily be replaced and extinguished.

The white market can be regulated, controlled, governed and taxed. At the same time consumers can receive natural products at price points much lower than can possibly be offered by domestic producers operating in indoor warehouses or winterized greenhouses that require extensive power use and drain water from community sources

The world is today more focused than ever on producing and purchasing environmentally sound products, and world leaders continue to gather frequently to discuss climate change and related environmental issues. It’s on the forefront of everyone’s minds, and no matter one’s position on the question of climate change, we can certainly all agree we should be good stewards of the land. Opportunities to lower our collective carbon negative impact should be embraced – particularly when consumers can save money at the same time the dangerous black market is put to rest.

We should support countries like Colombia as they establish a new brand image by turning one of the two plants most responsible for their tarnished international reputation into a force for good by bringing the universities, scientific minds, business leadership and work force together in the effort it takes to do so. Colombia is now in a ready position to lead the world in the development of a new global industry.

I personally applaud the country. And as a person with a vested interest in this space, I certainly support with great enthusiasm the bold moves taken by President Santos and his government to give Colombia and all Colombians this fantastic opportunity.

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Posted in Cannabis / Marijuana, EDITORIAL, STAFF NEWS & ANALYSIS