SAN VICENTE, Colombia -- Daniel Tobon’s pot growers keep this six-hectare plot neat and pristine.
Every few minutes, water mists hundreds of young cannabis plants on the greenhouse-covered farm outside of Medellin. The city once engulfed by violence and contested by drug lords, who decades ago paid assassins for bringing back police scalps.
But this cannabis is not being controlled by a local cartel boss.
First it will head to a lab. Then the dried flowers will be extracted, sent to the airport, and shipped to the United States, where Tobon’s biopharma company NuSierra uses the cannabis oil for its line of pharmaceutical products.
The drug business is now fertile terrain for corporate investors, regulatory compliance and profit-and-loss statements. San Vicente, along with other small farming towns across Colombia, are becoming hubs for a new export business: pharma-grade cannabis.
Since Colombia’s government legalized cannabis in 2016 for medicinal use, millions of dollars have flowed into the country in something of a boom. Five years later, companies listed on foreign stock exchanges boast of their businesses and growth potential on investor presentations. The boom is reminiscent of junior oil companies who came here in the early 2000s with the hopes of striking black gold.
Cannabis plants love Colombia’s year-round 12-hour days of sunlight. Companies noticed the economics too. Their costs of production per gram are about four U.S cents. In Canada, it costs more than a dollar per gram to grow pharma-grade pot. Most of Colombia’s cannabis exports contain low levels of THC and are designed for medicinal products and treatments - not for recreational use.
NuSierra, the company Tobon founded three years ago, is part-corporate farm, part-pharmaceutical outfit. To run a medical grade cannabis operation in Colombia, NuSierra needed to install high-tech security cameras along the perimeter of the farm and servers for recording the footage. High voltage irrigation pumps and a massive drying room put pressure on the town’s electricity system.
“To be up to spec we have these giant dehumidifiers for drying the flower and boy, those babies suck up a lot of juice,” says Tobon.
“We literally had to upgrade the town’s power grid.”
Industrial-grade dehumidifiers sweat the moisture out of NuSierra’s flowers before they are shipped to a pristine laboratory where chemists in white scrubs ramp up a stainless steel, supercritical CO2 extractor. Medical-grade oils filtered out of this machine fill 5-liter white plastic vats, which are then loaded onto airplanes at Medellin’s international airport.
And there’s no need to hide these drugs: white labels detailing the chemical contents spell out everything for bureaucrats to check on both sides of the border.
Colombia’s medical cannabis exporters raked in about $4.5 million in revenues last year. Anticipating a post-pandemic bounce off a bad year, exporters are expecting much more in sales for 2021 that will feed the legal weed business across the region and the world. Khiron Life Sciences, a Canadian biopharmaceutical company based in Bogota, wants to export raw cannabis material to Mexico, where it will then produce pharmaceutical cannabis products to treat epilepsy, reduce pain and aid with sleep disorders. With a Mexico base, Khiron is drooling over the NAFTA market. Clever Leaves, a New York-listed cannabis firm, started growing in Colombia before expanding to Portugal. It’s exporting to multiple countries already.
“We’re now exporting psychoactive cannabis products with high levels of THC to other countries with commercial purposes,” says Andrés Fajardo, president of Clever Leaves.
Back at NuSierra, 30 rows of greenhouses run down the hillside like lines of marshmallows. Inside, agronomist Juan Carlos Montoyo inspects the crops for fungus and tracks fertilizer volumes by the microgram. The data he harvests goes into an excel spreadsheet, which he then sends off to the bosses and investors who live in Canada, the U.S. and Brazil.
Corporate agribusiness practices demanded by the country’s cannabis regulations require millions of dollars in start up capital. But in Colombia, decades of civil strife and economic equality have malnourished some small farmers to the point of financial exhaustion.
Colombia’s cannabis laws tried to solve this problem. The laws include small farmers in a kind of crop-share agreement where corporates would have to buy a certain quota from disenfranchised growers.
But the rigorous bureaucracy of licensing and other regulations for producing medical, pharma-grade weed in Colombia means it is next to impossible for most small growers to comply. In some parts of Colombia, like the jagged hills around Cauca department, selling marijuana into the black market is still the only option for them.
“The cannabis laws here act as a sort of filter,” explains Santiago Ciurlo, co-founder of Huicanna, a medium-sized medical-grade growing operation located outside of Bogota.
“Not all the cannabis growers in Cauca can obtain a commercial license because it’s really expensive or maybe there are land-use restrictions. That basically shuts the door on the small Cauca growers who want to enter the legal medical market. So think of these as two totally different sectors: the medicinal one and the recreational one.”
“Colombia isn’t exporting recreational cannabis,” said Ciurlo. “Only medicinal cannabis.”
Legalizing cannabis more broadly could help bring low-volume farmers out of the violent black markets where drug lords still control the market.
At least, that’s what Tobon hopes for.
In the 1980s he realized his family was fleeing Colombia when he came home one day to find an empty house. The furniture was packed up and gone. “We’re moving to the United States. I know this is a big change but this is happening,” he remembers his parents saying to him.
Even before Colombia became synonymous with the word ‘cocaine,’ this South American nation was already a mecca for cannabis. On the Caribbean coast in the 1960s and 1970s, farmers started growing marijuana which was smuggled to the United States.
“I think that 100 percent legalization is the way to put a kibosh on violence,” Tobon argues.
“Whenever you make something illegal, you artificially create scarcity and that artificially increases demand. All you’re doing is subsidizing the blackmarket by allowing the blackmarket to set a higher price for that commodity.”
Until then, cannabis in Colombia looks set to be another kind of agribusiness crop with capitally-intensive pharmaceutical companies paving the way. But it means that the little man - small, informal growers - will be left out of the boom for now, and feel forced to keep feeding the black market for marijuana.