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Colombia's Big Plans for Medical Marijuana Are Going to Screw Mom-and-Pop Growers

New laws are seeking to turn Colombia into a leading global supplier of marijuana-based medicines look set to push established small-scale businesses out of the game.

by Ezra Kaplan and Jin Wu
Apr 21 2016, 8:00pm

Imagen por Abir Sultan/EPA

The store front of Ganja Farm in downtown Bogotá is small and nondescript, but the pungent smell on approach is unmistakable. A quick glance through the barred front door reveals a network of metallic ductwork. It does not reveal the marijuana plants the company grows, or the lab where they turn them into health products.

Inside a cozy little office, an elderly man in his work clothes that are splattered with dry paint, sits talking to Camilo Andrés Cruz, one of the founders of Ganja Farm. Cruz puts a small canister of green cannabis-infused ointment for his client's arthritis in a cloth bag and sees him on his way.

"We don't want to sell the company to other people," Cruz says later. "We love this."

The fear of having to close up shop is rooted in the decree signed last December by President Juan Manuel Santos that opens the way for companies to seek licenses within a new export-focused medicinal marijuana industry that includes every step of the process from cultivation to manufacture of the finished product.

The decree was widely reported as equivalent to legalization, but the truth is that small-scale medical marijuana has been permitted in Colombia for the past 30 years. What has changed is that now big international companies have an incentive to move in, while for small firms, like Ganja Farm, it could be the beginning of the end.

"The decree is written in a way that makes it so that if you want to work with cannabis, you have to be a big company," said Cruz. "We are going to be bigger, we are doing everything we can to be bigger because all the small companies will disappear."

Related: Inside a Clandestine Marijuana Workshop for Cancer Treatments in Mexico

Cruz says that the old 1986 law classified the plant as medicinal and allowed companies like his to do anything they wanted with up to 20 plants, as long as it was for medical or scientific purposes. The new legal framework, he says, both does away with that 20-plant limit and imposes stringent new standards on marijuana products that are on a par to those demanded of pharmaceutical companies processing morphine.

It all comes down to money, Cruz complains — lots of money.

"If we had that kind of money we would be the narcos," he said, noting the flurry of interest from international companies seeking to buy out local established companies. "The Colombian companies don't have any protection. It's going to be very hard."

Government officials have insisted that both the small scale local businesses and major multinational pharmaceuticals can coexist, but their comments also make it clear the priority is to put Colombia at the vanguard of the new global commodity market they see emerging.

"There's a global market that is going to grow," health minister Alejandro Gaviria told a press conference last year. "Colombia can participate in it through big companies."

It isn't there yet.

Canada, which legalized medical marijuana in 2001, currently allows import for only limited purposes, such as bringing in starter plants that will be used to make marijuana-based products in Canadian factories. The US, meanwhile, offers a patchwork of different laws for different states, but the fact that marijuana remains illegal at the federal level means importing is ruled out, for now.

Within Latin America, Mexico's President Enrique Peña Nieto announced this Wednesday that his government will promote reforms to permit importing cannabis-based medication.

Related: Mexico Will Never Win Its War on Drugs — But It's Going to Keep Fighting Anyway

Colombia's government appears confident that the market will soon loosen further and that the country's competitive advantages will become clear when it does.

These, officials argue, include its position straddling the equator that means a 12-hour light, 12-hour dark cycle considered ideal for flowering marijuana plants at a time when energy consumption is a major concern for legal growers in the US. Also, unlike many equatorial countries, Colombia also has plentiful water resources and rich soil, as well as an abundance of cheap labor, a weak exchange rate, and an export-friendly government.

Last month the Colombian subsidiary of PharmaCielo, a Canadian cannabis-focused pharmaceutical company, filed what appears to be the first application to become a licensed grower and processor of medicinal-grade cannabis oil extracts.

"It is our goal to become the world's leading supplier of naturally grown high-quality medicinal-grade cannabis oil extracts and there is no better location to do so than Colombia," the company's director Jon Ruiz said. "Colombia will play a massive role in this rapidly developing international industry."

PharmaCielo has announced the purchase of 67 acres of land near the city of Medellin with plans to expand to 1,500 acres. If their calculations are right, it will cost well under one dollar per gram for productions compared to in Colorado or Canada where it is about two dollars.

The company also says it is associating with expert flower growers. Colombia is the top foreign supplier of cut flowers in the US and accounted for 65 percent of all flower imports in 2013. "At the end of the day, marijuana is just a flower," said Ruiz.

Related: Portugal's Example: What Happened After It Decriminalized All Drugs, From Weed to Heroin

Follow Ezra Kaplan on Twitter: @KaplanEzra