What does the crisis in the Colombian sector exploiting the therapeutic properties of cannabis indicate?
Regulatory obstacles have become one of the main problems for development. In particular, various types of administrative barriers have pushed many companies in the Colombian cannabis market to the brink of collapse.
Colombia was one of the first countries in the world where the government regulated the cultivation of cannabis for medical purposes back in December 2015. However, subsequent government intervention in the "free market" and the regulation of any processes related to the use of the plant's therapeutic properties have led to the current situation where the segment of the cannabis market exploiting the plant's medicinal properties is effectively in decline and has ceased to be competitive compared to other countries where government officials simplify such activities.
The Colombian cannabis industry faces serious regulatory and economic problems that continue to hinder its growth, development, export potential, and threaten its viability. In particular, over the past seven years, despite the issuance of relevant permits for the processing of 57,000 hectares of land, only 26 hectares have been actually planted, and 40% of licensed companies in the sector have closed down.
Impact of Administrative Obstacles
According to companies monitoring the state of the industry exploiting the therapeutic properties of the cannabis plant, regulatory obstacles are becoming one of the main development issues. Specifically, representatives of the company “Analdex” note that various types of administrative barriers have pushed many companies in the Colombian cannabis market to the brink of collapse.
For example, regular delays in registration with the National Institute for Food and Drug Surveillance, as well as initiated processes by the National Fund for Drug Control, create an atmosphere of uncertainty affecting both large and small producers.
These delays not only affect day-to-day operations but also alter the perception of the long-term viability of businesses exploiting the plant’s therapeutic properties.
Restructuring and New Business Strategies
In response to these issues, several companies in the Colombian medical cannabis market have initiated restructuring processes. For example, “Clever Leaves” has announced the liquidation of its enterprises in Portugal and layoffs of employees as part of a strategy to focus on more viable strategies. “Khiron Life Sciences” has developed a new survival strategy in extreme conditions, focusing on the clinical business, significantly reducing operations related to the cultivation and processing of cannabis raw materials.
Comment from the Ukrainian Technical Hemp Association
Despite the aforementioned industry problems, there is a growth in export supplies in the sector exploiting the therapeutic properties of the cannabis plant in Colombia. In 2023, revenue from the export of cannabinoid raw materials and high value-added final products reached $9.6 million, which is 89.1% more than the previous year.
