With Canada’s legalization of cannabis drawing closer, a number of cannabis companies with operations in Colombia hope to be pioneers in the emerging market – despite the risks of operating overseas.
CBC News reported that at least seven licensed Canadian cannabis producers have opened locations in Colombia, investing more than $100 million in the country.
Although stigmatized by decades of political instability and drug conflicts – which continue to this day – cannabis producers see a lot of potential in Colombia, and they hope to transform the country into a hub for cultivating medical marijuana.
“We understand the pain of the war on drugs. That war was here,” Spectrum Cannabis Colombia managing director Bibiana Rojas told CBC News.
Rojas added that she believes cannabis is a “piece of hope,” as Colombia moves towards “transforming something that caused so much pain in the past” into “a crop that can bring health and wellness to Colombians.”
Spectrum Cannabis Colombia is a subsidiary of Canopy Growth, one of Canada’s major marijuana firms. Canopy Growth has plans over the next few years to invest $60 million in greenhouses, production facilities and research in Columbia, Rojas said.
Columbia’s weather is also conducive for cannabis cultivation, as Khiron Life Sciences president Chris Naprawa points out.
“There’s a reason why we don’t grow coconuts and bananas in warehouses in Mississauga,” said Naprawa, whose company also has operations in Columbia.
Khiron is looking to produce over eight tonnes of cannabis annually from its Bogota facility.
As promising as investing in Columbia’s cannabis industry is, two major risks threaten the business.
Some analysts remain sceptical about investing in Columbia’s cannabis market, especially with the country’s shaky political landscape.
“I would be very cautious,” said Canaccord Genuity Wealth Management portfolio manager Robert Tetrault. “As a shareholder, do you want to find out your facility in Pablo Escobar’s home turf just got seized or there are now tariffs, added costs or corruption?”
Canadian cannabis companies are also currently not receiving any assistance from the government, thus lacking any sort of financial protection.
Export Development Canada (EDC) and the Canadian Commercial Corporation (CCC) – two federal agencies that provide credit, insurance and other services to Canadian firms operating in risky markets – have told CBC News that they have not yet provided assistance for cannabis firms in Colombia.
