Colombian Cannabis Could be Canada’s Cash Cow

The crop is abundant and the market is ready to explode. Colombia, once known as Ground Zero in cocaine production and trafficking, is poised to emerge as a major global exporter of medical marijuana.

Two years have passed since former president Juan Manuel Santos legalized medical cannabis for domestic use and export. The goal is to take the marijuana trade from the hands of Marxist rebels and traffickers, transforming Colombia into a multibillion-dollar producer for the medicinal industry.

According to Reuters, the new industry will not produce smokable marijuana but focus on oils, creams and inhalers, created in laboratories and prescribed to individual patients.

Growers estimate that Colombia could capture as much as one-fifth of a global market worth approximately $40 billion a year. That would be more than coal exports, and also more than exports of flowers, coffee and bananas combined.

Colombia has already issued 33 licenses and hopes to grow as much as 40.5 tons a year of medical marijuana, accounting for roughly 44 percent of licenses issued globally.

“We’re just realizing marijuana’s potential. It could be the next economic bonanza, like coffee was,” one grower told Reuters.

The biggest potential market, the United States, remains closed off, reports The Washington Post. Even the states that have legalized pot use still ban cannabis imports. But an increasing number of other countries—including Germany, Peru and Croatia—are seen as fast-developing export markets for medical marijuana.

Canada, in particular, is a key market. According to Bloomberg, cannabis companies listing on Canadian stock exchanges have a combined value of $32 billion. And for the past two years, Canadian cannabis companies have been looking abroad to seek a piece of the potentially large profits made from exporting cannabis as other countries move towards legalization.

At least seven Canadian cannabis producers have set up shop in Colombia. PharmaCielo, based in Toronto, is one of them and was the first company licensed in Colombia.  According to CEO and co-founder Anthony Wile, PharmaCielo is on track to rapidly scale its vertically integrated Colombian operations.

Anthony Wile, who holds dual citizenship in Canada and Colombia, says, “With a tropical climate ideal for cultivating cannabis, highly experienced growers, comparatively low wages and a population of 50 million, Colombia as an ideal place to invest.”

While some investors are skeptical about Colombia’s legacy of conflict between leftist rebels, right-wing death squads and drug-trafficking cartels, others are optimistic about recent political developments. CBC News reports that the government and the Revolutionary Armed Forces of Colombia (FARC), the country’s largest leftist rebel group, signed a peace deal in 2016.

Overall, reports Bloomberg, investors are optimistic that Colombia will meet Canada’s surging demand for cannabis in the wake of legalized recreational pot this year.

In addition, Canada’s venture markets are known for their risk appetite, says Chris Damas, editor of the BCMI Cannabis Report. “The nation has always been a mining frontier country. It’s like a Yukon gold rush.”