EXCLUSIVE: Colombia Could Soon Legalize Adult-Use Cannabis—Can US Cannabis Operators Take Advantage?

On Wednesday, Colombian Senator, Gustavo Bolivar, filed a bill to legalize adult-use cannabis in the South American country. In 2020, Senator Bolivar tried to legalize the consumption of marijuana but his bill did not have the support of the majority in Congress.

Now, with a new Congress and cannabis-friendly President-elect, Gustavo Petro, Senator Bolívar assured that the new project will be approved.

"On July 20 he presented again the Bill that regulates Marijuana for adult use. With our majority, we are going to approve it. We will stop killing ourselves for a plant that in the USA produces 25,000 million dollars/year and improves the health of the consumer," Sen. Bolivar tweeted on July 6, 2022.

A New Chapter In The History Of Colombian Cannabis

The purpose of the new legislation is to create a regulatory framework for the cultivation, production, storage, transformation, marketing, and use of cannabis and its derivatives for adult use.

According to Luis Merchan, Chairman and CEO of Flora Growth Corp. (NASDAQ: FLGC), the largest cannabis operator in Colombia, there is a social and political momentum building up in the country around the legalization of cannabis for adult use.

Merchan noted that Petro’s party, Pacto Historico, now has the majority in Congress. “Clearly President Gustavo Petro is the leader of the party and clearly there is a lot of optimism, [this is] a positive momentum towards the legalization of a cannabis use framework for adult use,” Merchan told Benzinga.

For Lucas Nosiglia, president for LATAM at Avicanna Inc. (TSX: AVCN), the project opens a new chapter in the history of cannabis in Colombia. He thinks that, by virtue of the support that Petro has, the bill could pass, animating a profound debate that has been pending since was legalized in 2016. “The big difference now is that society has been in touch with the industry for six years. It is a society that understands the benefits that the plant brings," Nosiglia said.

The Timing Seems To Be Right

Nosiglia considers the change in legislation necessary to guarantee informed and safe access to patients. In addition, from an economic perspective, Nosiglia stressed that the project could boost the sector, which today lacks internal demand, and “support many companies that have been investing for years in stabilizing and registering their genetics, and complying with regulations.”

"If approved, the law will allow international operators to take an interest in Colombia. There are not many countries that allow adult use, and Colombia will be a pioneer. Although this is the case in Uruguay, where cannabis for adult use is legal, what [Senator] Gustavo Bolivar proposes is broader and more dynamic, so there will surely be an interest from North American operators to create alliances and take advantage of this opportunity in Colombia," Nosiglia said.

Nosiglia explained that the law would allow the diversification of industrial activity in the country and the expansion of retail distribution channels, which are currently limited. "Everything that is produced today in Colombia could be sold as something else than exports [of biomass] or extracts, as smokeable flowers, for example,” Nosiglia added.

Merchan added that if the bill passes, it would help companies like Flora to export cannabis for adult use and amortize their investments. “Colombia has more than 25 million people who can potentially use cannabis for adult use. …

Full story available on Benzinga.com

EXCLUSIVE: Colombia Could Soon Legalize Adult-Use Cannabis—Can US Cannabis Operators Take Advantage? on Benzinga