Starting back in 2016, Colombia bet big on the cannabis industry by creating a robust legal framework meant to facilitate the cultivation, manufacture, and export of cannabis-based products for medical use, and also to spread some of the resulting wealth to small growers.
But years into the legal program, small growers have yet to prosper.
One problem is a cumbersome bureaucracy, which has slowed implementation of the law, and government bodies that have lacked the capacity to promptly process business license applications. In 2018, cultivators requested an average of ten licenses per month. Last year, that figure soared to forty-one. The flood of applications has led to huge backlogs and lengthy delays, to the extent that what took a month two years ago can take six months today.
In addition to administrative stumbling blocks, the costs of complying with the regulations around converting illicit operations to legal ones have deterred small farmers—mostly in the hillsides of the Cauca Department, a region historically affected by drug trafficking—from shifting to legal cannabis production. Farmers who do want to make the transition are struggling.
Indepaz, also known as the Institute of Studies for Development and Peace, a Bogota-based peace-building NGO, reports that cannabis is illegally cultivated in more than 12,000 parcels belonging to Caucan indigenous communities, an indication of the region’s heavy economic reliance on this activity. Close to 50,000 people in the southwestern region of Cauca in Colombia make part of their living from cannabis, and most of them are willing to move into the legal market, according to the NGO.
But the government sets a high bar. Plants cultivated illegally before the passage of the 2016 medical cannabis law can’t be used in the legal medical cannabis program. So land cannot be licensed for cultivation unless it can be proven that no previously grown illicit plants remain. Compliance with that law would require the destruction of many small and medium-scale cannabis crops. And for some, starting from scratch is not economically possible.
“Regulations do not take into account the context of traditional small-scale farmers in the emerging Colombian market of medicinal cannabis, especially of those who were growing the crop illegally,” Diana Valenzuela, a researcher for Indepaz, told Cannabis Wire.
Though the resources required for the transition are expensive, government aid is scant. The government has considered setting up a fund for small farmers to receive scientific, technical, and commercial support, and different government entities have striven to train farmers in the complex regulations surrounding medical cannabis. Meanwhile, however, the administration is working on a draft decree that, according to experts, will increase the paperwork and bureaucratic hurdles required to manufacture cannabis products. If the decree is issued, such legislation would further block small farmers’ efforts to join the emerging cannabis industry.
Farmers “will not succeed without technical assistance, training, and skills to develop programs, for example, on proper cultivation techniques, environmental conservation, preservation of local varieties, and marketing opportunities,” Valenzuela said.
They also need money. In the medical cannabis law, small scale cannabis grows are defined as under half a hectare (roughly 1.2 acres). According to Fedesarrollo, a Colombian economic and social policy research institute, half a hectare of medical cannabis demands an investment of between $150,000 and $200,000 in US dollars—three to four times the investment traditionally required by a small scale farmer that grows other crops.
These high costs include required permits, land leases, expensive cultivation technology, and compliance with demanding safety and quality control protocols. Growing cannabis for medical purposes in Colombia means navigating the rigorous requirements of the Ministry of Health; the Ministry of Justice; the National Narcotics Fund; the Ministry of Agriculture; the Colombian Agricultural Institute; and the National Institute for Drug and Food Surveillance, the Colombian equivalent of the US Food and Drug Administration.
So some growers have sought strength in numbers, joining forces in cooperatives or associations. “Medium and small-scale growers are hardly able to face the high costs, standards, and the investments required by the industry if they are not associated,” Miguel Santaella, a Bogota-based cannabis startup consultant, told Cannabis Wire.
He says joining together allows small-scale growers to pool resources and knowledge, to acquire technology, and to make collective purchases of land and equipment. And yet despite joining together into partnerships, many individual cultivators still fail to gain access to enough resources to comply with the standards required by the market.
Thus local farmers fear they will be squeezed out by a few large producers. And they might be right.
Currently, the Ministry of Justice databases have registered more than 4,000 small and medium scale medicinal cannabis growers, producers, and retailers but, so far, big foreign companies such as PharmaCielo, Canopy Growth, Khiron, and Clever Leaves have dominated the business. By September 2018, two years after the law came into force, at least seven licensed Canadian cannabis producers had opened their business in Colombia.
Some growers have attempted to band together and work in harmony with these larger producers, though with limited success so far.
For example, Caucannabis, a cooperative made up of fifty-six individual members, and one of the first small-farmer associations to obtain a license to cultivate cannabis, says it has yet to benefit from a partnership agreement made in 2017 with PharmaCielo.
The Canadian-owned PharmaCielo brought to the table financial resources and knowledge about developing an industrial scale business in the medicinal cannabis industry, while Caucannabis would contribute its expertise in cultivation and farming in Colombia.
The plan was for PharmaCielo to pay for the cooperative’s $10,000 (USD) license to cultivate cannabis, which it did, and to take on the infrastructure costs of building a cultivation site. Caucannabis would provide the labor and operational management to the greenhouse facility, which would be jointly operated by both partners.
The partnership would guarantee PharmaCielo’s compliance with the law that requires that 10 percent of Colombian production must come from small and medium-scale farmers licensed to grow cannabis. On the other hand, members of Caucannabis expected that cooperation would create well-paid jobs for their community.
“We can’t do this alone; we need the support of foreign companies because we don’t have the money to make greenhouses or laboratories or even to pay the salaries of our workers,” says Blanca Ruth Riveros, president of Caucannabis, which is based in the department of Cauca.
But this partnership has not yielded any benefits so far. In fact, Caucannabis has yet to plant its first cannabis crop.
“This agreement was going to allow us to have our own business, work for our own company, and also have a decent wage,” says Riveros, for whom three years of waiting has left nothing but disappointment.
Members of the cooperative blame the very extensive requirements and paperwork for the delay. But they also say they would like for PharmaCielo to show more willingness to comply with the agreement.
According to PharmaCielo, regional security issues have impeded its ability to move forward as planned with the partnership agreement.
“We may have been a little overly optimistic about how fast we could move with the partnership,” says David Gordon, PharmaCielo´s Chief Corporate Officer, pointing to the increase of violence in recent years triggered by criminal groups that dispute the territory due to its crucial location as a drug trafficking corridor.
The violence, Gordon told Cannabis Wire, “has made travel and transportation virtually impossible and it has also affected our ability to build out the infrastructure.”
Gordon says that other regional circumstances—like precarious road infrastructure and a very “rural environment”—have also deterred their operations in the region.
Meanwhile, PharmaCielo built its own cultivation facility at the outskirts of Medellin, in the flower producing region of Rio Negro, far from Cauca and without many of the hurdles that they say have led to delays there.
So far, the autonomous participation in the industry of small-scale cannabis farmers is a mere aspiration. Farmers who, like the members of Caucannabis, are license holders and possess a plot of land, are still forced to work for big companies because they lack the resources to develop their own businesses. Caucannabis members, for example, work in other cannabis and coffee farms while they wait for the opportunity to make use of their own cannabis license.
“We cannot pay day laborers for our business yet,” says Riveros, “so we must work as day laborers ourselves, in other people’s companies.”
