Such legislation takes a further step, building on last year’s Decree 811 creating a licensing scheme and legalizing export of commercial marijuana, after allowing its use for scientific and medical purposes in 2016 with Law 1787.

Signed February 20, the new law enables domestic production and marketing of non-psychoactive cannabis products, and further defines import and export rules.

“This resolution allows, defines and establishes all the mechanisms and procedures for the industrial use of the cannabis plant in sectors such as food, beverages, alcoholic beverages and dietary supplements, defining, of course, that these uses have to do with the non-psychoactive component,” said Colombian President Ivan Duque.

“There has already been progress in credits for small and medium-sized producers. These credits continue to be developed through the Agrarian Bank, where cannabis producers are also provided with all the issues of foreign exchange management, monetization and marketing from Colombia,” The president continued.

Colombian Health Minister Fernando Ruiz Gómez added that the regulation is important for the safe development of the legal cannabis industry, including oversight by Colombia’s food and drug regulatory agency INVIMA (Instituto Nacionál de Vigilancia de Medicamentos y Alimentos).

“The different sanitary provisions that must take place by INVIMA, with good manufacturing practices, and all labeling and packaging requirements, are fundamental for all the progress of the industry,” said Dr. Gómez.

“This opens the possibility, with the components of the cannabis plant and its non-psychoactive derivatives, of producing dietary supplements complementing the existing dietary supplements in Colombia, in order to advance in the entire process of supporting nutrition and support to people who require dietary supplements”.

Cannabis Industry Pleased

Bill Petron, CEO of PharmaCielo (TSXV: PCLO) (OTCQX: PCLOF), a Colombian cannabis producer with Toronto headquarters commented on the news, saying in a statement: “The passing of Regulation 227 is a historic development for the Colombian cannabis industry, opening the large and growing global dried flower market as well as multiple CBD-based opportunities, to Colombian producers. The Colombian government has consistently demonstrated its desire to build this industry into a global leader, and in our opinion the announcement makes Colombia the most export-friendly and competitive jurisdiction in the world.

Dried flower accounts for up to 50% market share in most mature cannabis markets globally and represents a massive opportunity both for the Colombian industry, and PharmaCielo. With scalable cultivation and processing capacity in place, a structural cost advantage, and the sophistication to ensure consistently high-quality products, PharmaCielo is positioned to capture market share against current international exports from markets like Canada.

The government’s revised approach to the quota system will both ensure speed to market, as well as greater efficiency throughout the sales process. We expect 2022 to be a very exciting year of growth for PharmaCielo, as we launch and expand dried flower exports, bringing global patients access to high quality, affordable medical cannabis products.”

Above photo: Wilson Ruiz Orejuela, Minister of Justice and Law, and Juan Gonzalo Botero, Deputy Minister of Agricultural Affairs of the Ministry of Agriculture and Rural Development join President Ivan Duque at the podium and health minister Dr. Fernando Ruíz Gómez announcing the legislation.

Advances made under the credit facility will bear interest at a rate of 8.0% per annum. The credit facility is unsecured and is repayable upon a default by Avicanna or the demand of Bondue. The credit facility is intended to be used for general working capital purposes.

Avicanna CEO Aras Azadian told news outlet Benzinga that “The credit facility provided by our partners in Colombia is designed to ensure that Avicanna continues to execute on its global business plan without interruptions, and with less reliance on the capital markets during this period of correction in the sector”

Bondue is a “related party” with Avicanna and the credit facility is a “related party transaction.” Earlier in the years the two companies announced plans to build a new 11,000 square foot site in a free trade zone in Santa Marta, Colombia. “Inmobiliaria” in the name Inmobiliaria Bondue means “Real Estate” in Spanish.

The operation of the new site will be conducted under a proposed new subsidiary, which will be 60% owned by Avicanna and 40% owned by Inmobiliaria Bondue.

Avicanna’s two majority-owned subsidiaries, Sativa Nativa S.A.S. and Santa Marta Golden Hemp S.A.S., both located in Santa Marta are the base for Avicanna’s cultivation activities. These two companies are licensed to cultivate and process cannabis for the production of cannabis extracts and purified cannabinoids including cannabidiol (CBD) and tetrahydrocannabinol (THC).

Avicanna’s research and development and cultivation activities are focused on the development of its key products, including plant-derived cannabinoid pharmaceuticals, phyto-therapeutics, derma-cosmetics and extracts (defined as plant-derived cannabinoid extracts and purified cannabinoids, including distillates and isolates), with a goal of eventually having these products manufactured and distributed through various markets.

Above image: Avicanna’s Pura Earth derma-cosmetics line of CBD products are already being sold in retail outlets throughout Colombia.

Through the country’s formal “quota allocation” process, which is based upon guidance by the International Narcotics Control Board (INCB) and ultimately allotted by the government in Bogotá in accordance with a company’s production potential, Khiron Colombia SAS has now acquired the regulatory approval necessary to start growing what it characterized as “a variety of medical grade cannabis strains,” including tetrahydrocannabinol (THC) and cannabidiol (CBD) strains.

READ MORE: Khiron Life Sciences Transfers 100,000 Shares to Settle Dispute with PharmaCielo

These strains have been chosen specifically to target “patients identified as having unmet medical needs within the Colombian market of 50 million people and the Latin American market of 620 million people,” according to a statement from Khiron Life Sciences.

According to Khiron, the government approved the company’s full initial quota request. The company says that it plans to increase the volume of its request in its proposal to the government next year.

“The granting of quotas for cultivation is part of the ongoing involvement of the government of Colombia to ensure an orderly and controlled market for medical cannabis,” said Alvaro Torres, president and CEO of Khiron Life Sciences Corp. “I would like to thank the government for its continued support.”

(Photo credit: eujava / Pixabay)