World's Weed Growers Have New Rival to Fear From South America

Updated on
  • Colombia sees companies exporting medical marijuana in 2016
  • Andean nation is also major producer of illegal marijuana
Photographer: James MacDonald/Bloomberg

Colombia, famed for the violence of its cocaine cartels, is planning a move into the more genteel drugs business of marijuana-based oils and creams.

The Andean nation’s climate and regulations make it ideally suited to profit from the incipient trade in legal marijuana, Health Minister Alejandro Gaviria said in a Jan. 8 interview in his Bogota office. The country legalized use of the drug for medical purposes last month.

“This is going to be a new commodity, there’s an emerging global medical marijuana business,” Gaviria said. “This year, we’re going to see international companies coming to Colombia to produce medical marijuana.”

The increasing legal use of the drug in the U.S., Canada and elsewhere creates an opportunity for Colombia to develop an export industry similar to wines in Chile and broccoli and asparagus in Peru, Gaviria said. Marijuana-based pharmaceuticals are used to alleviate pain and nausea stemming from chronic diseases and treatments such as chemotherapy. The highly-regulated industry is a long way from the mass murders and kidnappings that marked the life of cocaine kingpins such as Pablo Escobar.

Existing pharmaceutical marijuana products include Sativex, a spray form of marijuana used to treat symptoms of multiple sclerosis or chronic pain. The drug, developed by GW Pharmaceuticals Plc has been approved for use in 27 countries, according to the company’s website.

In Pictures: Growing Green: Weed from an ex-Chocolate Factory

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A look at a factory once owned by Hershey that now makes products that offer a slightly stronger buzz than a milk chocolate kiss.

Under the new regulation in Colombia, companies need to request licenses to cultivate marijuana seeds and transform the plant into products such as oils and creams, Gaviria said. He declined to say which companies have expressed an interest in investing in the South American country. 

Colombia was already a major producer of illegal marijuana, with much of the farming concentrated south of Cali, the nation’s third-largest city, in mountains controlled by Marxist rebels. Authorities seized 307 tons of the drug in 2014, up from 255 tons in 2010, according to data gathered by the United Nations Office on Drugs and Crime.

Neither has Colombia left its cocaine problems behind. In 2014, the area planted with coca, the raw material for making cocaine, rose 44 percent to 69,000 hectares, according to the UNODC, more than in Peru and Bolivia combined.

— With assistance by Ken Parks, and Christine Jenkins Tanzi

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