Diving Into Colombia’s Weird, Frustrating Medical Market

Aerial view of the city of Bogota in Columbia
Source: Shutterstock

When you think of Colombia’s various, well, consumable exports, marijuana may not be the first that comes to mind.

Although medical marijuana has in fact been legal in Colombia since 2016, domestic sales did not start until earlier this year, and the program has been rife with challenges and setbacks: obtaining a medical card is extremely difficult, you can’t buy flower at all, THC products are nearly impossible to purchase and the export market – driven by Colombia’s ideal growing climate, and cheap labor – has been undercut by a glut in the global hemp market.

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Despite these challenges, a handful of multi-national, well-funded companies are making a go of it, holding on for dear life until regulations ease, or the country legalizes recreational cannabis (a debate currently taking place in Colombia’s national congress).

“In many cases here, you’re trapped. You have a product, maybe a good product, but no one to sell it to,” pointed out Mario Ciardelli, the CEO of LaSanta Botanicals. Located north of Bogotá with additional leadership in Canada, LaSanta is one such company hoping to wait out the issues that have plagued the nascent industry.

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Ciardelli, who has a background in a wide range of industries including health care and real estate, takes pride in the company’s adherence to environmental standards, their greenhouse-grown CBD-rich plants (only 2% of their plants yield THC, and those are being used primarily for research purposes) and their commitment to bring quality products to market.

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To learn more about the country’s exasperating medical program, the enormous potential for their export market and what the future has in store for Colombian cannabis at large, we caught up with Ciardelli for a wide-ranging and highly-illuminating chat.

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This conversation has been edited for length and clarity.

Are there aspects of your past jobs that inform your current role at LaSanta?

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Cannabis in Colombia is highly regulated, similar to health care or aviation. Everything needs permission. [Some] of us really want to push this forward and seize the benefits and the opportunity, but a significant part of the country wants nothing to do with it because we’ve been hurt by all of the drug trade.

Courtesy of La Santa

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Is it fair to say that cartels gravitate towards cocaine instead of marijuana because it’s more profitable?

That’s partially true. Whatever you have demand for, it’ll get produced. Anything from poppy to coca leaves to marijuana, you can grow it anywhere in the country; it’s such a fertile place. Although cannabis has decreased in importance for those guys, there’s still a lot of [production for black market use].

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The logical thing would be to just open up [the market]. That’s a big discussion going on in congress. But we’re very conservative in many respects.

Is it easy to obtain a medical card in Colombia?

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Actually it’s very difficult because only very few doctors or physicians are experienced in cannabis use. The only way to get cannabis for medical use is via a personalized prescription.

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It has to go to a prep pharmacy to be mixed and blended for you specifically. The country has [legalized medical marijuana] reluctantly. They tried to put safeguards [on the program] to keep it as medical as possible.

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That’s insane! Is the majority of your product intended for export?

The majority of what we’re growing is going to be exported. We’re in the midst of sending out samples, samples and more samples everywhere (laughs).

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Everyone talks about Germany and some European countries, but when you put together volumes being consumed in the medical market, it’s ridiculously small.

A lot of companies with relationships abroad have gotten involved and have investments. People who have sales channels, they are not ready yet [to utilize them]. We are among the few companies with commercial products, distillates and extracts [that we are ready to sell].

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What’s selling the most?

It’s not legal to sell or export flower. There’s not a significant market for that yet locally. Mostly it’s extracts or distillates or isolates.

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Colombia has been an economy that – as is typical of a not fully developed country – has been exporting raw material goods for many years, and we’ve never grasped the possibility of turning those products into actual value-added products that would yield a more stable market.

One of things they really wanted to do when they put the medical marijuana program together was [ensure we don’t] become a country that grows fantastic flower and then export it and have someone else turn it into someone else and reap the benefits.

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Although we have a provisional license we need more provisions and licenses to export THC-active extracts. The difficulty isn’t just here; part of the difficulty lies with the country we’re exporting to. It’s been a slow learning curve that’s taken a large toll on producers who invested, made an effort, made a final product.

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In the end some of those companies have gone under and some will go under. You can only manage so long spending, spending, spending, taking money from investors. It’s been tough staying afloat. Only companies that raised a lot of capital at the beginning are doing fine. Or others like ourselves that have been able…to secure capital to make it through tough times and to the other side.

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Would you say that there isn’t a future for small growers?

I wouldn’t say that. I just think that it’s taken way longer than anyone expected. Many of these companies, especially smaller ones…if you don’t have the capacity to endure, enduring capital, then you’re probably going under.

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That sounds like a lot of cannabis businesses in the US.

It’s even worse because a lot of [businesses] have nowhere to go: You put in your money, obtain your licenses, have your land, but there’s no one to sell to. In the US, at least in some places, there’s a legal [rec] market. Even if you have to sell at lower prices, there’s something to do with the product.

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The global [cannabis export] industry is difficult because of the US. When you talk about medical it’s basically CBD. The US is pouring out thousands of acres and litres and kilograms and pounds of hemp. That’s led the worldwide market to tank.

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When we put together this company and built a business plan, the rule of thumb was once you had extract, the price per liter was $10,000 US. That’s what everything was built on.

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Today that litre will probably be below $2,000 because hemp producers [primarily] in the US are pouring out such huge amounts of hemp and extracting CBD and turning it into isolate. You can get a litre for $600 in some places.

There’s a big question mark if [our business] is going to be viable or not. Everyone’s betting on US farmers and some Canadian farmers walking out of hemp. This year could probably be the last crop for many of them; don’t they make a lot of money. The market will get balanced again; that’s what everyone’s betting on.

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On a cheerier note, I was hoping you could walk me through some of the environmental sustainability practices employed at LaSanta?

Many people here are experimenting with outdoor growing. It’s interesting but tough because although the climate is very stable throughout the year because we’re close to the equator and have 12 hours of day and night which is great for the plant and for growing, the weather has been changing and become somewhat more of a challenge. We are growing indoors in greenhouses. The only thing we need is artificial light to extend daylight for 4-6 hours depending on the cycle and genetics.

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The farm where we have the majority of our operations is originally an organic tomato farm.

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We grow our own humus [soil] with worms. We have a very green and completely natural process. We collect stormwater and have huge reservoirs of stormwater. We don’t take water from anywhere but rain. There’s very low humidity, so diseases or fungus, problems that others have, we just don’t have.

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We pay above minimum wage. We’re employing 60-70 families from the same town. We’re talking about sustainability as a whole.

Courtesy of La Santa

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That’s awesome. Mario, is there anything you want to add before we wrap up?

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Although it’s been hurt by the pandemic, globalization is a fact. Within the same side of the world we’re very much connected. [Growing cannabis] is most likely way better executed here than [anywhere else in] North America because of cost, productivity and the sheer complexity of seasons [elsewhere].

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The industry is in its early stages. We need to be mindful that nobody is going to make it alone. We need to connect and establish supply routes and distribution routes in Colombia.

I believe our future lies in getting together with companies in many countries and becoming providers of either raw materials or intermediate materials or complex things that are better done here. That’s what we’re setting ourselves up to do. That’s what I think we’ll end up doing extremely well.

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