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Colombia Authorizes First Cannabis Export To Canada: 'This Event Has Been Two Years In The Making'

February 7, 2019 2:42 pm
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In one of the most anticipated moves in the international cannabis space, Colombia is set to begin exporting cannabis to Canada.

The country is poised to become one of the largest producers and exporters of marijuana in the world on the basis of the export quota assigned by the International Narcotics Control Board last year.

As per the INCB, Colombia is authorized to grow 40.5 tonnes per year, or roughly 44 percent of the world’s legal marijuana.

'A Testament To Clever Leaves' Efforts'

The first Colombian company to receive approval — from both Health Canada and the Colombian National Narcotics Fund — to export cannabis to Canada is Ecomedics S.A.S., doing business as Clever Leaves. Exports will start in mid-February, the company said. 

Benzinga had the chance to discuss the move with Andres Fajardo, CEO of Clever Leaves.

“This shipment, the first legal [one] of its kind, is a testament of Clever Leaves’ efforts to build its operations at scale and with global quality standards, innovation throughout the value chain and strong commitment to the patient in Colombia and the world,” he said.

"We believe that this will help position Clever Leaves and Colombia as relevant players in the global cannabis industry; it demonstrates that we can meet international quality standards, are able to fulfill stringent regulatory requirements and have a reliable supply chain.”

Related Link: Why Cannabis Investors Are Eyeing South America

Growing Cannabis Where It Makes Sense 

Northern Swan Holdings, a financial sponsor of Clever Leaves, helped secure the import permit with Health Canada.

Northern Swan CEO Kyle Detwiler said the arrangement is two years in the making. 

“This event has been two years in the making,” he said. “We have engaged multiple law firms and government regulatory consultants, and I believe most CEOs of Canadian cannabis firms never thought this would happen. I think there was disbelief that an import market would be created, which is odd because one of the marketing points for many Canadian firms is the export potential for Europe.”

For Detwiler, credibility is of utmost importance. Consequently, he said the first round of exports will be used for testing the raw material only and will not be used for commercial purposes.

“We will eventually test our extracted product to show to governments globally that our pharmaceutical standards in Colombia are equal, if not better, than most operations in Canada or the United States,” the CEO said. “I cannot think of one cannabis company in the United States which has built its assets to be pharmaceutical-grade."

The aim now is to prevent recreational dispensaries from running out of stock, and this represents an opportunity in markets such as Germany that many American cannabis companies are unaware of, Detwiler said. 

In the CEO's view, the "invisible hand" of the free market will eventually prevail — meaning that cannabis will one day largely be grown it the areas where it can grow naturally. 

“This is a reminder that it does not make sense to build $100 million-plus cannabis growing facilities in Canada or even the U.S.,” he said.

“$1 invested with us generally goes about 10 times further than your typical cannabis company, because our capital costs are so much lower and our team has a successful track record investing over $3 billion of capital at Blackstone, KKR and Och-Ziff. We were not cannabis operators learning business; we were successful private equity investors and managers who learned [about] cannabis.”

Other publicly traded cannabis companies with investments in Colombia include Khiron Life Sciences Corp (OTC:KHRNF), Pharmacielo Ltd (CVE: PCLO), Aphria Inc (NYSE:APHA), Wayland Group Corp (OTC:MRRCF), Chemesis International Inc (OTC:CADMF), Cronos Group Inc (NASDAQ:CRON), Canopy Growth Corp (NYSE:CGC) and Aurora Cannabis Inc (NYSE:ACB). All stand to benefit from the commencement of cannabis exports to Canada.

Related Link: Israel To Allow Medical Marijuana Exports

Photo courtesy of Clever Leaves.

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