Colombia may soon dominate a popular drug export, but unlike the base powder the nation has become known for, this new market will be 100 percent legal – dishing out relatively safe and non-toxic products, for all practical purposes.
Legal weed is nothing new in Colombia. Since 2012, anyone there could possess up to 22 grams of dry flower without facing any legal consequences, and residents may grow up to 20 plants. Compare that to legal US states that typically cap an individual's home grow between six to 12 plants. What's new is the country's medical market, which will be strictly concentrates.
In 2015, the Colombian government passed a law to legalize and regulate marijuana for medical use. The law allows exports of marijuana products for medical or scientific purposes, making Colombia one of the few nations, along with Canada and Israel, that will legally ship its weed across international borders.
If you're a Netflix junkie, you've probably stumbled on a show called Narcos, a drama about the fall of cocaine kingpin Pablo Escobar. Escobar set up shop in Colombia, where he created a cartel empire that supplied 80 percent of the US's coke. His empire is how Colombia became synonymous with the illicit drug trade, but in reality, a lot of that is ancient history now. Although the Colombian government is still wrestling with drug smugglers, it may have developed a novel method for combating the straggling black markets that have long plagued the nation – by growing high-quality cannabis for medical concentrates.
In 2016, the government signed a peace agreement with FARC, a communist guerilla organization that's waged a civil war against the Colombian government since the 1960s. FARC funded itself through the illicit drug trade, and given the new medical marijuana bill, the treaty marked the end of a cash cow for the rebels. The treaty also forked over the FARC's largest agricultural sites to the Colombian government, and smaller marijuana farmers are considering a switch to government-approved cultivation licenses, too.
Enter Khiron Life Sciences Corp., a Canadian company that's bringing North American genetics and best practices to Colombia's fledgling medical marijuana industry. Khiron is the first company in Colombia to receive licenses for medical cannabis cultivation, extraction, and distribution. The company also made waves in September when it appointed Matthew Murphy, the former Chief of Pharmaceutical Investigations at the US DEA, to its advisory board. Murphy's appointment indicated Khiron was taking its new role in Colombia seriously by bringing in an American expert on pharmaceutical compliance.
MERRY JANE spoke with Alvaro Torres, the CEO of Khiron and a former industrial engineer, by phone to find out how Colombia and Khiron plans to transition into a regulated medical cannabis network, both in the country and internationally.
This interview has been edited for length and clarity
Above, a photo of Alavor Torres of Khiron Life Sciences Corp.
MERRY JANE: To start, can you tell me about the general medical marijuana climate in Colombia?
Alvaro Torres: About three years ago, Colombia, through the Ministry of Health, decided to introduce a medical cannabis program, starting with issuing regulations for medical cannabis. After strengthening the current laws to ensure there would be products available to the public and medical experts, they made a medical program for high-THC and low-THC products.
This came from a very long conversation in Colombia with all the peace agreements that have been discussed and implemented, as well as how to create a new industry from extraction technology – given the downward spiral with gold and petroleum [production in Colombia]. They asked, how do we make drugs from cannabis within the medical system? How do we make a medical marijuana industry that will benefit the people of Colombia? How could Colombia position itself to compete in the global medical cannabis system?
Over the years, the government has been issuing regulations, organizing among the Ministry of Agriculture, the Ministry of Health, and the Ministry of Justice, for creating very thorough laws that allow companies to research, cultivate, and extract products based on medical cannabis of low THC less than 1 percent and high THC that is greater than 1 percent.
Where is Khiron at in the process right now, in Colombia?
Right now, we are continuing the licensing [process] and we are completing our facility. It should be completed by November of this year.
Colombia has been a focal point of the War on Drugs since Nixon started the campaign in the 1970s. How is the government approaching medical cannabis today?
I can say the government is supportive of the industry, and they are continuously looking at new companies and how to optimally generate new regulations. We have not seen any obstruction from the governmental agencies.
With respect to the industry in Colombia, this is precisely why the government decided this would be an extract-only market. By making it an extract-only market, and regulating it through the Ministry of Health, what the government is effectively doing is going through the [nation's] medical system. In Colombia, for safety, there is INVIMA (the Colombia National Food and Drug Surveillance Institute). INVIMA is one of the few Level Four World Health Organization government administrations.
By doing it as extracts, a company such as Khiron is not going to be engaging in any sort of competition with any of the illegal activities that have been happening in the country. All the news about Colombia, all the Netflix shows currently being broadcast, it's a much more involved country [fighting the drug war] than it was 30 years ago. Our mission at Khiron focuses on the patients; that mission allows the government to pursue something it passionately believes in.
We've had some issues in the US with high taxes contributing to the continuation of the black market. How is Colombia addressing pricing to combat its black market?
If you look at the way the government is regulating this country's medical system, high prices are not something they're necessarily going to be looking for. The legal prices for medical extracts in Canada, for example, is 11 cents per milligram. In Colombia, the extracts are being sold at 8 cents a milligram, and the market is aiming at 4 to 5 cents a milligram.
Colombia has a tremendous agricultural opportunity due to access to an abundance of water, 12 hours of sunlight, lowered labor costs – the production costs of cannabis is five to ten times lower than you have in the United States.
The government has additionally positioned itself as a market for exports. We believe that the country will be able to produce high quality cannabis worldwide at a very low price. Colombia cannot export to the United States because that is [currently] illegal, but with what's happening in Canada [where cannabis exports/imports are legal], I think Colombia will be able to provide quality products at very low costs.
Does Khiron have plans to expand outside of Colombia?
We're a Canadian corporation that is currently focused on Latin America. Our first market is Colombia because they have the most regulations. But we are looking at Argentina, Mexico, Peru, and some other Latin American countries. We are meeting with their regulators and planning to enter their markets in the next year.
It's a market of 620 million people. We can meet their needs for these types of products. Most of their [conventional] medications are made at very high costs, or the medications do not work very well.
How are the majority of Colombian patients planning to ingest cannabis in an extract-only market?
The Colombian government created the market as extracts-only for medicinal purposes. Patients that are currently being prescribed on a compassionate basis are also using cannabis extracts, mostly oils and topicals. The regulations allow companies to sell both high- and low- THC products, without any restrictions on CBD.
We will begin our product sales with oils, as it is currently the most accepted form of product delivery, but our plan is to continue to improve on delivery technologies. We will be studying the feasibility of gel caps, tablets, and other more effective delivery methods.
Will Khiron have to deal with any special advertising restrictions for its products, like we've seen in the US and Canada? (No TV spots, no logos at public events, etc.)
We will have some restrictions on the advertisement of specific products, but not on the company or its brand. However, our team is very experienced in developing and launching branded pharmaceutical products, and we will be relying on building relationships with medical associations and developing effective advertising and marketing programs that allow us to communicate our brand values to our patients along with promoting the scientific and medical benefits of our products.
Are opioids a problem in Colombia as they are in North America? Is the government looking at medical cannabis as a potential alternative to opioid prescriptions in Colombia?
Opioids are not a major problem yet in Colombia, but one of the reasons the government enacted these regulations is to be able to offer natural, more affordable medical products that can reduce dependency on opioids before it becomes a problem like it is in the United States.
For more on Khiron Life Sciences Corp. visit the company's website here
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