Published On: Fri, Aug 5th, 2016

Colombia’s New, Legal Drug Barons Focus On Medical Marijuana

The New York Times reports:

Like many drug barons in Colombia, Federico Cock-Correa wants to sell his product globally. Just 15 miles outside Medellín, Mr. Cock-Correa is looking to replace vast acres of flowers with marijuana plants, with plans to export the harvest.

But unlike the brutal heroin and cocaine trade that once flourished nearby, his operation has the government’s stamp of approval.

Last year, President Juan Manuel Santos spearheaded an overhaul of Colombia’s 30-year-old drug laws, which formally legalized medical marijuana for domestic use. Crucially, the new law also allowed the commercial cultivation, processing and export of medical marijuanaproducts — like oils and creams — although not the flower, the part of the plant normally rolled into a joint.

Officials hope the move will put a dent in Colombia’s drug trafficking business by creating a legal opportunity in an industry historically controlled by the black market. The authorities believe the new law will also help attract investment and give the economy a lift, though it will take several years before the returns on the investments become clear.

“It’s health; it’s science; it’s the opportunity to redeem the name of the country,” said Mr. Cock-Correa, who heads the Colombian arm of PharmaCielo, one company looking to capitalize on the new rules. “It’s a shift from producing the plant that kills to producing the plant that cures.”

Businesses in Colombia like PharmaCielo believe they can establish a foothold in the drug industry, just as their illegal counterparts did in past years. In the United States, the marijuana industry remains bogged down in clashes between local and federal regulation. Though some states have legalized the drug in recent years, the federal government currently bars the import of any marijuana products.


PharmaCielo’s workers checked a crop of chrysanthemums growing under lights. The company is growing flowers as it awaits approval for marijuana cultivation. CreditJorge Panchoaga for The New York Times 

“We think that Colombia can build a successful international business around the exportation of medical marijuana,” Alejandro Gaviria, Colombia’s health minister, said in an email. “The country is ready to participate in this emerging global market.”

PharmaCielo, based in Toronto, was founded in 2014 and in June became the first company in Colombia to receive a license from the government to manufacture cannabis products. It is still waiting for licenses for cultivation.

 Other companies have followed suit. In July, the government granted production licenses to another Canadian company, Cannavida, and a Colombian company, Labfarve-Ecomedics. Unlike PharmaCielo, Labfarve-Ecomedics will focus on the domestic market, which may allow it to start faster since it will not need an export license.
 Once it receives approval, PharmaCielo will start growing marijuana and then process the material into medical products that can be exported to Canada and other countries that allow the importation of medical cannabis. The United States, for now, remains a long way off.
 “Ultimately, this has the ability to be a global marketplace measured in the billions,” said Anthony Wile, a Canadian venture capitalist who is one of PharmaCielo’s backers. Jim Rogers, a co-founder with George Soros of the Quantum Fund, is also an investor.
 Standing on a 32-acre plot of land that will be PharmaCielo’s initial site, Mr. Cock-Correa set out his case for why Colombia is ideal for marijuana production, centered on the country’s advantageous climate and soil conditions. There is a reason that Pablo Escobar got his start in the Colombian drug world by trafficking marijuana.

For over 50 years, the Rionegro region in the Colombian Andes — where PharmaCielo has its land — has been one of the premier locations for the production of cut flowers bound for the United States and Europe. The region accounts for a quarter of all the flower exports from Colombia, the leading supplier of cut flowers to the United States.

Flower cuttings being graded by size, height and diameter. The growing conditions that make Colombia ideal for flowers are also good for marijuana. CreditJorge Panchoaga for The New York Times 

Expansive greenhouses, constructed of simple white plastic tarps draped over support poles and wiring, dot the area’s rich green hills. The fertile volcanic soil nurtures flowers like chrysanthemums and carnations year round.
 At the heart of the company’s plans, though, are the finances.

When production is in full swing, PharmaCielo expects to produce a gram of marijuana flowers for about 5 cents. The same amount costs at least 10 times as much to produce in the United States and Canada.

 In North America, marijuana growers generally have two options: grow the crop outdoors, which produces just one harvest a year, or grow it indoors in warehouses, which is energy-intensive.
 Companies investing in Colombia, however, want to rely on the country’s natural attributes to break that mold.
 Marijuana plants move through the vegetative stage into the flowering stage when lighting conditions change. They grow larger, and their yield increases, the longer they are in the vegetative stage. They finally begin to flower when they are exposed to 12 hours of sunlight, followed by 12 hours in the dark, typically in the spring or summer.
 To achieve the 12-hour cycles, American and Canadian growers who want multiple harvests must rely on artificial lighting. But because it lies along the Equator, Colombia has more days that naturally follow the 12-hour pattern than countries that are farther north, like the United States and Canada.
 PharmaCielo plans to supplement the sun by using low-wattage LED bulbs to effectively trick the plants into staying in the vegetative stage.


A worker harvesting chrysanthemums in May, just after the heavy Mother’s Day demand.CreditJorge Panchoaga for The New York Times 

“Our growth comes from sunshine,” said Marcelo Siqueira, the acting chief operating officer at PharmaCielo Colombia. The company, as a result, expects to have four harvests a year at substantially lower costs than North American rivals.

A network of reservoirs, meanwhile, help conserve water and, by extension, control costs. The fertility of the soil means the company will be less reliant on products like peat moss and shredded coconut fibers to help plants grow, in that way saving money and cutting down on waste.

 For now, however, PharmaCielo is in a holding pattern. As it awaits the necessary licenses, Mr. Cock-Correa is planting flowers on the company’s 32 acres.
 Mr. Cock-Correa, who has been in the flower business for 30 years, says the process of switching the flower farm to a cannabis farm is straightforward. There is a trained work force, the infrastructure is in place and the soil is primed and ready for planting.
 Once it gets the right licenses, the company estimates that it could be managing 600 acres of active cultivation in two years. Mr. Cock-Correa wants to contract with other nearby farms that currently grow flowers.

On a tour of the initial plot in May, the dirt beds still had flowers in them. Workers were hurrying to finish cutting and packaging new blossoms in time for Mother’s Day.

“All of this,” Mr. Cock-Correa said, “will be cannabis within a year.”

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