Cannabis cultivation: a good business opportunity to invest in Colombia

Types of Grow

Cannabis has taken a surprisingly new role in Colombia. No longer seen as a source of conflict, the country has become a meeting center for local and foreign investors that see opportunity in the emerging medicinal cannabis market and seek to support its development. 

Taking off in early 2017, foreign investment in legal cannabis is still a relatively new phenomenon. Ever since, large North American cannabis companies have shown interest in the medicinal marijuana industry, and have increasingly searched for abroad locations where plants can be grown easily and cheaply; Colombia seems to fit the bill. 

Why Is This Industry a Good Business Opportunity?

The emerging medicinal cannabis sector is showing historical profit margins, with an aggregate annual income of approximately 30%. After the age of gold, alcohol legalization, the industrial revolution and the phenomenon of the web, medicinal cannabis is predicted to generate an economic and cultural transformation in Colombia, Latin America and across the world. 

Why Colombia?

Colombia, due to its equatorial climate and its steady 12 hours of daylight all year round, is the perfect fit for cannabis cultivation. Moreover, in comparison to other countries, Colombia’s land and labour is relatively cheap and relies on skilled rural workforce who possess extensive experience in the cut-flower industry. 

While in other locations such as North America and Europe, cannabis growers must invest more money in climate-controlled greenhouses to combat harsh winters, Colombian growers can dramatically reduce their costs by taking advantage of their ideal climate. For example, in Colombia a gram of dry flower is produced for around $0.50 while in Canada the costs can be as high as $2.

Besides location advantages, Colombia owns 350 grantable licenses as well as advanced regulations for Cannabis consumption and production. This has naturally led many large North American cannabis companies to invest over $400 million in Colombian cannabis cultivation in the past years. 

Muisica Capital Group and Prohibition Partners predict that by 2028 the cannabis industry in Latin America could be worth $12 to 13 billion. This is why foreign companies, looking for good business opportunities, have been investing in Colombia, worth approximately $359 million in total, through 13 brand new projects since January 2018.

Some foreign companies have announced new investments in Colombia over the past 16 months, including Canadian enterprises such as LaSanta Botanicals, PharmaCielo, Cronos Group and Canopy Growth. Their goal is to catch a market share of Latin America’s 600 million inhabitants, as each nation modernizes its legislation on medicinal cannabis.

Cannabis cultivation in Colombia has reached fever pitch with some local media reports suggesting the country could supply two-fifths of the world’s marijuana and earn more from it than it does from coal or cut flowers. Farmers have even been encouraged to switch out of traditional crops like coffee and bananas and grow cannabis instead.

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