Next month, Canada will be the first country to legalize cannabis for recreational use. Companies selling or investing in the commodity are hoping to make a massive fortune. Call it the green gold rush.
Since the winters in Canada are long and cold, it does not offer the ideal conditions for growing weed. Ambitious Canadian companies are heading south, mainly to Colombia, to set up cannabis growing plants. Medellin, Colombia, once drug lord Pablo Escobar’s hometown and frontline of a long war on drugs, is now growing cannabis legally. The Canadian firm PharmaCielo Ltd. has been cultivating medical marijuana in its Medellin facilities since 2015. Now, it is one of seven Canadian firms to expand into the recreational cannabis trade. These companies have invested $100 million in building these Colombian facilities, where production of a gram of weed is 5 cents, versus $1.50 in Canada.
Colombia, once the scourge of drug enforcers, is now at the forefront of the new, legal cannabis trade, thanks to Canada’s plan to be the world’s dominant cannabis supplier. Colombia is viewing marijuana has a financial hope to bring legal prosperity to its county. With ideal growing conditions, a population experienced in drug production, and low wages, Canada is viewing Colombia as a sure and bountiful investment. The plan is to grow cannabis both for domestic recreational sales and export to countries where the use of medical marijuana is legal.
Although many are seeing dollar signs, the Colombia investment venture is not without risk. It is, after all, the site of years of bloody drug wars. Legal marijuana facilities could be seized or invaded by corrupt drug lords. Colombia has barely recovered for its drug cartels and death squads. Certain parts of Colombia are still under violent and deadly sieges.
Former Colombian president Juan Manuel Santos legalized the production of medical marijuana in 2015, indicating that legalization would cut into the profits of the drug cartels. With legalization of recreational cannabis becoming a reality, current President Ivan Duque is unlikely to interfere with Canada’s plans for growing weed in Colombia. Quite simply, cannabis will become an extremely profitable commodity for everyone.
The Canadian company Khiron intends to produce 8 tons of marijuana annually at its Bogota facilities. It will be selling prescription cannabis to tens of millions of medical cannabis patients in Latin America and Europe.
Canada’s PharmaCielo is expanding its production of recreational weed to weed-infused cosmetic products for South American women, who are known to spend a huge amount on creams and other beauty items. The company has invested approximately $40 million in its Colombia weed-growing facilities and has hired 150 people to grow and produce the valuable commodity. It expects profits of around $70 million by 2019. The entire cannabis market in Colombia could grow into a $2 billion annual business, and Canada has placed itself in a prime position to rake in the green.
Investors, too, are seeing dollar signs. The market research firm Brightfield Group is anticipating that the cannabis market will grow to $31.4 million by 2021. This is good news for Canada, since a large number of countries who plan on legalization of cannabis lack growing facilities. That means that the partnership between Canada and Colombia will fill a huge global need. Colombia is creating much-needed jobs, and Canada is ready for a major global export of a much-wanted product.
Is the cannabis venture risk-free? Drug cartels and illegal drug dealers still function in Colombia. How well they function in a legalized environment remains to be seen.