Recreational cannabis might catch the headlines but the truth is that medicinal cannabis is still one of the most important parts of a booming sector. Almost every US state and European nation, two of the biggest markets for cannabis, have legalized medical cannabis. This means that it will remain an important driver of growth for many companies.
The American market continues to grow
In the US, companies like GreenStar Biosciences Corp.’s (CSE: GSTR) are seeking to hit both the recreational and medicinal markets. Through their first tennant partner Cowlitz, a Washington state based producer and processor of cannabis products, GreenStar has already made successful moves into the medicinal market. In 2018 Cowlitz recorded an impressive revenue of $14.6 million after just five years of operations.
GreenStar’s focus is on identifying, and investing in promising cannabis companies. By leveraging expertise from the Canadian cannabis sector the company is able to apply proven strategies that will help speed up growth, and dominate a particular market. GreenStar expects to target strong players in individual states and regions and help them dominate their specific market, allowing investors access to a portfolio of best in class North American cannabis companies.
The American and Canadian cannabis sector gets the most interest from journalists and investors but we are also beginning to see similar trends in other parts of the world, particularly Columbia.
Investment and export
Within the Colombian Association of Cannabis Industrialists, Asocolcanna, 29 companies have already invested more than $600 million (about €540 million) to build infrastructure related to the cultivation of cannabis for medical purposes.
This situation also attracts foreign investors, such as Khiron, a Canadian company founded in 2017 and based in Bogota, which also has plantations in Chile and Uruguay. However, the Colombian bureaucracy remains a significant obstacle, as obtaining appropriate permits and licences can take months or even years.
From smuggling to the pharmaceutical industries
While exporting to the US is out of reach for Columbian companies, Canada or Great Britain are the destinations of choice. Above all, Colombia is a favourable breeding ground for cannabis cultivation, for both historical and geographical reasons.
Close to Ecuador, the country enjoys twelve hours of sunshine per day, which considerably reduces the burden of artificial lighting on other producing countries. The land is cheap, as is the labour force, and it is still abundant in skilled agricultural workers – drug cultivation is a must.
In the 1960s and 1970s, smuggled cannabis, mainly grown in the mountains of the Sierra Nevada, near the Caribbean coast, was exported in tons to the United States. The 1980s and 1990s had preferred cocaine, with Pablo Escobar changing his mind, but with the legalization of cannabis for therapeutic use, a new market, this time quite legal, has opened up, offering new opportunities to companies across the world.