Colombia Leans Further Into Cannabis

Country seeks to shed its cocaine image for cannabis.

The country of Colombia may have a reputation as the home for cocaine cartels, but it is leaning further into cannabis these days. According to government claims, the country has received $250 million in international funding in support of the cannabis sector. Companies began eyeing the country after it legalized medical cannabis in 2016.

Insurance Coverage

In October 2022, Colombian lawmakers approved a bill to legalize and regulate marijuana nationwide. It was approved by the Colombian Senate last month. In addition to that, Resolution 2808 of 2022 was signed by the Ministry of Health on December 30, 2022. According to a statement by Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQX: KHRNF), this revision was necessary to remove unintended ambiguities that had arisen whether plant-based magistral preparations from medical cannabis (i.e., Khiron products) were also included in the insurance coverage. “This is now once and for all clearly confirmed. The new government is fully committed with the use of medical cannabis as a covered treatment under the Colombian health system.”

Khiron also stated, “During the first half of 2022, insurance-covered prescriptions represented more than 90% of the Company´s cannabis sales in Colombia. With a patient base of more than 25,000 patients, Khiron will immediately resume filling insurance-covered prescriptions through its Zerenia clinic network.”

Alvaro Torres, CEO of Khiron, said, “We welcome the decision from the new Colombian government to categorically mandate insurance coverage for our medical cannabis products. With this decision, Khiron will immediately tackle the backlog of covered medical cannabis products for our patients. In parallel, we have also secured a first-of-its-kind contractual relationship with one of Colombia´s largest government-owned insurance companies for medical cannabis-specific healthcare services and dispensation. These two achievements will allow us to revert to predictable recurring revenues, shorter collection periods, and improved cash flow.”

Exports

Following the April 2022 passage of Resolution 539 permitting licensed cannabis cultivators with export quotas to export dry cannabis flower, Flora Growth Corp. (NASDAQ: FLGC) said it successfully exported nearly 1,000kgs of dried cannabis and derivatives to Europe and the United States in the fourth quarter of 2022.

These activities are a part of the full commercialization of the Cosechemos farm and Flora Lab One facility in Bucaramanga, Colombia. Flora also added that it updated its previously announced 43,000kg export quota to include multiple strains of THC flower, including four additional high-THC genetics, and increased limit to the production of psychoactive derivatives for domestic use in the Colombian medical market.

“As the largest cultivator of commercial cannabis in Colombia, our ability to activate our farm and distribute products is nearly unmatched,” said Luis Merchan, Chairman and CEO of Flora Growth. “With the acquisition of Franchise Global Health completed just last week, we now have direct lines of distribution to Germany and the rest of Europe.”

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


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