Medicinal Cannabis looking good in investment and exports

According to Sidney Himmel, an expert and promoter of companies of this sector, in Canada companies involved in this industry are worth nearly $15 billion USD and Colombia has great potential.

The approval of medicinal cannabis in the country is one of the important news that happened last year in Colombia and surely this business will be key in this new year. One of the companies that got the green light to enter this business is Khiron Life Sciences Corp., which was formed in Colombia but with a good dose of Canadian capital.

Last month the chairman of their board, Sidney Himmel, who is also a chemical engineer and an expert who travels the world lecturing on the medical uses of the plant, visited Bogotá. The executive spoke with Portafolio.

Why is the trend of medicinal cannabis just starting now?

At the beginning of the XX century most of the drugs were plants or extracts of them, and already in 1920, molecules that were extracted from the plants. Then drugs become synthetic, that is to say that they do not occur naturally, and therefore, starting from 1959 they had side effects, which means that they were poison. While this evolution was happening in England and the United States, in other nations, like Germany, the idea of traditional drugs that came from plants and/or their extracts, such as ginseng, was still preserved. In the USA, starting in the 1930s, medical cannabis was banned for purely political reasons, against the advice of the medical community.

Since Vietnam the opposition was worse?

Exactly, but everything changed in the 80s, when they had the AIDS crisis in California. Everyone who suffered from that disease had pain and used cannabis to relieve it.

Then others began using it against nausea and vomiting caused by cancer treatments, and in the last ten years it has also been given another medicinal application for children with refractive epilepsy – the type resistant to other treatments – who can have up to a hundred attacks a day. Thus, many Governments allowed the use of cannabis as medicine for compassionate reasons.

Where did this come from?

The first countries that moved on legalization were the Netherlands, Canada and some states in the USA (where it is federally illegal). Now, Israel and Europe are beginning to legalize it for medical purposes. So, from a global perspective, what is happening now in Latin America in terms of regulation is that it is trying to catch up to the rest of the world and overcome the lag.

What are the applications of cannabis today?

Well managed, cannabis can help many people with illnesses that produce chronic pain, certain types of arthritic pain, many conditions of inflammatory infection, there is evidence that it helps children with autism,  its effects in Crohn's disease is being researched ... and I could go on.

And as a business, what prospects are there?

Instead of developing such strong and expensive drugs, as is sometimes done, here you have a medication produced locally in Colombia, which is less expensive and less toxic.

Right now in Canada there are 74 companies with licenses to produce cannabis medications and five years ago there were perhaps two. The market capitalization for these companies ranges from 10 to 15 billion dollars.

Could Colombia become a major cannabis exporter?

I think there will be two types of export: The first is going to be as a commodity; Canada and Europe are open to this. And the other is higher value-added products, which is what for example Khiron is doing with branded products.

We have to take into account that right now it is illegal in Colombia to export raw material.

Although during the initial phase Khiron is going to focus on local customers, the bet is to look to Latin America, not only Europe and Canada. Other companies are not taking this same approach.

The idea, more than to export raw materials, is to reach the patient directly.

How much investment can there be?

The investment that will be received will be very important for research and transformation processes. Just developing good manufacturing practices will cost about 15 million dollars, just to start any company, in the context of the demands of the foreign market.

Why do almost all cannabis companies in the country have Canadian capital?

Canada legalized medicinal cannabis early and had time to develop industry and research; so this is probably why between 60% and 70% of the investment comes from there.

What fears do investors have when going into this business?

The biggest hurdles are the lack of information about how the laws are going to evolve, if the regulatory environment is going to become more or less favorable.

The most important part of our work and one of the challenges is to educate investors in Canada and elsewhere, who do not know much about Colombia.

Canada has very good relations and an FTA with Colombia, but one challenge is for the country and patients to turn to this and work towards the promotion of this industry via public entities and the Government. But the stability in the rules of the game is also essential, because companies want to enter the market but if they are not given guarantees they do not arrive.