Regulation in the cannabis industry in Colombia is highly complex and results from the establishment of several legal instruments, including the Colombian Constitution, laws, decrees and resolutions issued by different state authorities. In this sense, companies must navigate through several regulatory frameworks, with different rules and procedures, in order to legally participate in the growing market.

While operating within the broad spectrum of cannabis regulation, businesses must also satisfy the legal and technical requirements established for each category of final products derived from cannabis (food, medicines, veterinary products, dietary supplements, cosmetics, among others).

Main Legal and Regulatory Framework for the Cannabis Industry

The central laws in this area are Law 13 of 1974 and Law 1787 of 2016, decreed by the Congress of the Republic.

Law 13 of 1974 approved the Single Convention on Narcotic Drugs of 30 March 1961, and its Amendments Protocol of 25 March 1972.

Within the framework of this Convention, Colombia undertook the obligation to adopt legislative and administrative measures to limit and control the production, manufacture, export, import, distribution and use of narcotic drugs for medical and scientific purposes. Furthermore, the national government covenanted to:

• forecast narcotic drug needs;
• annually report such needs to the International Narcotics Control Board (INCB); and
• adopt a licensing system to trade and distribute narcotic drugs.

In a general sense, the Convention intended that the state had particular control over the use of narcotic drugs, among which certain cannabis components were included.

On the other hand, Law 1787 of 2016 created the main legal framework that formed the true cannabis industry in Colombia, allowing and implementing secure access to medical and scientific uses of cannabis. Law 1787 also established a governmental control for cultivation, production, acquisition, import, export, marketing and additional activities involving to possession of the cannabis plant, its seeds and its by-products.

For such purposes, the Congress of the Republic delegated to different ministries the task of developing the necessary regulations on the matter. Accordingly, the Ministry of Health and Social Protection, the Ministry of Law and Justice and the Ministry of Agriculture and Rural Development were assigned to prepare and set out the first decree ruling the cannabis industry from 2017 until 2021.

Additional Regulation for the Cannabis Industry

Based on the central regulatory legislation for the cannabis industry in Colombia, the national government has issued the following decrees.

Decree 613 of 2017

As a first approach to comply with the provisions set forth in Laws 13 and 1787, Decree 613 of 2017 established a regime of licences to be obtained by companies within the cannabis industry according to their manufacturing and trading activities. While defining manufacturing obligations and prohibitions, Decree 613, generally speaking, created a set of complex rules and requirements to carry out commercial activities with cannabis and derived products. Nevertheless, since this was a new regulatory framework and it is a young industry in Colombia, the decree included several legal gaps, mainly related to delays when requesting the corresponding approvals, which ultimately led to a general sense of uncertainty in the field.

Decree 811 of 2021

After a four-year process of gathering lessons from the experience with Decree 613, the government issued Decree 811 of 2021, establishing the new main regulatory framework to be considered within the cannabis industry. This Decree sought to solve many of the gaps existing under Decree 613 by expanding the regulatory requirements to obtain cannabis licences in Colombia and acting as a compendium for companies wishing to participate in the market. In this sense, the government provided the main rules and dispositions for industrial and commercial activities using cannabis, its plant and derivatives.

Definitions

Decree 811 of 2021 introduced an important differentiation between the use of cannabis and its by-products. Accordingly, it was established that:

• sowing seeds, vegetable components, cannabis plants, grains, psychoactive and non-psychoactive cannabis, and psychoactive and non-psychoactive derivatives may only be used for medical and scientific purposes; and
• sowing seeds, vegetable components, grains and non-psychoactive derivatives of cannabis may be used for industrial, horticultural and food purposes.

Decree 811 of 2021 provided specific definitions for each cannabis component, helping to reduce confusion when interpreting legislation and regulatory scopes among different authorities.

Please note that, for controlling and licensing matters, the Decree established the technical difference between psychoactive and non-psychoactive cannabis is based on THC (tetrahydrocannabinol) content. Under local legislation, psychoactive cannabis refers to any component or product whose THC content is equal to or greater than 1% by dry weight; anything below that threshold is be considered non-psychoactive cannabis.

This differentiation resulted in the establishment of different set of rules for each product category and, thus, justified the complexity of the regulatory requirements depending on the manufacturing or industrial purpose.

Cannabis licences

To carry out activities with cannabis and its by-products, Decree 811 confirmed that it is necessary to obtain a licence. These licences vary depending on the activity to be carried out and the point in the manufacturing chain where companies will be operating. As such, these are the existing licences:

• licence for using cannabis seeds and grains;
• licence for cultivation of psychoactive cannabis plants;
• licence for cultivation of non-psychoactive cannabis plants;
• extraordinary licence for cultivation of cannabis plants;
• licence for manufacturing psychoactive cannabis derivatives;
• licence for manufacturing non-psychoactive cannabis derivatives;
• extraordinary licence for manufacturing cannabis derivatives.

The licences are valid for ten years and can be renewed as many times as needed, as long as the requirements supporting their granting are not transgressed.

Regarding the approval and granting processes, the regulation establishes that licences must be issued within 30 working days counted from the moment the applicant meets all the requirements set forth for each licence. Nonetheless, current practice results in authorities usually taking more than a year to evaluate and grant licence applications.

It is pertinent to point out that each licence has different modalities that must be selected at the moment of requesting the licence, as listed below.

• Licence for using cannabis seeds and grains:
1. commercialisation or delivery;
2. research;
3. grain processing or production.
• Licence for cultivation of psychoactive cannabis plants:
1. production of sowing seeds;
2. grain processing or production;
3. derivatives manufacturing;
4. research;
5. export.
• Licence for cultivation of non-psychoactive cannabis plants:
1. production of sowing seeds;
2. grain processing or production;
3. derivatives manufacturing;
4. research.
• Extraordinary licence for cultivation of cannabis plants:
1. granted to deplete cannabis stock when the original licence is about to expire (it is granted for a single time for a period of up to six months);
2. granted for non-commercial research (it is granted for a single time and for up to 12 months with the possibility of extending the validity for an additional 12 months).
• Licence for manufacturing psychoactive cannabis derivatives:
1. national use;
2. research;
3. export.
• Licence for manufacturing non-psychoactive cannabis derivatives:
1. granted in a single modality that includes the possibility of carrying out research activities, national use and/or export.
• Extraordinary licence for manufacturing cannabis derivatives:
1. granted to deplete cannabis stock when the original licence is about to expire (it is granted for a single time for a period of up to six months);
2. granted for non-commercial research (it is granted for a single time and for up to 12 months with the possibility of extending the validity for an additional 12 months).

Accordingly, each modality limits the allowed activities to be carried out by the company under each licence. For their approval, the authorities will require that the applicant demonstrates its capabilities to perform each of the requested modalities. As result, it is not advisable to request all the licences with all the modalities at the same time.

Requirements for obtaining a licence

As previously mentioned, cannabis regulation in Colombia is intricate, meaning that complying with the framework to obtain a manufacturing or commercial licence can be a daunting process.

For this reason, Decree 811 sought to give greater transparency and clarity on the main requirements by incorporating them into general requisites, which apply to any type of requested licence, and specific requisites, which vary depending on the type and modalities of each licence.

Among the general requirements, applicants must provide documentation describing the shareholding composition of the company, identifications of the legal representatives and statements on the origin of the company's resources, together with an anti-corruption declaration.

Cannabis licences, as set forth in the decree, are tightly linked to the property where the growing activities will be carried out. Therefore, it is also necessary to submit documents demonstrating ownership over the property or a lease agreement thereon. Furthermore, applicants must provide evidence of environmental certificates required for carrying out their industrial activities.

Concerning the specific requirements of each licence, companies must prove that they have the capabilities to develop their activities within the selected modality(ies) and framework of the requested licence. This is usually a challenging task since documentation will vary depending on the type of licence or approving authority. In terms of compliance, the application must include an organisational chart depicting each employee’s duties, photographic records of such activities, process flow diagrams of the company, technical descriptions of the involved equipment, and so forth.

Obligations and prohibitions on cannabis licence-holders

The regulation established in Decree 811 contemplates an important number of obligations and prohibitions that must be considered by cannabis licence-holders. Within these, we highlight the following.

• Companies must implement security protocols as established in Resolution 227 of 2022.
• Licensees must report every movement or action related to cannabis manufacturing/processing. To comply with this obligation the government implemented an internet platform, called Information Mechanism for Cannabis Control (Mecanismo de Información para el Control de Cannabis, MICC), where related information can be submitted.
• Companies must physically separate psychoactive cannabis plant crops from non-psychoactive cannabis plant crops and delimit their cultivation areas.
• Companies may not market, distribute or deliver cannabis to third parties who are not authorised or who do not have the corresponding licence.
• It is forbidden to carry out cultivation activities of psychoactive cannabis or manufacturing processes of psychoactive cannabis derivatives without having the permission (quota) for it, as described next.
• It is not allowed to carry out activities in buildings or spaces other than those authorised and specified within the granted licence.

Outsourcing licensing activities

Decree 811 also introduced more flexible rules for companies that seek to cover several activities but do not have all the resources or knowledge to do so. Hence, it is now possible to outsource all the activities allowed within the framework of a cannabis licence. This opens the possibility for a company to both cultivate cannabis directly and outsource cannabis research to another company without requiring another licence for the outsourced company. Several inquiries on this matter were raised in the past, and the resulting interpretation and resolution was even more confusing. Therefore, this change solves a longstanding problem in the field.

Quotas

As previously mentioned, activities with psychoactive cannabis under local legislation require the obtaining of a quota for THC uses, besides compliance with the other requisites. In general terms, a quota is the allowable amount of psychoactive cannabis, authorised by the local authorities, to be cultivated or manufactured into cannabis derivatives. There are two main types of quotas: (i) quotas for the cultivation of psychoactive cannabis; and (ii) quotas for the manufacture of cannabis derivatives.

Resolution 227 of 2022 provides more details on the specific requirements related to the obtaining and approval of cannabis quotas.

Magistral preparations based on cannabis products

Decree 811 also introduced the possibility to prepare cannabis products in a pharmacy, based on a medical prescription for a patient, as long as these activities are carried out in authorised establishments. Also, the decree established that the distribution and sale of magistral preparations/products in pharmacies and drugstores are allowed.

Foreign trade/import and export activities

Regarding the import and export of cannabis and all its by-products, companies are required to comply with all the cannabis licence requirements, plus the submission of a set of approvals from different authorities, which vary according to the by-product to be traded.

Before Decree 811, the export of the dry flower was restricted exclusively to research and scientific purposes. However, the new Decree modified this situation by allowing cannabis growers to export the dry flowers for both research and medical uses.

Due to the government control that exists over cannabis and its by-products in Colombia, any activity involving cannabis cannot be taken lightly. It is therefore advisable to approach the business with a clear understanding of the market, the regulatory framework, and the legal restrictions on the cannabis industry as established by Decree 811 of 2021.

Other Regulatory Provisions to Be Considered

Resolution 227 of 2022

This resolution, issued by the Ministries of Law and Justice, Agriculture and Rural Development, and Health and Social Protection, provides additional provisions related to cannabis licences, modifications, outsourcing activities, security protocols, research projects, advertising, quota systems, and finished products based on cannabis (food, beverages, dietary supplements, etc). The main topics of this legislation are listed below.

• The renewal of a licence must be submitted at least three months before its validity expires. If a company does not comply with this deadline, it will be necessary to submit a new licence application and all activities must stop until the application is approved.
• If the conditions that served as the basis for granting the licence are modified, it will be necessary to apply for a modification of the licence. Depending on the nature of the change, the licence will not be effective until authorisation is obtained for such modification.
• In the event that there are changes in the share composition of the shareholders with a stake greater than or equal to 20%, it is necessary to submit this information to the authorities as a novelty.
• If the licence-holder will outsource the activities of the licence, it will be necessary to notify the authorities about this situation. The licensee will be held responsible if the outsourcing company infringes any of the cannabis regulation provisions.
• The security protocol(s) in each licence must list the security pre-conditions of the property where the cannabis activities will be carried out. This protocol shall also include any plans to implement integrated security and transport systems guaranteeing control over the logistics and supply chain from the point of origin to the point of destination of the cannabis products.
• Concerning cannabis quotas, as pointed out earlier, these must be requested when the intended activities are related to cultivation of psychoactive cannabis or manufacture of cannabis derivatives. These permissions are issued by the Technical Quota Group, which is a body composed of several state entities.

If psychoactive cannabis cultivation will be carried out, the quota will determine the maximum number of plants to be grown, the minimum number of plants to be established on a cultivation site, and the maximum amount of psychoactive cannabis to be obtained.

If cannabis derivatives are manufactured, the quota will determine the maximum amount of cannabis or plant component authorised to be acquired, received and transformed, and the maximum amount of raw material to be extracted.

The quotas have a validity of two years. For their application, companies must comply with a set of requirements varying from the type of quota that will be requested (cultivation or derivatives manufacture) to the different modalities defined for each licence.

Companies must also provide a proper forecast or estimate of the required quota since, otherwise, they are exposed to reductions in future applications or even to a possible denial thereof. In such case, it will be impossible to carry out any related cultivation or manufacturing activity.

The production of food, beverages and dietary supplements is only allowed using the vegetable component, grains and non-psychoactive derivatives of cannabis as raw material. In no case can these products be made with a THC amount equal to or greater than the control threshold (1% by dry weight).

Companies wishing to manufacture this type of finished product with cannabis must take into account the applicable provisions for manufacturing any type of food, beverage and dietary supplement. In any case, it is pertinent to point out that the national government is expected to issue additional provisions concerning the production of food and beverages based on cannabis.

Resolution 539 of 2022

This Resolution, also issued by the Ministries of Law and Justice, Agriculture and Rural Development, and Health and Social Protection, regulates the foreign trade operations of cannabis and its derivatives in Colombia.

In general, those interested in importing or exporting cannabis must submit a request before the Single Foreign Trade Window (Ventanilla Única de Comercio Exterior, VUCE), through which: (i) authorities will verify compliance with the requirements established according to the export or import modality; and (ii) the competent entities will endorse the foreign trade process by means of an approval.

Based on the specific product that will be imported or exported, different approvals and requirements must be met. Therefore, it is advisable – before starting commercial operations with cannabis – to project any foreign trade activities so that the fulfilment of the import/export requirements is estimated beforehand.

Lastly, and as previously stated, Decree 811 of 2021 opened the possibility for companies to export cannabis and its by-products (including dry flowers) for research and medical purposes. However, these provisions would come into force once the national government issued special rules on the matter. Resolution 539 of 2022 sets out the specific requirement allowing such trades and, thus, provides a new scope on regulatory matters for the cannabis industry.

Resolution 578 of 2017

This resolution establishes the fees for some of the licence applications that are processed before the Ministry of Justice and Law. While its provision are not yet currently applicable, it is expected that this Resolution will be updated in the upcoming months.

Resolution 2022001026 of 2022

This resolution implements the fees for all the procedures carried out by the National Institute for Drug and Food Surveillance (INVIMA), including procedures related to the manufacture of cannabis derivatives.

Resolution 3168 of 2015

This resolution regulates the activities related to the production, import, and export of cannabis seeds, as well as the registration of agronomic evaluation units and/or research units in plant breeding. The framed legislation is essential for all companies wishing to cultivate cannabis since it contains the requirements for the production and cultivation of seeds in Colombia.

Resolution 67516 of 2020

Finally, this Resolution establishes the requirements for the registration of cultivars within the National Register of Commercial Cultivars. This registration is necessary for cases when the company intends to apply for certain types of licences related to seed sowing in Colombia.

The Colombian Regulatory Authorities charged with enforcing the laws and regulations governing the cannabis industry are distributed per their legal duties.

Ministry of Justice and Law

Through its Control of Chemical Substances and Narcotic Drugs Branch, the Ministry is responsible for reviewing and issuing:

• licences for using cannabis seeds and grain;
• licences for cultivation of psychoactive cannabis plants;
• licences for cultivation of non-psychoactive cannabis plants; and
• evaluations and quotas for cultivation of psychoactive cannabis plants.

This entity is also in charge of constantly monitoring the fulfilment of the obligations of the licensees and, in the event of finding irregularities, it may initiate administrative proceedings that can result in the licence revocation.

Ministry of Health and Social Protection

This Ministry oversees the granting of quotas for the manufacture of cannabis derivatives. Likewise, as the entity responsible for formulating all health-related policies, plans and programmes in Colombia, it is in charge of providing the regulation for the use of cannabis in food, beverages and dietary supplements for humans.

The Colombian Agricultural Institute (Instituto Colombiano Agropecuario, ICA)

The ICA is the entity responsible for ensuring the quality of agricultural inputs, seeds and the protection of plant health in Colombia. This office issues multiple permits that are needed to cultivate any vegetable product, including those containing or deriving from cannabis. The main permits issued by ICA are the following:

• registry as a seed producer;
• registry as seed importer or exporter;
• registry as a unit of agronomic evaluation;
• registry as a research unit in plant breeding; and
• registry of cultivars in the national register of commercial cultivars.

In addition, the ICA is responsible for granting the authorisation for finished products for veterinary use, including those comprised of cannabis.

National Institute for Drug and Food Surveillance (Instituto Nacional de Vigilancia de Medicamentos y Alimentos, INVIMA)

Since 2019, INVIMA has been designated as the authority in charge of issuing the licences for manufacturing cannabis derivatives that were previously the responsibility of the Ministry of Health and Social Protection. As the principal Colombian health and marketing authorisation authority, it is also in charge of regulatory compliance for medicines, medical devices, food, beverages, dietary supplements and phytosanitary products, among others.

National Narcotics Fund

Its main objective is the surveillance and control over the import, export, distribution and sale of medicines or materials of special control, including products containing cannabis. Due to its competency, it is responsible for an important component of the authorisations required for the import and export of cannabis and its by-products (including dry flowers).

Technical Quota Group

This is an intersectoral commission, consisting of several ministries and state entities, in charge of evaluating and assigning (ie, granting or denying) quota applications. The entities that comprise the Technical Quota Group are:

• the Ministry of Health and Social Protection;
• the Ministry of Justice and Law;
• the Ministry of Agriculture and Rural Development;
• the National Narcotics Fund;
• INVIMA;
• ICA.

In Colombia, there are no self-regulatory authorities that apply in a generalised way to the entire cannabis industry. Notwithstanding, there have been many initiatives by various organisations to contribute to the growth of the cannabis market in the country.

The most well-known association at the moment is the Colombian Association of Cannabis Industries (Asocolcanna), which was established in 2017 to promote the development of the cannabis industry within the Colombian legal framework.

As it is a private organisation, its guidelines and codes apply exclusively to its members and are not extended to the rest of the cannabis industry. Asocolcanna adopted a conduct code for all of its affiliates through which it seeks to regulate the interrelation between the different agents of the cannabis industry by establishing a series of guidelines and prohibitions.

An external committee is in charge of evaluating the potential complaints and, after due process, imposing the corresponding sanctions in the event of finding any violations. Among these, there are fines ranging from USD2,500 to USD37,500, written warnings and expulsions from the association.

Considering that the cannabis industry in Colombia has been developing for more than five years, many of the initial challenges of any starting industry have been already overcome. Nevertheless, there are still important issues that must be considered within the cannabis market.

One of the most important issues is the access to the Colombian financial system. Due to the historical link between cannabis and drug trafficking, as well as the prohibition of cannabis in the USA at the federal level, many Colombian banks have refused to provide financial services to companies involved with cannabis cultivation and processing. Although the national government has taken measures through state financial institutions, such as the Banco Agrario, to overcome these barriers, the reality is that there is still a long way to go for companies to have unrestricted access to financial support.

Another important challenge within the industry is the existing limitation in the domestic market due to the lack of by-products where cannabis can be used. Many companies have adapted to high regulatory standards without finding many outlets for their raw material, partly due to the limitations on exports of dry flowers (existing before 2022) and the lack of regulation on production of food, beverages and other products containing cannabis. On this point, the national government has sought to give different alternatives to the industry by expanding the possibilities for the export of dry flowers (eg, for medical purposes), as well as allowing the usage of certain cannabis derivatives for industrial purposes in the food sector.

Finally, it is important to mention that there are still external agents that do not adhere to regulation of marketed products by claiming miraculous and unverified properties associated with cannabis usage. Unfortunately, these actors are contributing to a widespread distrust about cannabis and misleading the customers as to the true uses it can have.

The Colombian government and local cannabis industry have invested considerable efforts to implement the above-described regulatory regime since 2017. Their goal has been to provide confidence to investors and international agents on the origin and administration of cannabis in the country. With constant modifications to the regulation, the competent authorities have clearly differentiated the cannabis components and the activities that can be done with these components in order to provide different options and solutions to the companies’ needs.

In this sense, the Colombian regulatory regime is quite sophisticated and provides solid tools, such as Decree 811 of 2021, for expanding and legally securing the growing market. We observe that the government has been truly interested in helping cannabis companies with their needs and is constantly seeking to improve current legislations to cope with the industry's challenges. As of this date, for example, the Ministry of Health and Social Protection is working on issuing special provisions to regulate the production of food, beverages and dietary supplements with cannabis for human use.

As previously mentioned, the regulation of cannabis in Colombia is highly complex and involves constant interaction with different authorities, each of which contemplates several requirements. Accordingly, companies must consider all the obligations and prohibitions they have to comply with to avoid legal risks.

In this context, the most common scenario is that companies cannot perform activities outside the scope of their granted licence or attempt commercial endeavours with individuals lacking the respective cultivation or manufacturing licence.

It is also important to correctly forecast the scope of the quotas scopes required for cultivation of psychoactive cannabis or manufacture of cannabis derivatives. If the company does not use a specific percentage of the quota requested and granted during a term, authorities can – and will – reduce the future quota allocation or, in a worst-case scenario, deny altogether the requested quotas.

Finally, under local legislation, companies are held responsible not only for their activities but also for the actions carried out with third parties. Therefore, it is recommended to implement controls when reaching agreements with other companies to guarantee that the involved parties have the necessary licences and permits to legally cultivate or manufacture cannabis and its by-products.

As previously explained, compliance of cannabis regulation is overseen by several authorities. However, the specific entities that govern and control cannabis licences are the Ministry of Justice and the INVIMA.

Among the penalties that these entities can impose for non-compliance with the regulation are:

• suspension of the licence for a period of one to six months, including suspension of the activities covered under the licence; and
• total cancellation of the licence and, consequently, revocation of the possibility to carry out industrial and commercial activities with cannabis.

Cross-jurisdictional issues are mainly related to the export of cannabis, which is restricted to scientific and/or medical purposes. For this matter, it is necessary to consider the legal definition of cannabis, based for example in the provisions of Decree 811 of 2021, which corresponds to the flowering or fruiting components of the cannabis plant, with the exception of the seeds and leaves not attached to the parts from which the resin has not been extracted.

On the other hand, sowing seeds, vegetable components, grains, and non-psychoactive derivatives of cannabis can be exported for industrial, horticultural and food purposes. In any case, companies that seek to export their products must also review the regulations and restrictions of the destination country.

In order to use cannabis as a medicine or to prepare pharmaceutical products, it is necessary to demonstrate the safety, efficacy and quality of these products. To accomplish this, companies must have sufficient scientific evidence to demonstrate that cannabis, as an active ingredient, has a favourable risk-benefit balance for the desired indication. Likewise, its manufacturing process must be carried out in plants that have certified good manufacturing practices.

In that sense, one of the main obstacles affecting the cannabis industry in terms of accessing the medical market is the elevated cost associated with drug effectiveness and safety research, this last factor being affected by the lack of sufficient scientific evidence supporting certain therapeutic properties of cannabis.

Additional challenging barriers include the lack of knowledge of health professionals on the potential benefits of cannabis for patients and, thus, the corresponding absence of prescription of pharmaceuticals with cannabis through magistral preparations/products.

Regarding the usage of non-controlled cannabinoids in food products, Decree 811 of 2021 expressly established that it would be possible to use grains, plant components and non-psychoactive derivatives of cannabis as raw materials for the manufacture of food for human and veterinary consumption.

That being said, and in terms of food for human consumption, we are waiting for the Ministry of Health and Social Protection to enact the specific regulation in the matter, allowing the registration of food and beverages that include cannabis as a raw material.

In the case of veterinary nourishment, there is an official ICA ruling, pointing out that the necessary rules for the registration of cannabis-based food products already exists and is currently applicable.

There have been several projects that seek to modify the Political Constitution of Colombia to allow the recreational use of cannabis. These initiatives are in constant evolution, always emphasising the associated economic benefit (eg, increase of industry profit and expansion of the market) and promoting the debate around the social effects related to its legalisation.

However, none of the initiatives have been successful. Considering the current political environment in Colombia, we see it as unlikely that a legal project of this nature will prosper in the near future.