Colombia's Cannabis Conundrum: Why Importing Canadian Flower Makes No Sense

Colombia, a country known for its coffee and cocaine, is now considering a new export: cannabis. However, the recent draft resolution by the Colombian Agricultural Institute (ICA) regarding phytosanitary requirements for importing dried cannabis flower from Canada has raised alarms in the industry. Experts argue that this move makes neither economic nor political sense, as Colombia already has the capacity to produce top-quality cannabis flower at much more competitive costs than Canada.



The root of this issue lies in Canada's oversupply problem. After the legalization boom, companies grew rapidly, generating an oversupply that they are now looking to offload in emerging markets like Colombia. According to a report by MJBizDaily, since 2018, Canada has destroyed nearly 1,700 tons of cannabis due to a lack of demand. Overproduction has been a persistent problem, with regulations limiting the commercial distribution of large volumes of dried flower. Additionally, the Canadian market is facing a significant inventory surplus, with approximately 36 million units of dried flower remaining unsold by mid-2024.

In a market already oversaturated, with cannabis piling up in warehouses, the possibility of Colombia accepting imported flower seems, at the very least, strange. Allowing cannabis imports from Canada would be a major setback for local businesses, as Colombia already produces high-quality cannabis but faces barriers to exporting it. Internal regulations still prevent the sale of dried flower in the medicinal market, further limiting the potential for local producers to grow and compete.



For local businesses, allowing cannabis imports would be a political mistake and an insult to local entrepreneurs who have struggled for years with an overly regulated export model and an extremely limited domestic market. Attorney Efraín López, director of Árpez Company and former Ministry of Justice official, warns about the lack of trade reciprocity with Canada: "Canada does not allow the import of cannabis for medical or industrial purposes from Colombia, so why would we allow it to enter our market?"

López also emphasizes that allowing cannabis imports from Canada would have a devastating economic impact on the national industry. Colombian producers have invested in international certifications to export dried flower to demanding markets like Germany, Australia, and Israel, where wholesale prices range from $13 to $27 per gram. However, Canadian cannabis, priced significantly lower due to oversupply, could displace local producers.

The issue is also economic. According to Statista, in August 2021, the average price of one gram of medical cannabis in Canadian dispensaries was CA$12.34 (approximately $9.87 USD). In contrast, in international markets like Australia and Brazil, prices are much higher, reaching up to $27 per gram. The concern goes further, as in 2024, Israel launched an investigation into dumping by Canadian companies, accusing them of selling cannabis at artificially low prices to monopolize the market. This practice could negatively impact Colombian producers, increasing the commercial risk of importing cannabis from Canada to Colombia.

In conclusion, Colombia's consideration of cannabis imports from Canada makes no sense from an economic or political perspective. Local producers have the capacity to produce top-quality cannabis flower at much more competitive costs than Canada. Allowing cannabis imports from Canada would have a devastating economic impact on the national industry, as Canadian cannabis, priced significantly lower due to oversupply, could displace local producers. The Colombian government should focus on creating better conditions for local producers to sell what they already produce, rather than importing cannabis from Canada.