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WE’LL END UP RELYING ON ANY COUNTRY THAT
CAN PRODUCE HEMP FOR ALMOST ZERO COST
Colombia had the potential to dominate marijuana exports,
generating billions in revenue.
Paraguay’s Law 6007 – passed in 2017 and instigated in 2018 –
expanded marijuana imports and cultivation, placing national
production under the government’s oversight with a central
focus on scientific research.
Though they are not necessarily CBD-specific advances, they
are crucial. The success of CBD products in the region has
often sprung from the seeds of medical marijuana legalisation
and increased hemp production, with governments eager to
optimise their agricultural centres.
Industry leaders in the world’s strongest economies have
already noticed. For example, according to a report by the
Latin American Post, there are 21 companies with licences to
grow medical marijuana in Colombia alone, backed by capital
flowing from Mexico, Israel, the US and Canada.
And the region isn’t just primed for exports, but imports.
Brazil’s 200 million strong population and comfortable position
as an agricultural powerhouse has inspired predictions that it
will lead the world on both fronts.
Brazil’s Agência Nacional de Vigilância Sanitária (or the
National Sanitary Surveillance Agency) decriminalised CBD
and even removed its import tax as far back as November
2015. A substantial development came in October 2018, when
HempMeds Brasil released a 5000 mg CBD hemp oil for
general consumption.
Mike Hodgson, owner of Green Leaf Productions and its
cannabidiol-focused offshoot company Three Fourteen CBD,
has created a business model of extracting premium hemp for
a versatile range of CBD products.
As a close observer of the Canadian, European, US and Latin
American markets, Mike has kept an eye on who can grow
premium hemp and marijuana plants, and who’s buying them.
He predicts the next great stage in the story of CBD will lie in
how nations compete and sees South and Central America as
having crucial advantages.
It’s a grower’s game, and there’s no substitute for holding the
most product.
“As an extractor, what we’re looking for is biomass – the plant
material we can put through our extraction machine. As the
plant commoditises, you’ll get a lot of players involved in
growing. Right now, an average pound of industrial hemp at 18
percent CBD sits somewhere around the 200 dollars-a-pound
mark. Colombia has come to the table pricing it at around five
dollars, and you’ll see Mexico as another place that’s coming
up as a major player. In order for countries like the UK, US and
Canada to compete worldwide and have GMP certification for
exports, we have to find biomass that is of good value.
“We’ll initially look to our domestic farmers to grow it, but
eventually we’ll end up relying on Mexico, Colombia or even
somewhere like South Africa; any country that can produce hemp
for almost zero cost. Unfortunately, these means farmers getting
paid very little in this economic model. These countries also
have the perfect climate for such growth. They’re not spending
millions or even billions of dollars building indoor farming
facilities. Greenhouses are extremely energy inefficient; indoor
and warehouse growth may not survive when the industry
commoditises.
“Some predicted this commoditisation would happen in five
years, I can see it happening in about two. Colombia has
already come online with massive acreage. And the other
South American countries – especially Nicaragua, will follow
suit. Vaping and CBD are still the best places to be right now if
you’re in a business with vertical integration and a tangible end
product. For example, if you were able to get a really low-cost
biomass and turn that into a vape pen product, those prices
won’t compress for a while. They’ll stay aloft. It’s going to take
time for the industry to catch up with that demand.”
VAPOUROUND CBD MAGAZINE
75