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Cannabis in Ecuador: Industry and opportunity

Published on July 20, 2021

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The first steps towards an emerging market

The cannabis industry is not simple, but it has promise. It is crossed by social, therapeutic and public health, scientific, productive, legal issues and even a certain morality, a product of ignorance and the stigma that the plant has, due to one of its thousands of uses: the recreational use of marijuana. But cannabis is much more than that.

In Asian countries, the medicinal and productive benefits of cannabis have been used for millennia. On this side of the world, the first steps were taken by Uruguay and Canada. In 2014, the United States legalized the cultivation of a non-psychoactive cannabis variety called hemp. Four years later its production and consumption was authorized at the federal level. Thus, an industry was born.

In the next few years, several Latin American countries joined. According to estimates by the consultancy Euromonitor International, in 2018, the hemp industry generated $12 billion worldwide. If the calculations are correct, the industry will grow by 1,383% in the next few years.

Ecuador has also seen an opportunity in this emerging market, but it needs a coherent legal and regulatory framework. The reforms to the Comprehensive Organic Criminal Code (COIP), which entered into force on June 21, 2020, allow the production of non-psychoactive cannabis for medicinal and industrial purposes. The cultivation regulations were issued by the Ministry of Agriculture and Livestock (MAG) in October.

Associations, entrepreneurs, activists and experts look at this industry with interest, in which there is an informal market that has been operating for more than 10 years.

But first … let’s talk about the plant itself….

A controversial and generous plant

Omar Vacas is a conservation biologist and researcher, who has dedicated himself to the study of medicinal plants in Ecuador, including cannabis. To explain its complexity, Vacas compares it to a coin. On one side are its many medicinal properties, on the other, its narcotic or psychoactive effects.

In the world there are about 300,000 varieties of plants and in Ecuador, if only medicinal plants are considered, about 3,000. “The properties of cannabis improve with the combination of other plants (and in Ecuador we have many) and it helps to treat more diseases,” explains Vacas. In addition, there are its thousands of uses in the cosmetic, food, fiber, bioplastic and biofuel industries, in construction, among others.

THC, the main compound in cannabis

Like other members of the plant kingdom, cannabis has several active compounds. Vacas says about 700, among them, about 100 cannabinoids: the best known are THC, CBD, CBG and THCV.

The main, and most controversial, component of cannabis is THC (delta-9-tetrahydrocannabinol), a substance that, when going through a decarboxylation process (high temperatures), changes from the acid or neutral state in which it is found in the plant, has therapeutic applications and, depending on the context and the concentration with which it is used (recreational or recreational consumption), it acts on the nervous system, altering perception and mood.

There are varieties of cannabis that can reach percentages greater than 20% THC, these are what are generally known as marijuana — in some countries both the plant and the mixture of leaves and flowers of cannabis produce a narcotic effect.

With the reforms to the COIP, cannabis for medicinal and industrial purposes was decriminalized in Ecuador, but only varieties that have less than 1% THC, that is, those that do not produce a psychoactive effect. These varieties are also known as hemp. Although – it must be said – internationally there are ambiguities regarding the names of the plant, which contributes to confusion. The president of the Ecuadorian Association of Cannabis Industries, Asecanna, and partner of the firm CorralRosales, Felipe Samaniego Vélez, agrees with this, and adds:

“Americans (for example) regulate hemp (or hemp), with a percentage of 0.3% THC, and all that is above is cannabis and the psychoactive is known as marijuana.” That may vary in different countries and regions.

It all started in central Asia

Although it is difficult to know for sure the exact place where cannabis originated, there is consensus that it was in central Asia, near the Altai massif, in the region where Siberia, Mongolia and Kazakhstan converge. It was already cultivated in ancient Mesopotamia 4,000 years before Christ, according to historical records. Along with opium, it was the first medicinal plant discovered by humans.

The first records of the use of its fiber correspond to China, Afghanistan and India.

Whether for its medicinal properties, its fiber or its narcotic effects, cannabis was used until the 19th century and part of the 20th, when it was classified as a narcotic and was restricted only for medical and scientific purposes. Its other uses were deemed illegal, and the stigma began.

Educational processes to eliminate stigma

“The recreational use of marijuana is frowned upon in Ecuador and everywhere,” acknowledges Andrés Rodríguez, a communicator and social researcher who has studied collective action, cyberactivisms and, as part of his doctoral research at the Latin American Faculty of Social Sciences, pro-cannabis organizations in the country. The stigmatization is not only for recreational uses, but for the whole plant, even for its therapeutic applications and derivatives. “There are records of arrests for carrying CBD oils or derivatives (the second main compound in cannabis which is not even in the regulation),” says Rodríguez.

For this reason, the researcher speaks of three necessary processes regarding cannabis: legalization, depenalization and decriminalization. With the reforms to the COIP and its correct application, non-psychoactive cannabis, for medical and industrial uses, would comply with the first two. Decriminalizing, says Rodríguez, is a broader concept, which not only implies the legal sphere, but also educational processes that contribute to eliminating the stigma that various sectors of society have regarding the plant.

In Ecuador, according to Rodríguez, there are more than 40 pro-cannabis organizations, each with its own structure and proposals. Among their main demands are the decriminalization of all varieties of the plant, regardless of the percentage of THC, reducing illegitimate arrests – the law stipulates a permitted possession of less than 10 grams and that it is not intended for trafficking – and being able to obtain legal status, that is, to be recognized as organizations with rights and obligations, for profit or not, to be part of the non-psychoactive cannabis industry. However, Rodríguez says, the government has a position to “not listen” to these organizations.

In the country, however, there is already an informal industry that mainly produces therapeutic and cosmetic derivatives with cannabis, which are easily found on the internet and social networks.

What will happen to the informal sector? Is it possible to regularize it? Will it be part of the industry recognized by the government or will a ‘witch hunt’ begin?

These are questions asked by Omar Vacas and Andrés Rodríguez. For the president of the Ecuadorian Association of Cannabis Industries and expert in regulatory issues, Felipe Samaniego, this is one of the challenges facing the government, as it highlights the need to regularize their products and, if applicable, their crops, so that everyone involved in this industry can compete under the same conditions.

1 Comment

  1. Use a model similar to the ones in OR, CO, CAL. They seem to be working fine after years of practice. Please. Thank you.

    Great opportunities in agriculture. And $$$.

    Reply

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