COVID-19: Challenges and opportunities for the cannabis sector

COVID-19 Challenges and Opportunities for the Cannabis Sector in Colombia

The Shock

The cannabis stock crash of 2019 combined with the current public health situation has brought the global cannabis sector to an unprecedented situation: access to fresh capital is scarce. Companies in need of capital will need to adapt to this new reality by re-shaping its value proposition and convincing investors of their unique competitive advantage in the international medical and recreational markets.

The Opportunity

Although Colombia is not immune to the new reality, it seems to have weathered the storm better than others. Farms have operated without interruption and investor interest remains strong. The historic devaluation of the Colombian peso has made local investments increasingly attractive in one of the most promising cannabis jurisdictions in the world.

New Players

New trade associations, like the Association of Breeders and Exporters of Certified Cannabis Seeds (ABESCO) are helping regulators size the opportunity of specific segments of the value chain. Indeed, local regulation puts Colombia in a unique position to be the world’s main producer of certified cannabis cultivars, and the transition between fully integrated vertical business models to one where leaders emerge in different segments of the value chain is a sign of maturity. We expect 2021 to be a defining year in that regard.

So what’s next?
After grabbing many headlines over the past 2 years, Ecuador is finally ready to go. June 21st is the industry’s grand opening, and already we can tell the country is off to a great start. Government support is strong, domestic appetite is voracious and the endogenous factors look great on paper. Will Ecuador learn from its neighbors’ mistakes in the early steps of implementation and set the ground for a smooth launch? We are ready to file license applications for our first clients right after the opening bell and hope to break ground on the country’s first greenhouse before the year ends. Stay tuned for regular updates on this exciting milestone for Latin American cannabis.

Full Disclosure: 613 Partners is a founding member of ABESCO.