Pharmaceutical, Foreign investment, Foreign trade

The New Draft of Regulatory Decree for Medicinal Cannabis - Part 2: Proposed Regulations on International Trade

28/06/2019

The Colombian Ministry of Health has proposed a draft of Regulatory Decree on the Safe and Informed Access to the Use of Cannabis currently regulated by Decree 613 of 2017. The Draft, when it is issued and enters into force, will have some important and substantial modifications on the issuance of licenses and its regulation.

The first article of our weekly series explained and analyzed the changes in the general requirements for application to every cannabis license issued in Colombia. In our second delivery we will analyze the differences between the current regulations and the Draft Decree regarding international trade operations (import and export) of cannabis.

It is important to mention that one of the first articles in the Draft contains the definitions applicable to the whole instrument. One of the new definitions that has influence in the proposed regulations on international trade is vegetative component, defined as: “Any part of the cannabis plant, except cannabis itself (referring to the flower), including the fibers obtained from the plant”. This new definition includes hemp  into it, contrary to the current regulation where cannabis derived fibers are not regulated.

Now, regarding the subject matter of the present article and clarifying one of the new definitions, the Draft provides the following regulatory changes on international trade of cannabis.

The utmost change stipulated in the Draft concerns to the exportation regime, as the current regulation authorizes only the export of cannabis plants and cannabis (flower) only for scientific research purposes.

Nonetheless,, the Draft provides that the exportation of vegetative component and non-transformed cannabis is not only permitted for scientific research purposes, but also authorizes the export of vegetative component and/or non-transformed cannabis to Free-Trade Zones, with the purpose of fabricating cannabis derivates, counting with the previous authorization of the National Narcotics Authority (Fondo Nacional de Estupefacientes, in Spanish) and the corresponding license of fabrication of cannabis derivates. Bear in mind that the export of non-transformed cannabis and/or vegetative component is only authorized under these specific modalities. The export to other countries of non-transformed cannabis flower and/or the vegetative component is not permitted, unless it falls within the aforementioned scenarios.

Following with the regulation on exportation proposed by the Draft, it maintains the requirement of the certificate of exportation of specially controlled raw materials and/or medication that the holder of the fabrication license must obtain, according to Resolution 1478 (Controlled Substances) of the Ministry of Health. Nonetheless, the Draft adds a new regulation providing that, for the case of non-psychoactive cannabis and its derivates, the due authorizations must be issued, according to international agreements.

Concerning the importation regulations, up to this point, one of the few changes the Draft proposes is the addition of vegetative component (hemp) for import. As it is established in the current regulation, the Draft establishes that the seeds for sowing, vegetative component, cannabis, its derivates, or products that contain cannabis, must comply with the import regime of previous import licensing regulated on Decree 925 of 2015. The import must be formalized through the Single Window (One-Stop Centre) for International Trade (VUCE, in Spanish).

Other noticeable change regarding the import regulation is that the Draft provides as a requirement for the import of vegetative component and cannabis (flower), the approval of phytosanitary requirements established by the Colombian Agricultural Institute (ICA, in Spanish). This aspect is not present in the current regulation of medicinal cannabis, and the requirements are not explicitly contained in the Draft, it will have to be developed further by a Resolution that regulates these phytosanitary requirements.

Additionally, the Draft provides a new article regarding the finalization of the import/export process, that the current regulation does not contain. The proposed new regulation stipulates that the authorized importers and exporters must forward to the Ministry of Justice and National Narcotics Authority within the next eight (8) days of the culmination of the nationalization process, the declarations of importation and exportation, containing the dates, amounts of seeds, vegetative component, cannabis and/or derivates that effectively entered or left the country, and the products involved in the importation/exportation.

Analyzing the changes proposed by the Draft, it can be noticed that there is not a huge variation on the import regime, other than the addition of the vegetative component and the requirement of compliance with phytosanitary requirements established by ICA, the regime remains the same way.

However, concerning non-psychoactive cannabis exportation, the proposed regulation is vague and insufficient, because it does not define the corresponding authorizations the exporters must issue, nor it refers to any international agreement applicable to this matters; as it was mentioned above. In our opinion, the Draft, while trying to regulate the exportation of non-psychoactive cannabis, created an unintelligible grey zone for the licensed cannabis exporters.

For us, the most influential change in the regulatory framework proposed in the Draft, is the new regulation of exportation of cannabis, authorizing the entry of non-transformed cannabis or vegetative component to Free-Trade zones, for the purpose of fabricating derivates. This proposed regulation will encourage fabrication licensees and applicants to establish themselves in a Free-Trade Zone, creating incentives to invest in Colombia, and consequently, helping the growth of not only the Colombian cannabis industry, but the whole economy.

 

Note:

The Draft Decree on the Safe and Informed Access to the Use of Cannabis is available in Spanish in the following link:

https://www.minsalud.gov.co/Normatividad_Nuevo/Proyecto%20decreto%20Acceso%20seguro%20e%20informado%20al%20uso%20del%20cannabis.pdf

The current Regulation on Medicinal Cannabis, Decree 613 of 2017 is available in Spanish in the following link:

https://www.minsalud.gov.co/Normatividad_Nuevo/Decreto%20613%20de%202017.pdf

The first article of the series, concerning the changes of the general requirements for license application is available in the following link:

            http://www.abusaidgomez.com/publications/article/draft-decree-cannabis-part1

 

 

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