Ecuador begins producing medicinal cannabis

Ecuador isn’t the first country that springs to mind when thinking about cannabis reform, be it regional or international. However, the country is clearly moving into the global medicinal cannabis market in an organized manner.

This week, on Tuesday, AYA Natural and Medical Products of Ecuador became the country’s first manufacturing facility to begin regulated GMP production.

The inauguration was auspicious, attended by company officials as well as the Ministries of Production, Foreign Trade, Investment and Fisheries, the National Institute of National and Solidarity Economy and the Deputy Minister of Production and Industry. Regardless of who else may notice, this is clearly a coordinated effort and a high-level government decision to support a domestic medicinal cannabis industry and promote an industry with global ambitions.

No wonder, given that their neighbors, including both Colombia and Peru, are already involved in the regional, if not international, supply chain business.

The status of cannabis reform in Ecuador

This small country on the left coast of South America, bordered by Colombia to the north, Peru to the south, Brazil to the east, and the Pacific Ocean to the west, has been quietly pushing cannabis reform in an interesting way. Under the country’s 2008 constitution, the use of “drugs,” including cannabis, is not a crime but a public health issue. Therefore, cannabis is legal here for personal consumption with a limit of 10 grams. However, the sale of cannabis is still prohibited unless it is for medicinal purposes.

In 2016, lawmakers first proposed formalizing and legalizing the industry nationally. The Ecuadorian National Assembly then legalized its medicinal use in late 2018 by a majority of 83 to 23. However, it took until the end of 2019 when the Organic Law on Reform of the Comprehensive Organ Penal Code was published, and in June 2020, the Reform of the Organic Law on Comprehensive Prevention of the Socio-Economic Phenomenon of Drugs and Regulation and Control of the Use of Listed Drugs Substances Subject to Control Acts was passed, with which the industry finally had a legal foothold.

At this point, initial local attention was more on building a hemp industry than building a high-THC industry, but as in other places, reform has come and has yet again been postponed. Obviously, COVID has also played a role in delaying developments, but that time appears to be nearing a crucial end.

As with many of its Central and South American neighbors, the climate here is favorable for outdoor cultivation. This is mainly due to its proximity to the equator. The extensive coastline has long been an advantage for the export of commercial plants, if not cannabis products manufactured elsewhere. This includes North America but may increasingly include Central and South America as cross-border trade between countries begins to open as legalization takes hold across the continent. Europe is quite obviously in the government’s sights as well, but so are countries like Australia, which are starting to import medicinal cannabis from other countries.

The news also comes as Costa Rica moves to regulate its own hemp and medicinal cannabis industries (literally on the same day) and Zimbabwe opens its own first cannabis processing plant.

The race to grow, produce and distribute medicinal cannabis and the medicines derived from it is certainly on.

The new raw material plant of the developing countries?

As more and more countries get the legalization virus, especially when looking for an economic innovation that is also sustainable and, as a medical product, has significant value for export, expect not only a global deluge of medical production, but ultimately price cuts as well at destinations including those in Europe (especially France and Germany) but also places like the UK.

How and where Central and South American cannabis production will fall in all this is another matter, especially when competing with Africa (particularly for the European and Israeli markets), but the region is clearly emerging from last century’s war on drugs and opens up to new possibilities with a cannabis-scented smell.