Pubdate: Fri, 05 Aug 2016
Source: New York Times (NY)
Copyright: 2016 The New York Times Company
Author: Ezra Kaplan


RIONEGRO, Colombia - Like many drug barons in Colombia, Federico 
Cock-Correa wants to sell his product globally. Just 15 miles outside 
Medellin, Mr. Cock-Correa is looking to replace vast acres of flowers 
with marijuana plants, with plans to export the harvest.

But unlike the brutal heroin and cocaine trade that once flourished 
nearby, his operation has the government's stamp of approval.

Last year, President Juan Manuel Santos spearheaded an overhaul of 
Colombia's 30-year-old drug laws, which formally legalized medical 
marijuana for domestic use. Crucially, the new law also allowed the 
commercial cultivation, processing and export of medical marijuana 
products - like oils and creams - although not the flower, the part 
of the plant normally rolled into a joint.

Officials hope the move will put a dent in Colombia's drug 
trafficking business by creating a legal opportunity in an industry 
historically controlled by the black market. The authorities believe 
the new law will also help attract investment and give the economy a 
lift, though it will take several years before the returns on the 
investments become clear.

"It's health; it's science; it's the opportunity to redeem the name 
of the country," said Mr. Cock-Correa, who heads the Colombian arm of 
PharmaCielo, one company looking to capitalize on the new rules. 
"It's a shift from producing the plant that kills to producing the 
plant that cures."

Businesses in Colombia like PharmaCielo believe they can establish a 
foothold in the drug industry, just as their illegal counterparts did 
in past years. In the United States, the marijuana industry remains 
bogged down in clashes between local and federal regulation. Though 
some states have legalized the drug in recent years, the federal 
government currently bars the import of any marijuana products.

"We think that Colombia can build a successful international business 
around the exportation of medical marijuana," Alejandro Gaviria, 
Colombia's health minister, said in an email. "The country is ready 
to participate in this emerging global market."

PharmaCielo, based in Toronto, was founded in 2014 and in June became 
the first company in Colombia to receive a license from the 
government to manufacture cannabis products. It is still waiting for 
licenses for cultivation.

Other companies have followed suit. In July, the government granted 
production licenses to another Canadian company, Cannavida, and a 
Colombian company, Labfarve-Ecomedics. Unlike PharmaCielo, 
Labfarve-Ecomedics will focus on the domestic market, which may allow 
it to start faster since it will not need an export license.

Once it receives approval, PharmaCielo will start growing marijuana 
and then process the material into medical products that can be 
exported to Canada and other countries that allow the importation of 
medical cannabis. The United States, for now, remains a long way off.

"Ultimately, this has the ability to be a global marketplace measured 
in the billions," said Anthony Wile, a Canadian venture capitalist 
who is one of PharmaCielo's backers. Jim Rogers, a co-founder with 
George Soros of the Quantum Fund, is also an investor.

Standing on a 32-acre plot of land that will be PharmaCielo's initial 
site, Mr. Cock-Correa set out his case for why Colombia is ideal for 
marijuana production, centered on the country's advantageous climate 
and soil conditions. There is a reason that Pablo Escobar got his 
start in the Colombian drug world by trafficking marijuana.

For over 50 years, the Rionegro region in the Colombian Andes - where 
PharmaCielo has its land - has been one of the premier locations for 
the production of cut flowers bound for the United States and Europe. 
The region accounts for a quarter of all the flower exports from 
Colombia, the leading supplier of cut flowers to the United States.

Expansive greenhouses, constructed of simple white plastic tarps 
draped over support poles and wiring, dot the area's rich green 
hills. The fertile volcanic soil nurtures flowers like chrysanthemums 
and carnations year round.

At the heart of the company's plans, though, are the finances.

When production is in full swing, PharmaCielo expects to produce a 
gram of marijuana flowers for about 5 cents. The same amount costs at 
least 10 times as much to produce in the United States and Canada.

In North America, marijuana growers generally have two options: grow 
the crop outdoors, which produces just one harvest a year, or grow it 
indoors in warehouses, which is energy-intensive.

Companies investing in Colombia, however, want to rely on the 
country's natural attributes to break that mold.

Marijuana plants move through the vegetative stage into the flowering 
stage when lighting conditions change. They grow larger, and their 
yield increases, the longer they are in the vegetative stage. They 
finally begin to flower when they are exposed to 12 hours of 
sunlight, followed by 12 hours in the dark, typically in the spring or summer.

To achieve the 12-hour cycles, American and Canadian growers who want 
multiple harvests must rely on artificial lighting. But because it 
lies along the Equator, Colombia has more days that naturally follow 
the 12-hour pattern than countries that are farther north, like the 
United States and Canada.

PharmaCielo plans to supplement the sun by using low-wattage LED 
bulbs to effectively trick the plants into staying in the vegetative stage.

"Our growth comes from sunshine," said Marcelo Siqueira, the acting 
chief operating officer at PharmaCielo Colombia. The company, as a 
result, expects to have four harvests a year at substantially lower 
costs than North American rivals.

A network of reservoirs, meanwhile, help conserve water and, by 
extension, control costs. The fertility of the soil means the company 
will be less reliant on products like peat moss and shredded coconut 
fibers to help plants grow, in that way saving money and cutting down on waste.

For now, however, PharmaCielo is in a holding pattern. As it awaits 
the necessary licenses, Mr. Cock-Correa is planting flowers on the 
company's 32 acres.

Mr. Cock-Correa, who has been in the flower business for 30 years, 
says the process of switching the flower farm to a cannabis farm is 
straightforward. There is a trained work force, the infrastructure is 
in place and the soil is primed and ready for planting.

Once it gets the right licenses, the company estimates that it could 
be managing 600 acres of active cultivation in two years. Mr. 
Cock-Correa wants to contract with other nearby farms that currently 
grow flowers.

On a tour of the initial plot in May, the dirt beds still had flowers 
in them. Workers were hurrying to finish cutting and packaging new 
blossoms in time for Mother's Day.

"All of this," Mr. Cock-Correa said, "will be cannabis within a year."
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MAP posted-by: Jay Bergstrom