Government funded healthcare doesn’t usually come with medical weed, but Colombia is changing that. Colombia recently announced that medical cannabis is now a mandatory part of the healthcare program going forward, for all residents. Read on for details.
Colombia and mandatory medical cannabis healthcare
Colombia ended 2022 with a pretty cool announcement. According to the Ministry of Health, as of the beginning of 2023, Colombia will involve medical cannabis products, as a mandatory part of healthcare coverage. The products must be plant-based; and all insurance providers in the country are mandated to provide them, at their own cost.
On December 30th, 2022, The Ministry of Health signed off on Resolution 2808 of 2022. These revisions get around issues that came out of the previous year’s Resolution 2292, which added 654 medical procedures, and increased the active pharmaceutical ingredients covered, to 1059 from 459. Included are medical marijuana derivatives, which made their first appearance in the 2022 resolution. Though psychoactive THC medications remain illegal, the law according to that resolution, mandates the coverage of CBD and THC derivatives.
One of the ambiguities that arose from Resolution 2292, was whether insurance also covered plant-based medical cannabis magistral preparations (preparations made directly by the pharmacist/chemist, which are not ‘standardized’ medications). The new revisions confirm that such preparations are okay.
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Along with this clarification, Resolution 2808 also added more medical conditions that can be treated with medical cannabis, like: chronic and neuropathic pain, cancer pain, sleep disorders, epilepsy, and fibromyalgia.
Khiron – the big winner
Perhaps the organization to benefit from this new legal update the most (and who has been benefiting since Resolution 2292 went into effect) is Khiron Life Sciences, Corp. (KHRN) This Bogotá, Colombia based pharmaceutical company saw business grow exponentially after Resolution 2292 went into effect. By midway through 2022, the company reported that more than 90% of its cannabis sales in Colombia, were for cannabis prescription medications.
This is already a lot of business, but Khiron played yet another hand. Khiron has a medical cannabis clinic network (100% owned by the company), called Zerenia™ Colombia. Zerenia signed a contract to provide medical cannabis medications, with the biggest of the government-owned insurance companies in the city of Bogotá. That company reportedly has over a million covered residents.
According to a PRNewswire report, this union marks the first time a Latin American insurance company has signed a contract for medical cannabis services and products. And it gives Khiron a leg up in the growing medical cannabis industry of the country.
Said Khiron CEO Alvaro Torres, “Today is a great day for patients in Colombia and Khiron. We welcome the decision from the new Colombian government to categorically mandate insurance coverage for our medical cannabis products. With this decision, Khiron will immediately tackle the backlog of covered medical cannabis products to our patients.”
He continued, “In parallel, we have also secured a first-of-its-kind contractual relationship with one of Colombia´s largest government-owned insurance companies for medical cannabis specific healthcare services and dispensation. These two achievements, will allow us to revert to predictable recurring revenues, shorter collection periods and improved cashflow.”
What about recreational cannabis in Colombia?
Recreational cannabis isn’t legal in Colombia, though it was decriminalized in 1994. The decriminalization covers the personal use and possession of all drugs, not just weed. In 2012, this was further flushed out with the specific amount of 20 grams as the line for prosecution. In 2015, a Constitutional Court ruling allowed the cultivation of up to 20 plants.
Then there was a downturn with former president Ivan Duque in 2018. That year he instituted a decree saying law enforcement could indeed confiscate small amounts of cannabis, along with giving a fine of over 200,000 pesos. In 2019, parts of the decree were shot down by the Constitutional Court as unconstitutional, but not the searching and confiscating of drugs; though it did remove the consequences so long as the amount is under 20 grams.
Sale, supply, and trafficking crimes are all predictably illegal. The maximum prison sentence for sale and supply is up to 20 years, which incidentally, is higher than the top amount given for rape. For those caught trafficking, the maximum is up to 30 years.
There have been several initiatives over the last couple years to legalize the recreational use of cannabis, but none succeeded. The country also tried a couple years ago to legalize cocaine, with a policy where the government would buy all the crop, creating a savings of 2.6 trillion pesos ($680 million USD). This did not happen, but it did shine quite a light on the high cost of drug eradication. Four trillion ($1 billion) is spent getting rid of the plants every year.
New government and cannabis reform in Colombia
That Colombia now mandated medical cannabis coverage as a part of healthcare, is likely related to the new governance of the country. In May and June of 2022, Colombia held elections in which standing president Ivan Duque, a member of the center-right Democratic Centre Party, (who brought us the backward moving decree in 2018), was barred from running due to term limitations.
Gustavo Petro of the Colombia Humana party won the runoff election, and became the first left-wing candidate to enter the presidency. Running mate Francia Márquez, is the first afro-Colombian vice-president, and the second woman to have the job.
This changeover came about a year after huge protests over Duque’ governance, particularly tax increases and general government corruption. The protests were a breeding ground for police brutality, sexual violence, and may have caused the disappearance of over 200 people. The months-long protests did make Duque withdraw a tax plan, but ran out of control for quite some time causing all kinds of damage. As tends to be, when things get shaken up like this, the population heads to the other side of the spectrum, to try something different.
Petro is all about ending the war on drugs. In August at a summit for mayors, he said, “Of course, peace is possible if you change, for example, the politics against drugs, for example, seen as a war, for a policy of strong prevention of consumption in developed societies… It is time for a new international convention that accepts that the drug war has failed, which has left a million murdered Latin Americans during these 40 years and that leaves 70,000 Americans dead from drug overdoses each year. The war on drugs strengthened the mafias and weakened the states.”
He went on, “The war on drugs has led states to commit crimes and has evaporated the horizon of democracy. Are we going to expect that another million Latin Americans will be murdered and that the number of deaths from overdoses in the United States will rise to 200,000 every year? Or rather, will we exchange failure for a success that allows Colombia and Latin America to live in peace?”
In a clear reference to the mistreatment of Colombia by America, Petro continued that such a new policy is “necessary because of the extraordinary threat posed by illicit drug trafficking to the national security of that country.” And that “Colombia has appropriate procedures in place to protect against innocent loss of life in the air and on the ground in connection with such interdiction, which includes effective means to identify and warn an aircraft before the use of force is directed against the aircraft.”
Colombia and global cannabis
Colombia joined in on the international cannabis trade in 2020. In fact, it was Khiron that made the first export of high THC products out of the country. These were all medical cannabis products that went to Farmacia Universal S.A.C. in Peru. Since that time, Colombian companies have exported cannabis finished products, seeds, and oils to several different nations.
The company Clever Leaves (US based multinational cannabis company) earned EU GMP certification for its facilities in Colombia a few years ago, making it the first country of Latin America to do so. The company was also granted a provisional license for operations in Portugal, from Infarmed. It opened a cultivation center in that country. And at the time, it looked like this was definitely the way to go.
Unfortunately, not many people predicted the cannabis industry well, and what seemed like it would work well in 2020, turned into the opposite by the end of 2022. On January 23rd of this year, Clever Leaves announced a staff cut of 25% in its Portugal facility, with the addendum that it wants to stop all operations in Portugal, and bring them back to Colombia to save money.
Clever Leaves CEO Andres Fajardo put it this way: “By exclusively cultivating and producing our cannabinoid products in Colombia, we aim to leverage our existing cost efficiencies in the country as we ramp our dry flower offering, believe this transition will allow us to optimize our production infrastructure and drive increased cost savings, positioning us to compete more effectively in the global medicinal cannabis market.”
It’s up and down for Colombia (and Colombian companies) in terms of weed. The Clever Leaves debacle fits in with tons of other layoffs in the industry; but it does seem that Colombia has found a way to increase its own market with mandatory medical cannabis as a part of healthcare. We’ll have to wait and see how the whole thing works out. And for Colombia’s next move in the international world of weed.
This is not the first story involving an insurance company partnering with a company to provide alternate medications. Last year I reported that the insurance company Enthea was partnering with the company Dr. Bronners, to provide psychedelic healthcare for applicable workers in America.
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