In the world, the commercialization of products with CBD -Cannabidiol– is gaining momentum and Costa Rica is no exception. In the country, it is easy to find a wide range of products ranging from cosmetics, food supplements, to items for pets. A wide portfolio offered by countless suppliers, from international brands to other homemade ones.
That is why experts consulted urge the development of a legal framework by the Executive Power to regulate medical cannabis. The independent deputy, Zoila Rosa Volio, stressed the importance of advancing with the issue since the country’s commercial opportunities are being monopolized by other nations that have been, legislatively, more proactive in this regard.
For more than a year, the congresswoman has promoted file 21,338 “Law of Cannabis for medicinal and therapeutic use and of hemp for food and industrial use.” In it, a regulatory framework is contemplated for, not only CBD products, but also for all those that can be produced from the hemp plant, from which it is derived. This with the intention of enhancing economic possibilities and guaranteeing a product that meets quality standards and adequate traceability for consumers.
Between 2016 and 2020, the global market for CBD products – Cannabidiol – was estimated at $ 5,609 million, according to a study presented by the Foreign Trade Promoter (Procomer), last year. By 2027, analytics firms such as Market Research Future and Fortune Business Insights estimate that it will reach $ 40 billion annually. Half of this would be concentrated in the United States. This, according to the company BDS Analytics, which estimates that local market at $ 20 billion by 2024, as reported by Forbes.
Completely legal
In recent years, there has been a great myth about the plant that produces CBD, this, because hemp belongs to the genus Cannabis and from which another species that stands out for its high THC content -Tetrahydrocannabinol- also emerges.
These two are currently the best known cannabinoids: These are organic compounds that activate receptors present in the body. The difference is that TCH is intoxicating, while CBD is not, for this reason this substance when isolated is completely legal. In fact, that is the only reason why records have been obtained from the Ministry of Health, added the experts
A Tico firm obtained the first permit to market CBD products, a few years ago, being the process “arduous and several years”, as explained by its managers. “You have to meet certain requirements to register the product. This includes proving it is THC-free with a lab report. This also allows imports, beyond that, there is no regulatory framework. This “would help remove the stigma around it,” said the expert, adding that it is a complicated issue because the situations seem to respond more to political than technical criteria.
“There has been a bit of tolerance, in terms of the markets, but there has not been a clear north on the part of the Government. On the legal side, as there is no clear regulation, there is a lot of insecurity in this regard”, he added.
This, in addition to hindering the development of the commercialization of these products, also limits their production in the country. It could even stop potential investments in the national territory, as Deputy Volio points out. Since the growing interest in the subject is not exclusive to Costa Rican entrepreneurs. According to the experts “even foreign investors” have come to know the rules of the game in the country.
Local offer
This new popularity, without a set of official rules, could also backfire on consumers because people who do not meet quality standards can offer products at lower prices, since they are manufactured and marketed informally.
In this sense, the representatives of The Up Collective, Alejandra Garcia and Natalia Solano, told that for users, the main deficiency derived from the current situation is the lack of traceability.
“It is very important to put knowledge in the hands of people. Not just general guidelines, but taking seriously what you are consuming. What is quality and what is not? For example, in extractions for oils, there are many methods. It is a traceability issue and our market is missing a lot”, they affirmed. This group, led by a group of women, joined forces to offer an advisory company on various fronts related to this topic.
The group offers support to entrepreneurs who seek to venture into the commercialization of CBD products. Among their customers, they have brands of drinks, creams and even a line of supplements that includes CBD sugar gummies.
Beyond the umbrella of this group, in the country it is possible to find a wide variety of international brands, just by searching for “CBD Costa Rica”, on a social network such as Instagram. There it is possible to find renowned brands such as cbdMD which operates with an authorized distributor in our country. For example, these products come with a code that the consumer can enter on the website to obtain the lab report.
Many products
Creams for muscle aches, thanks to its anti-inflammatory properties. Capsules with CBD (you can get CBD capsules from Blessed CBD) and melatonin to regulate sleep, due to its relaxing effects. Those are two of several products in the catalog that high-performance athletes like BMX rider Kenneth Tencio, triathlonist Carlos Moncada or surfer Anthony Fillingim endorse, according to images on the company’s account. It even offers a line of specialized products for pets suffering from stress, anxiety or other more severe illnesses.
For examples like this or those belonging to their collective, Garcia and Solano stated that it is imperative that the private sectors take the lead and suggested that unions such as the Chamber of Commerce get involved.
Regional expansion?
Given that, even with the current context, there are already entrepreneurs who have moved forward, the “nearshoring” trend that has caused the Pandemic could affect investments in the country. In fact, cbdMD stood out last year in electronic sales in the United States, according to a report by the Brightfield Group firm. In fact, in the first quarter it was one of the top five in that country.
That same analytical company has already highlighted the potential of countries such as Colombia, Mexico and Uruguay to become the leaders of this market in the coming years, due to the fact that they have already approved legislation in this regard.
According to preliminary data from the firm, the $ 6 million of sales reported in Latin America, during 2018, could grow to $ 448 in 2023. This could grow with a regional expansion of companies like the one mentioned above. However, since the legislation is different in each nation, the data for informality may vary. This despite the fact that the United Nations Organization made it clear, last December, that CBD is not an intoxicating drug.
More Education
Another issue on which the experts agreed is the lack of education that exists on the subject. This is something that the specialized journalist, Daniel Pez, of the Medical Cannabis News portal corroborated. This initiative has repercussions in more than 20 countries where it seeks to promote discussion around the subject. “It is a fairly new topic. There was always talk of cannabis but never hemp,” he added.
For example, as there are no clear guidelines, currently only 100% THC-free raw material can be imported. However, worldwide, laws establish that there may be a small amount of THC, as long as it does not exceed 0.003% concentration. This makes importing the product for manufacturing in the country practically impossible, if not extremely expensive. For that reason, the commercial focus has been on bringing ready-made and isolated products to meet the requirements.
However, he is optimistic due to the growing support for the initiative promoted by Volio. “State cohesion is lacking. But, I am impressed to see 13 deputies asking for this when at first it was only one”, he affirmed.
Legislative support
For the proposing congresswoman, the discussion should not be delayed since it is a scientific issue. “It helps health, it is classified as a superfood, creams, shampoos,” she said while lamenting the loss of opportunities for the country. “Procomer already said it. The point is that the window of opportunity that we have is very short. Colombia, Uruguay and Mexico have already entered. When we arrive, the price will be on the ground and we will lose investors,” she added.
However, the initiative was delayed due to the lack of support from the Executive Branch. This, even when President Carlos Alvarado promised on May 2nd of last year that it would be a priority. “That he gave the support and then withdrew it does not send a good signal. It is a shame, because, indeed, it is a form of economic reactivation for the country and it is being wasted at a time that is booming,” Voilo affirmed. Despite the fact that the Executive has had control of the legislative agenda because it is in a period of extraordinary sessions, it has not called the bill for discussion.
Economic potential
Products made with CBD are just the tip of the iceberg of this economic potential. Thanks to the versatility of the plant, the parts that are not used to extract the substance also have uses that are derived in high quality and high demand products. The best known, currently, is the textile. However, the advancement of technology is finding a growing niche for the hemp plant in construction supplies.
Additionally, a regulatory framework for CBD would set a precedent for the country to capitalize on future trends. As the experts pointed out, the plant has more than 100 identified cannabinoids. A large number of them such as CNB -Cannabinol- or CBC -Cannabichromene- are not intoxicating and have more specific uses than CBD, especially in medicine. In fact, there is already a growing industry around the CNB in the United States. For all that, many experts consider this plant as ‘green gold.
