Ecuador Kicks Off Medical Cannabis Production

Ecuador is not the first country that comes to mind when one thinks about cannabis reform, either regionally or internationally. However, the country is clearly moving into the global medical cannabis market in an organized way. 

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

The inauguration was auspicious, attended by officials from the company as well as from the ministries of Production, Foreign Trade, Investment and Fisheries, the National Institute of Popular and Solidarity Economy, and the Deputy Minister of Production and Industries. No matter who else may take notice, this is clearly a coordinated effort and senior governmental decision to support a domestic medical cannabis industry and further one with global aspirations.

It is hardly surprising, given the fact that their neighbors, including both Columbia and Peru, are in the regional if not international supply chain business already.

The Status of Cannabis Reform in Ecuador

This little country on the left coast of South America, bordered by Columbia to the north, Peru to the south, Brazil to the east, and the Pacific to the west, has quietly moved forward on cannabis reform in an interesting way. In 2008, the constitution of the country, “drug” consumption, including cannabis, is not a criminal but rather a public health issue. As a result, cannabis is legal here for personal consumption with a limit of 10 grams. The sale, however, of cannabis is still prohibited unless it is for medical purposes. 

In 2016, lawmakers first proposed formalizing and legalizing the industry nationally. Ecuador’s National Assembly subsequently legalized medical use late in 2018 by a majority of 83-23. However it was not until late 2019 when the Organic Law Reforming the Comprehensive Organic Criminal Code was published and in June 2020 when the reform of the Organic Law for the Comprehensive Prevention of the Socioeconomic Phenomenon of Drugs, and Regulation and Control of the Use of Listed Substances Subject to Control Acts passed that the industry finally had a legal leg to stand on. 

At that point, the initial attention locally was on establishing a hemp rather than high THC industry but, like other places, reform has come, and has shifted yet again. Obviously, COVID has also played a role in delaying developments, but this period seems to be coming to a decisive end.

Like many of its Central and South American neighbors, the climate here is advantageous for outdoor cultivation. This is due in large part to its proximity to the equator. The extensive coastline has long been an advantage for exporting commodity crops if not manufactured cannabis products elsewhere. This includes North America, but it may increasingly include Central and South America as the cross-border trade begins to open up between countries as legalization takes hold across the continent. Europe, rather obviously, is also in the sights of the government, but so are countries like Australia, which are beginning to import medical cannabis from elsewhere.

The news also comes as Costa Rica moves forward on regulating its own hemp and medical cannabis industry (literally on the same day) and as Zimbabwe opens its own first cannabis processing facility.

The race is certainly on to cultivate, produce, and distribute medical grade cannabis and the medicines that come from it.

The New Developing World Commodity Crop?

As more and more countries get the legalization bug, particularly in a search for economic redevelopment that is also sustainable and worth a significant amount as a medical product for export, expect to see not only global gluts in medical production, but also, finally, price reductions in target destinations, including those in Europe (France and Germany in particular) but also places like the UK.

How and where Central and South American cannabis production will fall in all of this is another matter, particularly in competition with Africa (particularly for European and Israeli markets) but the region is clearly putting the last century’s War on Drugs behind it and opening itself up to new possibilities with a cannabis-scented odor.