Ecuador’s Emerging Cannabis and Hemp Industry
The cannabis and hemp industry is an emerging new industry in Ecuador with the Reform of the Criminal Law, enacted on June 21st, 2020.
Included among the reforms is the decriminalization of possession of drugs containing cannabis or derivatives as their active ingredient for therapeutic, palliative, or medicinal use, or for the practice of alternative medicine. In addition, the Law of Control and Prevention of the use of Drugs has been amended, excluding non-psychoactive or hemp cannabis from control, extended to the cannabis plant or any part of the plant, whose delta-9-tetrahydrocannabinol (THC) content is less than 1% dry weight.
Based on the abovementioned Reform of the Criminal Law, the Ministry of Agriculture had 120 days to issue the regulations applicable to the agro-industrial activities around non-psychoactive cannabis and hemp in Ecuador; hence on October 19th, 2020, the Ministry of Agriculture issued the Ministerial Agreement No. 109-2020, which regulates the Import, Planting, Growing, Harvest, Post-Harvest, Storage, Transportation, Processing, Marketing and Export of Non Psychoactive Cannabis or Hemp and Hemp for Industrial Use. This Ministerial Agreement came in force upon its signing and execution. This regulation stablishes the requirements that have to be fulfilled in other to obtain the seven types of licenses, which authorize the following activities only regarding cannabis or hemp with a concentration of THC below 1%:
- License for the Import and Commercialization of Non-Psychoactive Cannabis or Hemp Seeds or Cuttings, or Seeds of Hemp for Industrial Use.
- License for the Import and Commercialization of Non-Psychoactive Cannabis or Hemp Seeds, or of Non-Psychoactive Cannabis or Hemp Cuttings, or Hemp Seeds for Industrial Use.
- License for the Cultivation of Non-Psychoactive Cannabis or Hemp.
- License for the Cultivation of Hemp for Industrial Use.
- License for the Processing of Non-Psychoactive Cannabis or Hemp and Production of Non-Psychoactive Cannabis or Hemp Derivatives.
- License for Plant Breeding and / or Germplasm Banks and Research.
- License for the Acquisition of Non-Psychoactive Cannabis or Hemp Derivatives and / or Biomass or Flowers, or Hemp Biomass for Industrial Use, for Export.
On the other hand, this generated the need for the Ministry of Health (abbreviated as MSP in Spanish) and the Agency for Health Regulation, Control and Surveillance (abbreviated as ARCSA in Spanish) to accelerate the development of regulations applicable to finished products, since the Reform of the Criminal Law also opened the door to the production and import of finished product, which as defined in the Ministerial Agreement No. 109-2020, is:
Finished Product: Preparation obtained from the production of Non-Psychoactive Cannabis Derivatives or Hemp, to be marketed or distributed as a product for human or animal use or consumption and that has a sanitary registration, sanitary notification or the permit that applies according to the type of product based on the Ecuadorian regulations. Among them, but not limited to, are the following: processed foods, dried flower, beverages, food additives, food supplements, cosmetics, homeopathic products, medicines, medical devices, processed natural products for medicinal use and veterinary products.
Based on the above mentioned and considering how fast the industry moves, on February 25th, 2021 the Agency for Health Regulation, Control and Surveillance (ARCSA) issued Resolution No. ARCSA-DE-002-2021-MAFG with the “Sanitary Technical Norm for the regulation and control of products for human use and consumption containing non-psychoactive cannabis or hemp, or its derivatives”, which came into effect the same day. This resolution allows the production, import and commercialization of the following finished products with the concentration of THC specified for each category:
- Pharmaceutical products in general, processed natural products for medicinal use and homeopathic products (Pharmaceutical products that contain a concentration of THC equal to or greater than 1% in their formulation will be regulated as drugs subject to control.): Less than 1% THC;
- Processed foods and food supplements: Less than 0.3% THC;
- Cosmetic products: Less than 1% THC;
- Medical devices, Hygienic Products for Industrial Use, Pesticides for Household Use, Pesticides for Public Health or Pesticides for Industrial Use, Household Hygiene Products and Absorbent Personal Hygiene Products: Less than 1% THC.
Considering how quickly the regulations moved, the Ministry of Health did not want leave anything out, therefor it gathered a group of experts and developed the regulation for the prescription, provision and therapeutic use of medicinal cannabis and pharmaceutical products containing cannabinoids and on March February 26, 2021 issued the Ministry Agreement No. 148-2021, which came into effect on March 15th, 2021.
It is worth noting that the cannabis/hemp regulatory framework has moved quite fast in Ecuador and has opened the eyes of many local and international investors. The authorities are aware of what this industry can generate to the country in terms of research and investment, therefore, as long as the players comply with all the rules, they will be able to develop a myriad of products, since Ecuador, for now is the only country in the region that has showed so much openness; and as a consequence, it is expected that it may become a research and development cluster for cannabis and hemp products that will be sold all around the world.