high time FOR ADVICE
Praetorium has cleared the land for foreign and local investment in Ecuador’s new cannabis industry.
What is your opinion of the recent reform on medical cannabis passed by the Ecuadorian legislative assembly?
The reform is significant as it is part of a general reform of the criminal code and drug prevention law, which classified cannabis as a controlled substance. Now, it has taken hemp out of the cataloged substances list, so it can be used in the production of industrial hemp and general cannabis. With this differentiation, industrial hemp would be regulated by the Ministry of Agriculture. Cannabis with THC, on the other hand, will be regulated by the Ministry of Interior. In the future, all health-oriented developments and research would fall under the umbrella of the Ministry of Health, allowing experts on each area to regulate accordingly.
What is Praetorium’s strategic role in the advancement of the industry and linking stakeholders for the development of medical cannabis?
We are already consulting the major private stakeholders of the industry in Ecuador, which has led to us playing an important role in talks with the government on cannabis. Through this collaboration, we have been able to communicate with key European, Canadian and American players in the industry, which have pledged to invest over USD200 million through 2025 in our local cannabis industry. We have asked these groups to invest first in the geological and ecological research studies to identify where Ecuador should grow hemp and which strains in particular are best suited for it. We want to learn from the mistakes of other countries and, alongside foreign sector leaders, identify and establish our own high-quality brand of hemp as a country. We have also gathered a long list of local companies looking to partner with foreign firms and explore business opportunities in the sector.
What do you expect to be Praetorium’s contribution to the development of the private sector?
We expect to support all players in navigating the legal framework of this rising and complex industry. Our goal is to be certified nationally and internationally, through partners, as a firm that assists local companies in the commercial aspect of the business, helping the country secure international demand, and identify market trends that create economic opportunities for the country’s future cannabis industry. This way, we will create jobs and economic growth, while building up Ecuador’s brand the same way as with bananas and cocoa, which are globally recognized as the best in the world. We have prepared a package of incentives nationwide to promote investing in the sector. From tax cuts to other fiscal benefits, there is a wide-ranging set of conditions and regulations that, if properly managed, make investing in cannabis a great business opportunity regardless of where you are based. We also have legal security and fiscal stability to solve the main concern for foreign investment groups looking to open business overseas.
What is the ideal roadmap for medical cannabis and other uses of hemp for the region?
We need to be responsible and manage the expectations of all interested parties. We are at a delicate stage in which we cannot allow ill-informed people to make mistakes and set a bad precedent and risk the growth of this industry. First, we need to attract the people to identify the regions and strains with highest commercial potential and then promote partnerships between foreign and local companies to exploit this potential, creating jobs and new products while building a circular economy around this resource. We have a solid constitution that provides legal security and generates trust within the international investment community. We have a more competitive environment and better incentives than most countries in the region because we are allowing foreign companies to partake in the industry’s early development. Both producers and potential customers should contribute in the industrialization of the hemp sector, leading to its use as a biofuel, hempcrete, textiles, and grooming products, among others. ✖
Foreign investment could rise to USD200 million by 2025 Legal framework benefits international investment community