Saturday 28 January 2023

Costa Rica legalizes production of medicinal cannabis and hemp

More jobs and investment to be achieved with approval in first debate of medical cannabis and hemp industry; second and final voting expected on Thursday

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28 January 2023 - At The Banks - BCCR

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QCOSTARICA – Legislators on Tuesday approved the bill that legalizes the production, industrialization and commercialization of medicinal cannabis and hemp for industrial purposes in Costa Rica.

Promoting the cannabis and hemp industry for medicinal and commercial purposes would help revive the economy

The initiative, promoted by independent legislator Zoila Rosa Volio, received the affirmative vote of 33 legislators, while 13 voted against it, after extensive discussion and the opposition of several legislators, mainly from the Restauración Nacional, Nueva República, Integración Nacional (PIN), and independent Shirley Díaz.

The plan focuses on authorizing the production of cannabis plants, both those with high tetrahydrocannabinol (THC) content, for medicinal and therapeutic use, and those with low THC, such as hemp, for multiple industrial uses.

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The bill was on the agenda of the Legislative Assembly since May 2019 and was ruled in the Environment Commission in November 2020. The idea of ​​the legislators is to generate economic reactivation by opening a new productive activity.

For the production of both plants and their derivatives, producers will have to register with the State and provide extensive information to the authorities about their activities. The Ministry of Agriculture (MAG) will be in charge of regulating the hemp market and the Ministry of Health of cannabis for medicinal and therapeutic use.

Health, Agriculture and the Costa Rican Institute on Drugs (ICD) will have periodic inspection and control powers over producers and developers of cannabis and hemp derivatives.

In the initiative, the sale of medicinal cannabis raw material is authorized to the Caja Costarricense de Seguro Social (CCSS), as well as to authorized laboratories for the development of the necessary medicines.

Among the latest motions approved by the legislators are that of the PLN legislator Roberto Thompson to authorize companies related to this market to set up, exclusively in cases of high technology and industrialization, in free zones, but not those dedicated to cultivation.

Cannabis is a plant species of the cannabaceous family, capable of producing cannabinoids. Non-psychoactive cannabis is known as hemp because of its low content of tetrahydrocannabinol (THC) and it does not have psychoactive properties, but it does have multiple possibilities for industrial use, while the psychoactive one has high levels of THC: marijuana.

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Hemp production in Costa Rica will be free, but medical marijuana production will require licenses issued by the Ministry of Health, 40% of which must remain in the hands of small producers, in order to open that market to entrepreneurs, as well as national and foreign investors. Those with a disease may also produce it for self-consumption, with a permit.

Regarding the specific tax, companies in the cannabis industry will have to pay a specific tax of 1% on profits. Firms that stay in the free zone will not be able to avoid said tax.

The legalization aims to create an industry and give producers more resources to leverage their businesses through cannabis. (Courtesy MAG)

After approval, Paola Vega, president of the Environment Commission, assured that this is one of the most important initiatives to come out of that forum. “We are inheriting the country an initiative that will generate employment, new business models and productive chains, but at the same time it advances in breaking down stereotypes around a crop that should not have them,” she pointed out.

Legislator Zoila Volio thanked all those who voted for the initiative, in particular those of the Environment Commission, as she said they improved the initiative and created a model law for Latin America.

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PUSC legislator Erwen Masís said that “when one presents a project that changes and breaks paradigms and is a project that transforms the established logic, a lot of courage is required.”

The bill now requires discussion in second debate and voting, expected as early as tomorrow, Thursday, October 21, before it can be sent to Casa Presidencial for the signature of President Carlos Alvarado and subsequent publishing in the official government newsletter, La Gaceta, if approved.


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