In the June 2019 edition of the Colombia Cannabis Investor publication, Plena Global’s Head of Partnerships and Government Relations – Colombia, Mauricio Krausz, shares insights from his experience leading Econnabis SAS to be one of the first entities in Colombia to receive cultivation and production licenses.
Early applicant
An interview with Mauricio Krausz, Head of Partnerships and Government Relations at Plena Global.
CCI: What challenges did you face as one of the first companies to receive a license?
MK: I was living in Barcelona in December 2015 when former President Juan Manuel Santos signed the first decree with respect to the legalization of medical cannabis. I phoned my business partner, Tony Levi, who had originally taught me all about medical cannabis – its cultivation and extraction protocols and dosing – and we decided to proceed with the creation of Econnabis in 2016. From the beginning we decided to apply for all the licenses (use of seeds for sowing, sale, delivery and scientific purposes, cultivation of both psychoactive and non-psychoactive plants, and the manufacture of cannabis derivatives as well as domestic distribution, scientific research, and export) because we understood that each license was tied to another. In retrospect, this was a good strategic business decision because Econnabis avoided the setbacks of not obtaining licenses that others faced. We changed and altered elements of our application throughout the years, but from the very start Tony and I were adamant about wanting to take Econnabis as far as we could.
CCI: As one of the first Colombian LPs, were you inundated with offers from foreign investors?
MK: It was a circus. We encountered every type of offer you could imagine. At the same time, Colombians were creating a bubble by applying for licenses and then selling the companies that had acquired those licenses. It reminded me of the gold and oil industry booms in recent years, and we know how those stories worked out. We knew we wanted to go with a group that shared our vision and that added value to what we were already doing. We had got as far as we could with our own resources. This is one of the most exciting and challenging industries in the world and we felt honored to be part of it. It was not about the money for us, it was about finding the right team of experts that would be successful in growing at scale and reaching as many people as possible with the products.
CCI: What made Plena Global the right fit?
MK: We had seen how many companies spoke about final products and marketing, but no one was really focused on cultivation. Plena Global was looking to tap into the cannabis belt, the equatorial zone with 12 hours of sunlight. Their vision was centered around cultivating a consistent supply at scale and on spec in ideal geographic locations. In addition, Plena Global focused on the cultivation and extraction of medical cannabis, and building a production chain with which they can ultimately improve the quality of life of as many people as possible around the globe through a B2B channel.
CCI: Are there any other regional markets that take your interest?
MK: Peru is an interesting opportunity with a government history of investing heavily – and successfully – in agriculture. Although the legislation is in the process of finalization, opportunities are emerging for Peru to become yet another cannabis cultivation powerhouse in Latin America.
CCI: Do you think the criticism about value added products is legitimate?
MK: I believe that this is the entire reason the law was passed; I think if we were allowed to export flower we would be stuck. But, by becoming an extract economy, it obliges investment and science to come in. It’s still a raw material, but it’s an active pharmaceutical ingredient (API) with added value.
CCI: How has your company approached community relations around its project?
MK: When we started Econnabis, the first presidential decree required companies to have a social impact project. We thought a good social impact project would be to invest in cannabis education. After engaging with the community to understand their needs, we started creating our corporate social responsibility program focused on direct community empowerment through different programs. We’re starting a drug prevention program in Nemocón in which we provide the necessary resources to parents, schools and teenagers to educate and make informed decisions. We are also looking to invest into a second-language program in English. At Plena Global, the company believes strongly that we have an opportunity, and a responsibility, to use our knowledge and our capabilities to make a positive and holistic impact on the communities where we operate across the globe. Our approach to social responsibility includes providing holistic support to the communities in which we operate. We focus on initiatives that will create generational impact, empowering our employees to give back to their communities, and ensuring that we run our company in a way that upholds important social responsible policies and practices.
CCI: Does Colombia have the potential to make its own medicine?
MK: I think it does, and it’s in the hands of the private sector. Very respectable laboratories are learning about this industry and that’s a positive thing. The capacity is there, and the fact it’s produced here also has effects. I read an article about Colombia having a huge potential for clinical studies, so we’re in an amazing position.
CCI: Do you have a wishlist of reforms you’d like to see from the government?
MK: As with new laws, there is still a lot of work to be done to perfect them. The first and most important one is to clarify the rules of commercializing non-psychoactive cannabis. There is a common understanding that the non-psychoactive cannabinoids are not considered controlled substances. There is an opportunity for Colombia to become the world’s powerhouse in exporting non-psychoactive cannabis once there is clarity on the government plans to classify these. On a medicinal level, cannabis has to be classified on its own: not as a medicine. There’s a lot of difficulty regarding on-scale production for the domestic market because INVIMA requires clinical studies.
CCI: It’s an exciting industry, but do you have any concerns about how the industry is developing?
MK: My main concern is some companies are over promising results without providing a proper proof of concept and this can be detrimental to the entire marketplace. Laws on a global level are still being developed. Over promising results seems to be creating a false expectation in the market. This can affect everybody in the local industry as well as the perceptions of those outside.