The Recent Law Passed by Congress Means That Local Producers Can Benefit From the Economic Perks of a Market That’s Currently Skyrocketing.
For some years now, one of the most predominant topics in Costa Rica’s political debate has been the legalization of medicinal marijuana. The vast majority of Congress and the President were in favor, since it was seen as a potential way to reinvigorate the local economy after the temporary stagnation that came with the COVID-19 pandemic, but some specific details hampered the discussions until recently.
In January, Congress approved the law to legalize medicinal marijuana, providing a framework for local producers to industrialize and grow their own hemp. The executive power, however, vetoed the law as it didn’t see eye to eye on some specific articles. After a new draft was filed by Congress earlier this month, President Alvarado immediately passed the new law and announced the official legalization in Costa Rica.
What the law allows is for the cultivation and industrial production of hemp, as recreational marijuana continues to be prohibited. In order to insert oneself into this market, any potential producer will need to ask the government for a special permit.
As soon as the announcement was made official, many sources celebrated how this law would help in the advancement of healthy options for those in need. After all, medicinal use of cannabis is known to alleviate the effects of illnesses, and help as a painkiller and as a counter to the intestinal effects of chemotherapy.
Apart from the well-documented medical advantages of hemp, one of the main arguments that was central in the discussion was the potential economic development in rural areas. Since the 1990’s, there’s been an important cultural and structural divide between Costa Rica’s Metropolitan Area and its rural counterparts. Despite providing the country with most of its natural wonders, resources, and agricultural production, these communities have suffered from a lack of support for developing and expanding their internal economies. Hemp is seen as an important opportunity to diversify the country’s exports.
Following the steps of other countries in the region like Argentina, Chile, Colombia, Ecuador, México, Paraguay, Perú, and Uruguay (which also has legal recreational marihuana), Costa Rica has inserted itself into one of the markets with the most projected growth in the short term. In 2020, Euromonitor International registered that the CBD medicinal market had an estimated value of nearly $15 million, and their projections for the next five years see the industry growing by at least 146%.