Argentina's Only Operational Legal Cannabis Company And Its Future, Explained

Written by Natalia Kesselman, originally published on El Planteo

Back in 2017, Jujuy was one of the 17 Argentine provinces to support Bill 27.350 on "Medical and Scientific Research for Medicinal Use of the Cannabis Plant and its Derivatives." That same year, in order to start a medical cannabis project, the provincial state-owned company, Cannava SE, was founded.

Today, the company (the only that's fully operational in the country) manages 35 active cultivation hectares that produce 2,000 cannabis plants. However, the northern province recently presented a project in front of numerous ministers, proposing an expansion of the workspace to 600 hectares.

To understand the implications of the expansion and the objectives of this government project, El Planteo interviewed Gastón Morales, president of the state-owned company.

Objective And Strategy

Gastón Morales states that the main objective of the Cannava project and its proposed expansion is "to consolidate Jujuy as a hub for scientific and biotechnological development associated with the development of the medical cannabis industry."

This objective takes several dimensions.

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In the first place, the goal is for "the state company to produce medical grade cannabis derivatives that are safe, controlled and affordable for the people, and competes in quality with the products manufactured today at an international level," Morales explains.

In terms of public health, this would help meet the population’s medical demands, which are currently unsatisfied.

For second, it is essential to understand cannabis is a global industry, advancing by leaps and bounds, Morales says. For this reason, the northern province aims to "insert itself into this global growth projection, opening up the possibility of exporting industrialized products to other countries."

These exports would translate into a powerful inflow of foreign currency that would largely benefit the province's economy.

Thirdly, the enormous labor possibilities that this project will entail must be thoroughly considered:

"The entire value chain must be developed inside the province’s territory - from cultivation to the extraction and formulation of the active pharmaceutical ingredients derived from the plant," the young executive describes.

Thanks to this entirely associated production chain, the project would be creating between 3 and 4 jobs per hectare. Thus, the plan aims to generate direct employment for more than 20,000 families that today depend on tobacco and sugar cane crops. Both those industries are in commercial decline, so diversification could be a valuable lifeboat.

"We aim to reach 2,000 hectares and 8,000 jobs all throughout the year," says Morales.

The Productive Chain

The need to expand to 600 hectares is owed to the fact that the project includes an Industrial Technological Plan to produce the medicinal derivatives of the plant on the spot. This way, all the steps, from the crop to the final product, would be carried out within the province’s territory.

"The pilot plant for extraction and pharmaceutical formulation will be ready by the end of September," says Morales. "In parallel, work has begun on the biotechnology complex, which will house a laboratory specialized in the production of Active Pharmaceutical Ingredients derived from cannabis."

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This laboratory will have the testing equipment required to ensure that the high GMP standards are strictly complied with. This step is essential  in order to obtain good agricultural practices and good manufacturing practices certifications.

In addition, Cannava and the Government are committed to inserting themselves in the technological and scientific race that the global medical cannabis industry is already running. This is why the biotechnology complex will also include a research and development module.

Jujuy, Beacon Of Sustainability

"For many decades Jujuy was a synonym of chaos and unfeasibility," says Morales. However, in 2015 the game pieces began to shift.

Today, Jujuy is a beacon when it comes to renewable energy: it has the largest photovoltaic park in South America, called Cauchari. This park has a capacity of 300MV, and is currently working on expanding another 200MV.

Likewise, "the Jujuy Verde - Carbon Neutral 2030 policies aim to achieve a process of adaptation and mitigation to climate change that crosses all government areas."

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The province also has a comprehensive solid urban waste management plan, which is on the way to becoming a unique model. It "is backed by the European Investment Bank, which allowed the creation of a state company that deals with waste management throughout the province," says Morales.

Lastly, Jujuy seeks to tackle "the classic Argentine extractivist logic" and make it sustainable. In order to do this, it must face "the challenge of producing lithium batteries within the provincial territory, to give added value to the mineral that is extracted there."

Long-Term View

Morales claims that even in 2018 "the creation of a ‘system of small and medium growers and producers’ was set as a strategic medium-term goal,” when the conditions are appropriate.

Once the objective of “generating the conditions that allow having manuals and practices certified by national and international accredited entities” has been achieved, Cannava can move forward with the “convening of those small local producers who wish to reconvert their activity.”

This implies that Cannava would provide these small and medium producers with the “knowledge, expertise, traceability, technique and - if things continue to develop well - market”, to articulate their inclusion.

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Today, the project is focused on the production of medical grade cannabis derivatives. However, Morales does not rule out the possibility of industrially exploiting the remaining biomass, once the legal conditions are in place.

"The cannabis project is but one more public policy project aligned with this highly progressive government’s philosophy, feet grounded and looking ahead to the next 50 years," Morales adds.

"The challenge is to consolidate the province as a productive and technological hub related to the cannabis industry, because that will allow for the creation of work and knowledge throughout this decade that has just begun."

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Lead image by Ilona Szentivanyi. Copyright: Benzinga.