Controversy Over Medical Cannabis Exclusion As Argentina Issues New Hemp Regulation: Experts Weigh In

Article via El Planteo

"The resolution shows a tremendous lack of political experience, legal foresight, and public policy planning," says Alejandro Mancuso, founder of Botanicanns S.A. and a recognized voice in Argentina’s cannabis sector, in an exclusive interview with El Planteo. He was referring to ARICCAME’s recent Resolution 1/2024, signed by agency head Dr. Ignacio Ferrari. The new regulatory framework has sparked debate within the industry, drawing mixed reactions from key players.

Resolution 1/2024, introduced as a step toward restructuring industrial hemp in Argentina, outlines a simplified process in two phases. The first focuses on the agricultural production and industrialization of hemp seeds, grains and fibers. The second, to be implemented later, would cover the production of cannabis flower and biomass. However, this framework has sidelined medical marijuana, causing concern and criticism among entrepreneurs and specialists in the field.

El Planteo reached out to ARICCAME for comment but had not received a response at the time of publication.

Resolution 1/2024 On Hemp In Argentina: The Industry’s Dismay

Mancuso, who is also the co-founder of Cannábica Argentina and a former Senate advisor, expressed disappointment that most investments in Argentina have been directed toward medical cannabis. "It completely leaves out medical cannabis, when the majority of companies in Argentina have invested around it. In fact, almost all Argentine companies have only invested in medical cannabis, and no company has begun investing in hemp," he says.

The entrepreneur highlighted that many companies, such as Cannava, Botanicanns, Whale Leaf Farm, Inkillay and Pampa Hemp, have heavily invested in medical marijuana with plans to export. But the new regulations have cast doubt on these efforts. "Many of those companies are now considering legal action to comply with the law," Mancuso warns, hinting at a possible wave of litigation to protect their prior investments.

For Mancuso, the situation reveals a lack of planning on the part of ARICCAME and Ferrari. "This shows that the agency's head lacks the tools to effectively represent the industry to higher authorities," he says. Mancuso believes the resolution has caused more confusion than clarity, leaving the industry waiting for stable public policies.

An Unstable Situation

Pablo Fazio, president of the Argentine Chamber of Cannabis (ARGENCANN) and managing partner at Pampa Hemp, shares the concern over the direction of Argentina's regulations. "The current situation of the sector is extremely difficult," Fazio says, emphasizing the challenges of such a volatile regulatory environment. "The main challenge is achieving sustainability and developing profitable business models in such a highly unstable regulatory context."

Fazio sees the repeal of Resolution 2/2023, which granted temporary permits for medical cannabis projects, as a setback for companies already operating under that framework. "The recent Resolution 1/2024 is a blow to the sector," he asserts, noting that the new regulation focuses solely on hemp, leaving behind the advances many companies have made in the medical field.

Fazio also criticizes that the resolution creates an uncertain landscape for ongoing projects. "The main problem is the lack of predictability and the absence of a clear long-term plan. We cannot keep investing in a sector where the rules change overnight. The industry needs certainty."

Like Mancuso, Fazio anticipates that the state could face legal entanglements from affected companies. "It wouldn't be surprising if, due to the violation of interests and rights, the state faces a wave of legal claims from affected parties," he warns, stressing the lack of legal security in the new regulation.

A Necessary But Insufficient Step

Despite the criticisms, some see the advance in industrial hemp regulation positively. Ruth Noriega, agronomist and consultant at IngCannabica Agroconsultora, says it was crucial to separate hemp from cannabis to promote its development in the agro-industrial space. "It was necessary to differentiate hemp from cannabis so it can thrive in agro-industrial settings," Noriega explains, citing Argentina's favorable climate and soil conditions for hemp cultivation.

However, Noriega also points out that the regulatory framework still imposes restrictions that hinder full development. "In regulatory terms, it's still tied to cannabis since it doesn't yet have free access like other industrial crops in our country," she notes, highlighting bureaucratic obstacles for those wanting to invest in hemp.

Noriega also emphasizes the need for other institutions to get involved in the regulation process. "Before choosing this licensing model, it's essential to clarify the roles of institutions like SENASA, ANMAT, INTI and INASE," she says, stressing the importance of approved germplasm options for crop development. Noriega warns that about 500 varieties are still waiting for approval, another roadblock for those looking to scale hemp production.

Criticism Of ARICCAME’s Intervention And Public Health Impact

Luis Osler, a drug policy lawyer and president of CAINCCA (Argentine Chamber of Cannabis and Hemp), criticized the decision to intervene in ARICCAME instead of strengthening its leadership structure. "It's unclear why, after 10 months, they opted for the intervention [of ARICCAME] instead of appointing directors and especially involving the federal council to get the industry moving," Osler questions, pointing out a lack of transparency in the decision-making process.

Osler also warns that the resolution not only affects the industrial sector but endangers the rights of patients relying on medical cannabis treatments. "This resolution is entirely against public health and the rights of patients, whom it dangerously sidelines," Osler states. He added that many cannabis industry investments are on hold due to the government's lack of clear responses.

"What's going to happen with the Ministry of Health's unanswered questions about THC genetics? The resolution is also not beneficial for the cannabis industry, which has invested a lot of money, only to be overlooked in favor of the hemp business, which remains minimal in Argentina," he pointed out. He also raises concerns about rising fees and the invasion of illegally imported genetics. "The licenses granted are formalized in the resolution, only to be effectively terminated within a month," he adds.

A Long Road Ahead

Despite the criticism, Diana Barreneche, an environmental lawyer and president of the Proyecto Cáñamo Civil Association, sees Resolution 1/2024 as an important step in developing Argentina's hemp industry. "It's the first step toward building a national hemp industry," Barreneche says, expressing hope that the regulation will unlock decades of stagnation in the sector.

Barreneche emphasizes that the resolution supports the production of “non-psychoactive” hemp, though she questions the use of this terminology: "Resolution 1/2024 of ARICCAME provides legal security for those wanting to cultivate and industrialize ‘non-psychoactive' hemp (even though the term is somewhat of an oxymoron)," she comments, pointing out the contradiction in defining hemp.

However, she acknowledges that much remains to be done to create a comprehensive regulation that includes both hemp and medical cannabis. "We need public policies that, instead of stalling the development of cannabis flowers, recognize the enormous productive potential we have as a country." For Barreneche, the true challenge will be crafting regulations that embrace all uses of the plant and promote policies that don't delay the rights of those who believed in cannabis' potential from the beginning.

Finally, Andrea Commenge, president of the Argentine Chamber of Industrial Hemp (CAÑAR) and representative of Landrace S.A., celebrates that ARICCAME has taken the necessary step for industrial developments to begin. "ARICCAME did what those of us working in industrial and commercial processes with an international outlook were waiting for," she says, noting that the regulation will enable R&D projects aligned with international standards to advance in the country.

Commenge also points out that the regulation opens the door to working directly with rural producers, bringing hemp varieties at cost, which will enable hemp cultivation across Argentina. "Now we're starting productive developments throughout the country, bringing hemp varieties at cost to work with rural producers," she explains, referring to the first stage of the regulation focused on fiber and grain production, while anticipating the second stage for CBD hemp. She also hopes this regulation will push the industry to align with international certification standards, which is key for export.

Conclusion

Resolution 1/2024 has sparked a storm of opinions in Argentina's hemp and cannabis industry. While some see the new regulation as an opportunity to promote industrial hemp development, others harshly criticize the lack of planning and exclusion of medical cannabis.

What's clear is that Argentina faces a complex challenge: balancing the needs of the agro-industrial sector with the rights of patients and the investments made in medical cannabis. The industry stands at a crossroads, and its future depends on how the government manages to implement regulations that encourage growth without abandoning the progress already made in the country.