Costa Rica: Hemp Production

In recent months, hemp production has been a subject of analysis in our country. There are many opportunities that the project could generate, for example: the insertion in global value chains or the economic benefits that could provide to a series of economies of scale. For these reasons the interest in the subject has been aroused and the following initiatives have been developed:

Bill No. 21.388

The text published on September 17, 2020 for Bill 21,388 - Law on the Production of Cannabis and Hemp for Medicinal Purposes implies a progressive and innovative opening to the commercial opportunities associated with the production and industrialization of cannabis, in its non-psychoactive form (hemp) and in its psychoactive form for medicinal or therapeutic purposes.

The text develops the following main aspects:

  • - All activities of agriculture, production, industrialization and commercialization of non-psychoactive cannabis or hemp, its products or by-products are authorized. These are exempted from any prior or additional formal authorization, reducing their regulation to a subsequent registry and periodic inspections by the competent authorities.
  • - The use of psychoactive cannabis is regulated through formal authorizations/enabling titles in three different categories: i. License for agriculture, production and related activities, in charge of the Ministry of Agriculture and Livestock; ii. License for the industrialization or development of medicines, cosmetics, essential oils and other products for medical or therapeutic use, in charge of the Ministry of Health; and iii. Permit for non-profit scientific research or academic activities, in charge of the Ministry of Health.
  • - Domestic production for self-consumption for medical and therapeutic purposes is regulated through the requirement of a certification of the patient's condition, according to the specifications of the Ministry of Health.
  • - A specific tax is appointed for the exploitation of cannabis, both psychoactive cannabis for medical or therapeutic use and hemp for industrial purposes, quantified at 5% of net profits.
  • - The issuance of the Bylaws is ordered within a period of six months, to regulate the fees for the enabling titles (licenses and permits), the traceability system by inter-institutional coordination of the Ministry of Health, the Ministry of Agriculture and Livestock and the Costa Rican Institute on Drugs, and the regulation of the Registries of producers and industries.
  • - The text includes a section on crimes, infractions and administrative sanctions, confiscations, as well as a chapter on incentives for producer organizations and small businesses.

Government Hemp Project

Since last year, Descubre program of the Ministry of Foreign Trade has been investigating the commercial benefits of the development of hemp industry in the country:

  • - The project is in the elaboration process, it is being developed through an institutional commission in which participated the Ministries of Public Security, Health, Foreign Trade and Agriculture; also, the Foreign Trade Promoter; which has the coordination of the project.
  • - The main objective is to provide opportunities to producers, investors and exporters, interested in the exploitation of this agricultural product.
  • - The project does not have an established publication date but a commitment to advance weekly, with the aim of having a hemp production authorization in the country.

The Arias' team is constantly monitoring all actions and possible legal implications. We will share further useful information concerning this matter in the coming weeks.

Valeria Grant

Associate

valeria.grant@ariaslaw.com

Jossué Chacón

Paralegal

Jossue.chacon@ariaslaw.com