Clearly Cannabis - Andres Luques Undersecretary of Agriculture Ecuador
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Clearly Cannabis – Andres Luques Undersecretary of Agriculture Ecuador

Happy Friday, everybody. My name is Marguerite Arnold and welcome to this week’s edition of Clearly Cannabis. Our hosts tonight are me, Marguerite Arnold, I’m a journalist and cannabis entrepreneur, and Martin Weller and Patrick Doherty. This is being brought to you by several websites as well. We hope that you will check out both CannaList.eu and CannaClear.de. We also have a YouTube channel, Clearly Cannabis, that this will be recorded and posted on, and we will be doing a transcript that will be posted on the website of CannaList.eu.

The format of the program is going to be an hour. We will encourage all of you who are part of the conversation to have your questions, as well. We’re going to start this off with a brief introduction of tonight’s guest, who are we are very honored to have on with us. Andres Luques is the undersecretary of agriculture for the country of Ecuador. Tonight, we will be focusing on some of the overall issues and procedures and sort of uber-questions that he is facing as he is taking his country into a medical cannabis world. So first of all, Andre, welcome to Clearly Cannabis. How are you tonight?

Hi, thank you nice to meet all of you. Can I share a screen, please?

So as we set this up, I think that you wanted to talk a little bit about just giving people background of your country of Ecuador and where it is and where it sits and its many benefits.

Well, here you see South America, and then I’m going to zoom in to Ecuador. Here is already Ecuador. We have the Galapagos islands over here; if you didn’t know they belong to Ecuador, now you do. Here you have the country, and as you see, it’s crossed by the Andes region. These are very high mountains. We have one that is above 6000 meters. Quito, for example, the capital here is at 2 800 meters. I’m located right now here in my local city Guayaquil, which is the main port. Here you see, we have the coast. When you go to the supermarket and buy bananas from Ecuador, they are mostly grown around here, okay? Here you have the Amazon region. This is where the first expedition to the Amazon originated. Francisco Pizzaro left from here, from Quito, and went down, and he discovered the Amazon River back then. So, although we don’t have the Amazon River, we call it the Amazon region. All these rivers end in the Amazon at some point.

We are mainly agricultural land. Agriculture, primarily cocoa, was the main export when the republic was founded about 1824. It was the money from these cocoa exports, we were the leading exporter until 1920, and all this money funded the local banks. Then cocoa had some problems; we’re still a cocoa country; it’s one of the main crops, but then in about the 50’s we developed the banana industry. Later on, the shrimp industry was also developed in Ecuador. In the highlands, the entrepreneurs from Quito’s highlands were the pioneers in the flower business, roses mainly. So, now they have been having problems because we dollarized economy at about the year 2000 as we had hyperinflation. That forced us, 20 years ago, to use a dollar as our primary currency. We don’t have devaluations right now, but we are now a more expensive country to produce than Colombia, Peru, where they have local coins, and they devaluate, and so they are more competitive sometimes.

Can I ask a question about your port infrastructure? Since we’re looking at your map, where are your export ports, and what is the infrastructure?

This is the main export city from Ecuador, and here now, technology is marvelous, so I can show you where the port is. It’s here around in the south of the city. I will have to look for it.  You have some private ports, and you also have the main exportation port. I don’t find the cranes right now, but it’s somewhere around here, and here inside this part, you also have some private ports. As you see some history here, it’s a port at a river, like Hamburg, for example, or Bremen, because back then, you have to fight off pirates. If you go around here, you still see canons from back then, and usually, all the docks were here just on the street, but now, because the world has changed, you have the primary port here, this is where the port is. Then you have a smaller port, and this is where all the crops agricultural commodities go out. Then you have a smaller port in Manta, which is more for fish. This is where the fishing industry is mainly. Then you have the Port of Esmeraldas, which is where we ship the oil. So, the oil, mostly in Ecuador we are an oil-producing country, sadly. I don’t think it has helped us very much, but here it crosses from this region through pipelines through Esmeraldas, and there this is where we export it.  Here at the ministry of agriculture with the minister, we have been since 2018 looking for other options. We have seen some changes in demand, such as with sugarcane. I think we all agree that people worldwide are eating less sugar, which has dropped the demand. It’s already causing problems in the sugar industry. As I explained before, the flower entrepreneurs, the flower businesses, have been hit hard lately. With COVID, with the coronavirus, they didn’t have any exports because everybody stopped buying flowers, people wanted to buy food. So, you are kind of looking at a way of repurposing, in some ways, existing infrastructure.

What we were looking for is at other options to diversify our agricultural products. We found hemp, mainly that’s what we’ll hear. But we have others. For example, we are betting big on avocados for the next years. We are small, but we think we can get, in the next 10-15 years, maybe 50 000 hectares of avocados, and that’s also a great choice for us. We have other fruits from this region that are exciting niche markets that we are promoting.

So, let’s jump into the inevitable. Can you give us an overview of the cannabis market that Ecuador is now developing? Is it low THC hemp, has it got THC, what is it exactly that you’re looking at now?

Sorry, this (PowerPoint presentation) is Spanish. I didn’t have time to translate, but I’m going to talk it over. On the 21st of December (last year), the national assembly, that is our legislative branch, de-penalized (decriminalized) cannabis with <1% THC. It was de-penalized on the 24th of December, but it does not officially go into effect until 180 days from then. So around six months, it will be already decriminalized, and from the 21st of January from June, the ministry of agriculture has 120 days to enact the regulation. So we are still on time. Of course, we did not wait until the 21st of June to start working.

We already have a very advanced and almost final draft. We want to publish it before, but right now we are at a stage where we are explaining to other institutions, for example, ARCSA, which is like the national FDA, about what they have to regulate so that we develop an internal market and we don’t have the failures that other countries in South America did; that they de-penalized, but they didn’t develop the internal market.  For example, in Colombia, they didn’t want to export biomass because they said, “if we are not allowed to export biomass, the industry will be forced to develop here.” But that didn’t happen. So, we are very aware that we are agricultural land and that other countries are more specialized in the industry. Of course, we want to get into it, but we are not going to shoot ourselves in the foot because of our romantic idea of let’s develop everything. We think the income of the export of the biomass should be the one that is also going to finance the industry. We also clearly identified that de-penalizing <1% opens two roads. One is this year. CBD or CBG, which are very similar to THC genetics. So this (picture in the slide) was in Oregon, and when I got here, I thought, “What is this? This is marijuana”. But no, I had to smoke it to believe them, but then we realized (it was not marijuana). So if this looks very similar, then we have to regulate it. Because, if hemp were everything like this on the right (picture of hemp plants in the slide), then maybe a regulation wouldn’t be needed. No, it’s very identifiable the difference between these and any marijuana plant. So, we identified two big options.

This one (hemp), which is more for the coast, more expensive, more for example, for the people that are in sugar cane right now and that need different options, mainly for fibers and so on. This is more for China. There are Chinese companies interested in coming to Ecuador and developing this crop. The sugar cane industries are also looking into it, so maybe they will invest in the industry and plant some hectares of this. This is what we are betting on in the long term. We think that this is the crop that is going to be big in Ecuador in the maybe next 10 to 15 years. This is one that we believe, once we have the right genetics, and we have identified them, that the national banks and public banks in Ecuador can put loans to develop it.

On the other hand, on the left (picture of CBD/CBG cannabis plant), the CBD varieties. In the beginning, we were like a year ago very enthusiastic about the CBD market. But as time has passed, we have more of these meetings and so on about the market. We have seen that the market is not what all these projections that you hear and that you see in cannabis magazines, or when companies say, “yeah, it’s going to be this big in the next five years thanks to their experience,” of course. But we have identified that most people mix the medicinal CBD and the THC, so that’s confusing. We also see that there’s a lot of novelty market, which is very short-term. For example, when I was in Oregon, we saw a bar of soap for 15 dollars, that maybe does quite the same as the one that just costs one. So, we are wondering about what the long-term market of CBD is.

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Can I just quickly interrupt you for one second? You’re showing outdoor crops. Are you also considering doing indoor crops as well for the GMP export market?

Yes, for the indoor, we see CBD can be done both outdoors and indoors. The thing is, we already have an installed capacity because we have the flower business sector. So, indoors already exists. The advantage is that people don’t have to make that significant investment; they just have to get access to genetics, to the seeds, and also learn how to do it. But I think we can lower the know-how curve because we don’t have seasons. We have just a rainy season and dry season. But we also have the disadvantage that here in Ecuador it’s very boring because you have the whole year round, just 12 hours light. So we will have to see the reaction of the flowering; if we’re going to need outdoor lights or indoor lights, external lights and so on. So clearly, our first stage is going to be developing genetics. We are opening the country to allow imports of genetics from Colombia, from Uruguay, from the US, from Canada, from Europe, so that we can make it faster. We also have our national institute of agricultural research, which has an agreement with their partner from India. India is the origin of the genetics of cannabis. So we are going to have an interchange of genetics from them that will allow us to develop genetics as soon as possible.

So that’s fascinating. I’m hoping we can sort of work around your presentation because I want to make this a little bit interactive, but clearly, you have plans. How important will the UN resolution be, that will presumably be voted on by the WHO this December, to drive your decisions and shape the program you’re developing for the country?

For our part, we are <1% THC, so we are following closely. It’s mostly because of the market. So, we see the European market that’s not very secure. One thing that I forgot to mention, we have a law since 2015, that already allows medicinal projects of marijuana, but that’s at the health ministry and the interior ministry. But they never regulated it. So now that we are regulating, we also have meetings with them to start their regulations so that they will be easier to match. But we also see this as an opportunity because we have seen that this does have medicinal value. We are even thinking for the country, for the people that are willing to use it, and that’s why we also want to develop the internal market and if the export market develops then great too. To be honest, in the CBD market, we are making a regulation so that people can invest in it. As a state, we don’t want to be a barrier. Still, when we are having talks, we also say, “this is not the fantasy” because everybody wants to hear about this (cannabis) presentation, but, as I explained before, we are also betting big on avocados. But nobody is asking about the avocados. So, we are also very trying to make people understand that this is not easy money. So, you have to invest in it. You have to do due diligence, try to find a market, what the market expects, and then try to get into it when you have done that. Many people say here, “hey, I have some land. I don’t know what to do about it.” People that have never been on agriculture. So we say, “look if you’re not doing the right work, the due diligence, to travel abroad and go to the… now because of COVID, it’s not possible, but as soon as it’s possible… go to the expositions, and there are schedules in the US or Europe about hemp. First, go to every one of those before entering this market. Because here, this is the graph that we have. Here’s how CBD has gone down. This is actually from January of this year. So, our production here in the hemp market is very easy. We also talked to our partners in Uruguay, and they told us after five years, they’re going to do their first export to Switzerland. But it’s just 14 tons, and if you have like a kg for a plant outdoors, with 5 000 plants per hectares, you have five tons per hectare in four months, and you’re telling me that your first export is going to be 14 tons, so that’s like the production of three hectares in just one planting. So, the market is not as big as we expected. As I showed you the map, we are land with soils of volcanic origin, and we do have the problem of heavy metals in the soil, not because of contamination, just because it’s natural in our soils. We also are aware that there are some restrictions on heavy metals.

So, those are all the things that we are telling people. For example, in Colombia, if you want to have a license, you need a soil analysis to get the license. We don’t want to do that because it cuts innovation. You can hire a Ph.D. in soil nutrition, soil management, you can do hydroponics. So, we are not going to put the decision of one guy to tell you, “hey, this soil is good for growing or not.” We are not putting it as a requisite, but we are communicating very hard that people have to know precisely what is going to be demanded on these quality things before they get into the market.

How would you categorize the foreign investment climate in Ecuador? You’re trying to grow the internal market as much as you are the export market, but when you mention avocados, you’re looking at an international export market, right?

Yes, that’s true.

How would the average investor, somebody who is maybe a family office here in Europe, how would you categorize the agricultural vertical right now in Ecuador? Do you have a standard, or average ROI on investments, especially for foreign investors? Is there such a thing? How are the metrics created?

If you have a new investment, you get a 10-year exemption of certain taxes. So, we do have that. We are looking mainly for exports at all agricultural levels. But for this one, we also know that we cannot just rely on the export market, we have to develop an internal market. People that fought for the de-penalization of this here in the country are expecting this as a medicine, so we have to be aware of that. We are already coordinating with other government agencies. On this slide, it says Ecuador is looking for a productive regulation and not a speculative one. This is mainly because most people say we are already late for this and we don’t think we are late. What we are late for is, for example, in Colombia, there’s the case of one lady that had a rose flower production plantation, let’s say it was about two hectares or something. So, she got her license, and then she sold a license with land for 80 million dollars. For that, we are late for speculation. We don’t want the license to be transferable so, if you are trying to do just this, getting the license, and then selling the company, you are not going to be able to transfer the license. We want people to plant. We want people to export. We want people to give jobs. I mean, if some people are expecting to get a license to sell the company, provide some paper value to a company, that’s not going to happen with us.

So, you’re taking steps now to prevent speculation in licensing and land for this market, right?

Exactly. We want people to work, export, and get jobs. That’s our main goal here.

So, let me discuss another question, though, and then I’ll hand it back over to you. What are you looking for right now? Are you looking for exporters? Are you looking for distributors in your sales markets or a specific area of the world? How do people, who are listening, get in touch with you to maybe say, “how can I help?” because I think that’s part of the purpose of having you on today.

Okay, first of all, as I said before, this is going to take some time. We have to develop and adapt genetics. Especially our interest as a state is to develop the industrial hemp, the one that is for fabrics, textiles, bio construction, and so on. The other one (CBD/CBG) we see it as very risky, very not secure. So, as I told you before, we are trying to draw a regulation that people can get into it, not to be a barrier. Within the actual barriers, here is access to genetics and access to the market. So, it’s on both ends. We don’t want the license to be a barrier mainly.  So, if there are companies in Europe or Canada or the US that want to invest here on the growing side or the production side, we are very interested, of course.

I know there are many people here (interested in CBD/CBG), and as you told me when we had our first chat, there’s a city in Germany that has a plan for CBD and so on. So, we as a state, we are more betting in the long term on the industrial hemp and also grain for oil, and we know the cake, that’s how we call when you extract the oil from the seeds, it’s very good for animal feed.  So, in the country here, we have a problem on the animal feed industry because we have very high prices of corn and we want to get people out of corn and start growing hemp for seeds, once we have developed the genetics for the country

I know that you have more of your presentation, which of course, I would love to give you ample opportunity to finish, but I also know that people are sitting on the call. Does anybody have any questions?

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If you have a question, just put it in the chat section, and then we’ll get to it that way.

Good idea. I think this presentation is long, and it’s I think, for the people who are hearing (on this call), they are not here, for example, for an explanation that you will have longer cycles of production on the highlands days to harvest. Still, with more CBD content or THC because at higher altitudes, you have lower temperatures, which makes a concentration of cannabinoids stronger. On the coast, you will have shorter cycles but also lower contents. So, I’m done with the presentation now, and if you want to start answering questions, I’m ready for that okay.

So, let’s open this up. There is a question from Nico Solomon “What is the size of the investment Ecuador is looking for?

Okay, we have put minimums on that one thing. I have to be clear about this. What we have now is a draft, and everything is a draft until it’s being signed. So, we are thinking about a two-hectare minimum, but we want to give you five years to get to that area, so if it can be progressive. So, two hectares minimum, but you have five years to get to the two hectares. If it’s a great business, I think you’re going to ask for more land for more licenses soon, but if you haven’t developed that, it just means it wasn’t that great business at all.

Is there a monetary commitment as well, an amount?

No, if you’re a foreigner, you will have to buy the land and do the infrastructure. As I told you before, here in the country, we have a lot of people in the flower sector that already has the infrastructure, so there are more about getting access to the seeds, making adjustments, learning how to grow it. They already have experience with similar crops. Then access to the market.

And are you going to limit the number of licenses?

No, we don’t want to limit licensing, we want the market to be the limit actually, but that’s why we are communicating very hard to people to do the due diligence before getting into this market.

And what is the time frame from applying for a license and going through the process, how long does that typically take?

As I told you, we don’t want to be a barrier to this. We have an advantage that everything from the seed until the biomass or the first extraction of full-spectrum oil, so, what is a raw material, is inside one ministry. In other countries to get the license, you have to get through three ministries and two different institutions. So here our Ministry of Agriculture has the chain under control down to our local “FDA” is it is needed for the internal market mainly.  For the export sector, it’s going to be principally about the international requirements.

Donald has a question.

Oh yeah hi my name is Donald, I’m an international consultant. I have some questions for the undersecretary. Are the tax extensions for foreign investments sustainable, even though you have new presidential elections pretty close from now?  As we all know, most of the regulations in Ecuador are very flexible related to new governments in a short time. The other question is, based on experience, Ecuador takes too long to allow seed imports into Ecuador. Probably, if you want to import seed or a new variety of any given seed, it takes too long to be approved by Agrícoli and sometimes by the national institute of agriculture research. So, this might be a barrier to starting up a new industry. So, those are my two questions. I’ll have some other questions since we’re working with a group in Miami to think about a vertically integrated company here in Ecuador.

Yes, about the seeds, as you know, we have a seed law, that we haven’t touched. This is a de-penalized crop, and we are treating it as such. What Donald is talking about, if you want to import seeds here to the country, you have to do an adaptability test that takes one year. It’s done by INIAP (Instituto Nacional de Investigaciones Agropecuarias), but that’s only when you want to be in the seed business. This is very important to know. If you want to sell seeds, we make sure that what you’re telling about the seed is true, like how much density, how much production per hectare, etc. Then you can sell seeds. Of course, here in this market, you are going to be limited to the number of licensed companies that have access that will be allowed to buy these seeds. But, for example, if Donald wants to do a project and he gets a license for production of 10 hectares, (Provided) he’s not going to sell seeds, he can ask for an authorization to import the seeds, just for the 10 hectares. He will have to get give us information about the seeds, and for this case, because it’s hemp, he can either transform it and do the oils here or export the biomass. What he won’t be allowed to do is to sell the seeds. For that, he will have to get through the adaptability test. So, if you want to get into seeds, you have to wait a year. If you’re going to plant, to export, or to keep the added-value industry, then we can give the authorization for the seeds. About the planned election, yeah, well, I think Ecuador is now in a position where we have to get investment, so I don’t think, if any president wins, I don’t think any president will get that down actually.

I think Jorge had a question.

Yeah, the question about the tax exemption is because that was an initiative too by the ministry of commerce and industries here in Ecuador. It was supposed to end this year. So, we don’t know what’s going to happen in the international investment industry. What is going to happen next year? If that is going to be renewed, because actually, we don’t know if that’s going to be renewed for investment in specific areas in Ecuador, such as the depressed economic areas, such as most of the regions, which are very attractive for the hemp industry, which (means) it is not 10, it’s 20 years if you invest in different areas. We had an earthquake here in Ecuador. So, it will be renewed because the law says, and the regulation of that tax exemption will be extended until this year. So, we don’t know. We would like to know if the government of Ecuador is going to be renewing that pretty soon, or it’s going to be that the initiative is going to be taken by the next government, which doesn’t know exactly who’s going to win. Nobody knows. The other is, okay, based on what you said that, for example, if we have a vertically integrated company based on any given state in the US. We have a market or any given place in Europe, and we want to import our seed for our production how long does it take. A year? Or it’s going to be less time to import our seed, or we have to wait a year to have the adaptability test?

No, I already explained it’s faster. You don’t have to go through the adaptability test. About the tax exemption, the ministry of commerce already signed a document, where he said that the hemp industry is going to get that tax exemption. If you look at the president’s show, we are not at elections right now, but if you see the people that are interested in running for the presidency, they all talk about hemp right now. So, I don’t think they’re going to get down of that frankly.

I think Jorge had a question. Yeah, his question was, have you begun working with the Ecuadorian customs to set regulatory documentation?

Yes, as I explained before, we, as a ministry of agriculture, have until the 19th of October to get the regulation on our side. Still, we already are in talks with all other governmental agencies needed and, of course, customs are included. Also, the new vice president was a former customs director, and this process of regulation was always worked with the vice presidency or presidency, so we have full support in that.

Does anybody else have any other questions?

I’ve got a general question. I understand very clearly where Ecuador is going to regarding hemp production and CBD, so cannabis <1%. Are there any plans to be looking at THC >1% like for medicinal purposes, or is that not in view right now really as any big priority?

Yes, I told it at the beginning, but I can repeat it. Since 2015, there is a legal framework for THC licensing for medical purposes. That’s on the health ministry and interior security ministry, but now that we are doing it, they also are starting to do it. We are giving them support because of that regulation. We are going to be involved on the side of the seed. So, we are involved in that part of the chain is in the THC market. It’s for medicinal purposes, so it’s going to be for sure more restricted, and it will (require) prescriptions and so on. You know, also health ministers are more about scientific data and so on before they get into anything. So yeah, we are not on the recreational side like, for example, Uruguay, but we do have the legal framework for THC.

Are you setting up any trials as you go forward or any programs that could work easily with trials, maybe as an interlocker between doctors and producers? Has that been raised at all?

Yes, and now as the weeks pass, there are more of those meetings. What we already have is some transfer of seeds agreements from our national agricultural research center, and they are going to start doing trials with seeds from the US for CBD and some other from hemp from China soon. So, one thing is, most people ask if we are going to allow an exemption so that illegal seeds in the market are regulated as Colombia did. I think there is a big difference between Colombian and Ecuador. We have never been a drug production country, so we never had that problem of illegal plantations. Of course, some people grow at home and so on, but if they want to register the seeds, they have to go through the normal process with a law that already exists, and they will have to get through the adaptability tests.

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So, I have a sort of out-of-box question for you now. Did you ever think that you would be setting up a cannabis program at any part of your government job?

Never.

What did that change for you?

That’s what all my friends from college say, “Hey, did you ever believe that you were going to work on this? Na.”

So, you were voted least likely to start a cannabis program in school. What has surprised you the most in this process, about the whole conversation?

Well, the thing is you have to have a lot of meetings like this, with people from other countries to try, this is like a big puzzle. So, from everyone we hear, we get, we write certain things down, and it’s also a world where everything, every week, you have news about what’s happening. So, I think we have to stop learning at some moment and say, “Hey, this is everything. We have had a lot of meetings”. But as a government, there’s a moment where you have to say, “Hey, we have listened to a lot of people, but now we have to make decisions.” And we are at that stage now. We also have people call me, people write to me, and I always try to answer. But I still also try to get new info, especially about the size of the market, because Ecuador has had the experience. Like, for example, the government, the state, we had experience with the shrimp market, which was a huge boom. We developed it. So, for example, when you started back in the 80s, a shrimp farm, for every dollar you invested, you got a hundred dollars in just five months. So, it was like a huge boom. So, 20 years ago, there was the freshwater lobster project, and the state was betting this is going to be the next shrimp industry, and they started to give loans and loans, but it never developed. So, we don’t want those things to happen again. We don’t think this is for public national banks to give any loans. Shortly, maybe three or four years, when there are industrial hemp seeds already developed, we will see that there are players who want to invest. On the industry side, we want to lower the risk, and we think it will be a good strategy to give loans from the public banks to develop it. But first of all, we have to get the genetics done. We have to get companies that invest on the industrial side, and then we can give loans to develop the crop. On the CBD side, I think it will be a huge mistake to get a national bank system in there. That’s for private equity investment, risk investment, and people have to work, they have to invest, losing money and then maybe win at the end. But you see, for example, in Uruguay, they have already been five years with this, and some crops on harvest just are stored at warehouses. In Colombia, some companies get out of the business every month. Also, in Oregon or some states in the US, the harvest from 2009 still is locked up. So, if you make an excel sheet and you get rich in excel, it doesn’t mean you’re going to get rich in real life. And a very nice price is nothing if you don’t have an industry that is going to buy it from you. Or, if you get into the industry if there’s no consumption or the market in Europe is still problematic with the import side. So, people have to be aware of this and know where to put their money.

On the industrial hemp side, you’re working on genetics?

We are not working yet, but we know that the homework is working on it. As I told you, we have just 12 hours of sunlight. We have cloudy regions that are not productive on sugarcane because sugarcane eats very much light because it’s a C4 crop, a C4 photosynthesis crop. Cannabis is not, but we know we had a hundred years of knowledge lost in cannabis. We know what the genetics are, we like that it needs 25% of the water of corn. But we are also aware that it doesn’t need that much water, but it also doesn’t like that much water. So, you have to have proper irrigation and drainage systems and suitable soils for that. So, everything is getting the right genetics, getting 12/12 genetics. We don’t want to be flowering depending on having more or less sunlight. We are not in that position, but to be honest, here inside the Ministry of Agriculture, we bet that in10-15 years this is going to be a great income source for the country. To be honest, the staff of the ministry, if you look at the minister, vice ministers, undersecretaries, we are all farmers. We have been in the farming business. But none of us is trying to get out and trying to plant this. We see it as very risky. But we don’t want to be a parent and tell other people not to invest in it. Just we are giving the right advice.

Hi, how are you? My name is Jorge Duya. It’s a pleasure to speak to you. One of the reasons that I wanted to participate in here (this call) is to see exactly what those plans were because I’m pretty sure that the EU will also be open to buying Ecuadorian industrial hemp in the future when your crops are ready.  We have, like I said, successfully just entered our first three containers, and we continue to do more, and I was wondering if you had plans in the future to be able to export your biomass?

Yes, which country are you in Jorge?

I’m in the United States. I’m actually in Miami. I’m very in love with Ecuador.

But you are exporting from the US to Europe?

Yes sir.

We are leaving biomass, as I explained at the beginning. We don’t want to do what Colombia did. They didn’t allow to export biomass. We want to export biomass, but we also have to be aware that the THC limit in Europe is 0.2%.

Absolutely.

As I tell everyone, first is genetics. Try to get the THC content low. That’s why when we want to develop the internal market. Furthermore, that’s why we de-penalized <1% because if you’re at .3% or .4% and you won’t be able to export the biomass. Then you need an internal market or an industry to get out the THC and export it or have a domestic market so that it can like escape both ways so that you cannot lose the opportunity to sell the crop if you get >0.3%.

That is the tough part, but I think you guys will be able to master that. I know that Ecuadorians are smart and industrious, and you guys will be able to get there.

Yes, for sure, I also bet on it. I mean, look on the production side. We don’t have any worries. We have, as I told you, developed the banana industry, the shrimp industry, the flower industry, and we are still the top exporters in both bananas and shrimp. I think the flower business sector is very professionalized on how to manage crops, and growing flowers is top of the art management. I mean, they manage humidity levels; they can handle everything. Those are not the problems. The problem is, is there a real market in the long term for CBD? Now CBD has issues. Now it’s CBG. So, if it’s going to be like that then on the production side, we don’t see any problems. Of course, people have to get access to genetics, and that’s going to take some time, but I bet you Ecuadorian flower growers are going to learn very fast. The real question is, are they going to be able to sell it. That what you’re telling me is excellent news. If you can leave your name and phone on the chat or send me PM, as you wish, it would be great to have a conversation with you.

We can connect you with no problem.

Well, on that note, I think that is a perfect time to wrap this up. Andres Luques, thank you so much for your time, and you’re an impressive presentation today. We are going to post this on YouTube as well as on the CannaList.eu website. The next Clearly Cannabis Zoom call is going to be at 19:00 on the 13th of August. We are going to have an exciting entrepreneur in the European, actually Swiss, CBD space. So, perhaps Andre, you might like to come back in two weeks and ask some questions because Francis Scanlon has been on the front end of this. The regulatory climate here in the EU is certainly exciting and has led to some choppy waters. I think Francis is a fascinating person because he’s managed to survive a lot of that. Having questions and an interplay between the industry members and people like yourself, Andre, who are making big decisions about countries, is what we created Clearly Cannabis to be about in the first place. So, thank you, everybody, for being here as a guest and participant, and once again, sir, thank you very much, Andre Lucas, Undersecretary of Agriculture for Ecuador for being with us here tonight on Clearly Cannabis.

Thanks to all, thanks, Margaret, for setting this up, and I hope you come and invest in Ecuador or buy hemp from Ecuador.

Thank you very much guys, bye-bye.

Thank you. Bye, take it easy.

Thank you, bye-bye, take care.

Clearly Cannabis – Andres Luques Undersecretary of Agriculture Ecuador

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