New Licences Issued In Costa Rica's Hemp Sector

The Ministry of Agriculture and Livestock (MAG) has issued 57 licenses for the cultivation and production of hemp derivatives. The first license was granted on November 8, 2022 and the last one on September 3, 2024. According to MAG data, most licenses have been issued in San José and Guanacaste.

Costa Rica, well known for its slower pace of life, often affectionately known as “Tico Time”, has actually moved quite quickly in progressing on its path to legalize hemp and cannabis.

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Costa Rica’s hemp sector has been steadily growing following the approval of a new law regulating both hemp and medicinal cannabis. The “Cannabis Law for Medicinal and Therapeutic Use and Hemp for Food and Industrial Use” was passed to promote economic opportunities, including the cultivation and commercialization of hemp for industrial purposes. The law allows the issuance of licenses for hemp cultivation, processing and commercialization, which are granted by the Ministry of Agriculture for up to 6 years.

However, the sector is still navigating challenges, particularly with the regulatory framework. While more than ten companies have shown interest in investing, the licensing process has been slow and somewhat complex due to issues like seed importation and regulatory ambiguities. Only a few hemp licenses have been granted so far, with more expected as the government refines its procedures.

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Investors see significant potential in Costa Rica’s climate, which is ideal for hemp cultivation and anticipate further liberalization of the market, including possible recreational cannabis legislation in the future.

UNA was the first educational institution to obtain such a license in August 2023. From that point on, MAG informed that the university would focus on research, aiming to study the development and properties of hemp components. Among other goals, the research sought to validate techniques to modulate physiological processes in hemp cultivation, based on two varieties from Canada.

“Right now, we are just starting. What is clear is that as state, business, and academic actors collaborate more effectively, we will be able to catalyze the process and move much faster,” said Jorge Herrera, Vice Rector of Research at UNA.

“What I believe is that we have to walk before we run. We need to build testing and processing infrastructure so that various actors and companies can integrate into the system and produce according to standards and requirements,” he said.

Thompson also noted that current hemp production in the country is very low. These small projects, covering two or three hectares, are primarily focused on oil production or CBD extraction for medicinal purposes.

The legalization of cannabis and hemp in Costa Rica can be viewed through three distinct branches which are progressing concurrently, although on different timelines. The first is the legalization and regulation of hemp. The second is the legalization and regulation of medical cannabis. The third is the legalization and regulation of cannabis for recreational purposes.

Canadian license holders would be well advised to track the progress of Costa Rica’s nascent hemp and cannabis industry as it is already clear that the law will allow for the import and export of hemp and cannabis, thus giving rise to business opportunities for Canadian license holders in Central America. It also means potential competition for Canadian license holders and keeping an eye on what the competition is doing is never a bad idea.

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