Canadian CBD Producer Has Lowered The Price of CBD Oil by 96.34%!
In a move that threatens to destabilize Canadian cannabis markets and ripple a bomb aftershock of change throughout the global cannabis market, InstaDose Pharma (IDP) has dropped the price of CBD oil by almost 100%.
Just before the New Year, Canadian pharmaceutical company, InstaDose Pharma (IDP) announced a massive shipment of CBD oil to Canada. Having kept surprisingly quiet after legalization in October, the company has now decided to let the world know what they’ve been up to. And good news for CBD users, the decrease in cost from market saturation is finally here.
The cost of the product is proposed to be down by 96.34%. This raises all kinds of concerns and questions about the new product, which is being shipped in from Colombia and the Democratic Republic of the Congo (DRC). These countries are notorious in the drug world, and have a long history of larger powers coming in to exploit innocent and vulnerable workers (Heart of Darkness anyone…?). Is the same happening now? Or should we celebrate Canada’s leading role in cannabis medication?
IDP Ready To Release Two Million Liters of CBD Oil To Market
Let’s start with the facts. IDP has announced that 2 million liters of CBD oil will hit the market this year, with its starting shipping coming in at 90,000 liters. While many Canadian companies were looking inwards, or towards our Southern neighbours, IDP decided to turn to the rest of the globe. In doing so, they struck up deals with co-operatives and communities of farmers in Colombia and DRC.
By comparison, Canopy – the largest licensed producer and well known across the country – maintains around 40 hectares of land for cannabis production. IDP, on the other hand brings in cannabis from 200,000 farmers on more than 100,000 hectares of land in the DRC and 400 hectares of land in Colombia. IDP hopes to increase production land by 150,000 hectares in DRC following the release of their product.
Grant F. Sanders, CEO of IDP, whom has invested $76 million USD into the operation, explained his decision to use more than just Colombia in their production: “We quickly realized that growing there was not the smartest option and the production capacity and price that we could achieve in the DRC was 99% more beneficial, to both us and the end user.” We’ll unpack this statement in a minute.
Meanwhile, the press release also explained that their moves would dramatically affect the market price of CBD, to the benefit of consumers. Currently, CBD oil costs around $2800/liter within the Canadian market. Sanders describes, however, that “international forces outside the Canadian bubble are able to produce 99.7% purity level at $102.50 USD per litre.” That’s a big slice in price.
Why did they keep the news quiet? To work on production and logistics without public scrutiny. “We’ve kept our operations in the shadows due to concern about the reaction of this news with licensed producers and the public investment sector,” said Sanders. In response to those reactions, Sanders went on to say, “What’s about to happen to the market isn’t a result of what we’re doing, it’s the result of what they’re not. You can’t blame Usain Bolt for being the fastest runner in the world just because you’re too slow.”
Growing in the DRC and Colombia
Remember that statement above? Well those issues that Sanders hinted at – about growing cannabis in Colombia – is exactly the concern that arises from this.
While Canadian companies may be rightfully concerned about their product being devalued in the market – companies that have already invested millions and small time artisanal growers who struggle to stay afloat – the other concerns arise with treatment of workers in these countries. The fact is, there will always be people who prefer Canadian products, and particularly artisanal products. So there’ll be a niche market created.
But, Colombia has a long and fraught history with drug gang wars. Growing there is not the ‘smartest’ option then? Or not the safest? Well, it does seem that things are changing. With the legalization of medical cannabis for both export and domestic use in Colombia just two years ago, the regulation of the crop and the removal of its profits from drug gangs seems to be on the horizon. That is, if farmers can gain licenses and find buyers.
As recently as May 2018, small-time farmers, in Colombia, destroyed their own cannabis crops (a requirement if they want to find legal work in the industry) in the hopes of attaining positions within larger corporations. If this practice continues with the lure of buyers such as IDP, it could reignite turf and gang dealings to fill in the supply gap. Could the move by IDP into the country help prevent this by offering legal production sites and therefore more jobs? Maybe, assuming their farms are non-exploitative.
IDP isn’t the only Canadian company investing in Colombia. As such, safety measures have been put into place. CBC explains: “Companies that receive cannabis cultivation licences in Colombia must allocate at least 10 per cent of their production to small farmers, Indigenous people and other groups who have been particularly hard-hit by the country’s drug violence.”
The article goes on to say: “Investments in legal cannabis are expected to provide employment opportunities for people in the hardscrabble region who previously had few options other than cultivating coca or working for armed groups.” It’s a hopeful thought.
Meanwhile, in DRC, farmers and individuals are looking at the boom in Congolese cannabis as a cash crop that may save them from the mines and feed their families. Small time farmers are able to grow enough product to pay their children’s ways through school, feed the entire family 2-3 times a day (as opposed to once), and even have a little left over for their own enjoyment.
Will this bold move by IDP force Canadian companies to invest globally? What will be the consequences for Canadian grow operations? Are the farmers being exploited in Colombia and the DRC? So many questions and few answers in what has been an uber secretive operation. Time will tell.