Julian Tobar is the founder and organizer of Expo Cannabiz, a cannabis expo and Business conference with international speakers to be held in Cartagena May 9th-11th
CCI: How did you get involved in this industry, when did it all begin?
JT: It all started three years ago, when my cousin and business partner in Etnothecarium lived with me for six months in the US, where I own an insurance agency. He Studied and help me, at that time he told me about the law was passing already and he had two partners in Ibagué looking for financing. I heard him to talk so much about the project and financial projections, I thought it was a good business idea. I started to go to conventions and events, beginning with MJBiz in Las Vegas, I took a cannabis crash course that’s where we got the idea for the one in Cartagena on May 9th for people who want to learn, the same day we have a Cannabis investment summit for companies looking for funding. MJBiz was a very interesting experience for me, that’s were the idea was born, I knew about Expomedeweed, and other events like Cannaciencia that started last year, but I really wanted to have an event like MjBiz in Colombia B2B. As time passed, I start given it some thought and finally I came to the conclusion it was a great opportunity. I went to other events and they keep a very similar format, which works well in my opinion, and had great speakers who did contribute with knowledge to the industry. So About a year ago I decided to really materialize my ideas and this is when Expocannabiz was born.
CCI: What makes Expocannabiz unique?
JT: Expocannabiz focus is in the industry, the commercial side if the business. We want to know what entrepreneurs think, and how we can help them because there is a lot of uncertainty in the industry, terms of acquisitions over the lack of funding. So, Expocannabiz is focused on how to develop this industry, not if the industry should be medicinal or recreational.
CCI: What are the major challenges in the industry at the moment?
JT: The lack of funding for most of the industry players. We currently have 200-300 granted licenses, and even more in process, so if we assume each company has 3 licenses, we have about 80-100 companies, of which 20-30 are already backed by Canadian companies and Capital. Some of the remaining companies must have some local capital or funding and don’t need Canadian investors, but most of them don’t have the financial muscle, so this is an opportunity for companies to find funding without having to loose time and resources, and not having to sell 100% of their company at a low price.
CCI: Can you tell us more about Etnothecarium?
JT: My cousin established Etnothecarium three years ago with two partners, but they abandon the project do to other personal reasons or circumstances, so then we created Etnothecarium Bótica Natural, which is where I invested. We work with two chemists and a lawyer as well. We currently have three licenses: Fabrication, THC and CBD cultivation, and we’re waiting on ICA because we filed our documents before the deadline last year. The Cultivation licenses are under my name as a small cultivator, the next step is to request licenses for the company as a big cultivator. We’re not desperate to have 10, 20, 30 or even 100 hectares, unlike other companies have contemplated. My model is to start small, with half a hectare, and once we see returns, which should be close to 2 million USD per harvest, we’ll have more capital to expand. We want the business itself to provide for expansion. We know we need more investment, and we want to annex cultivation licenses to our fabrication license and charge small cultivators for extraction. We’ve looked at CO2 extractors for 360,000 USD for 1 hectare, but I think we should have something with a higher capacity. We may not need it right now, but we will in the future. Once you surpass half a ton of dry flower extraction, costs don’t increase proportionally, because you only change cylinders and columns. Etnothecarium is a platinum sponsor in our event, even though it is also my company I decided to separate it from the event. Another sponsor is Clever Leaves, who was the first company to come in as a platinum sponsor.
CCI: What would you like to see in future regulatory changes?
JT: The law doesn’t specify how we’re going to promote sales in this industry, I heard Andrés López said it would be via pharmacies. I think it would be better to have dispensaries, because this product is very controlled, and if you place it in any pharmacy, where there are a lot of actors involved, the risk is higher. These products have a higher costs, and surely some of the product is going to get lost, so all the control they had over us, is going to be lost. I think there should be dispensaries, with qualified people, like they do so in Canada and the US. This also creates another industry, licenses and more jobs, and this way the client can decide which product they prefer in terms of price and quality. I have been in some dispensaries in the US and it’s a process to purchase, there is no publicity and they have advanced security systems. I also expect the Decree to avoid lowering prices. In the US, the cost of cultivating one pound of cannabis is 75 USD, and they sell it for 950 USD, so why are we going to give our product away? If it costs 25 USD to cultivate one pound in Colombia. It’s sold for about 60 USD in Bogotá and 20 USD in the same region in the illegal market. So, if you assume it costs 5 cents to cultivate a gram of cannabis in Colombia, then a kilogram is going to cost 50 USD, so why do companies want to pay 70,000 COP for one pound of dry flower? I think we should also reward farmers, and everyone is wining. Canadian companies are not going to sell Colombian cannabis for less because it costs less to cultivate, on the contrary, they’re probably going to add value and sell it at higher prices. I’d like to see big companies and small producers agree, because we should be competing with quality, not price. Once the US legalize Cannabis at the Federal Level, maybe we’ll be allowed to export dry flower for a recreational markets. I know this is going to take several years but I would like to see it, because it would be great for the Colombian economy.