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(MENAFN – Costa Rica News)

The topic of medicinal Cannabis and its varieties such as Hemp has left a diversity of opinions due to everything that entails its cultivation. In previous days, in The Costa Rica News (TCRN) , we emphasized the initiative of Law 21,388 aimed at the reactivation of the Costa Rican economy after the COVID-19 Pandemic, issued by the President of Costa Rica, Carlos Alvarado, which is called the ‘Cannabis and Hemp Production Law for Medicinal Purposes’.

Regarding the proposed Law, we highlight everything related to the authorities’ points of view, whether citizens agree or not, the possible licenses for the cultivation of Cannabis. Recently, it was learned that representatives from the Ministry of Agriculture (MAG) are waiting for seedlings to begin research on Hemp.

In this regard, Marlo Monge, vice minister of MAG, said that they have already made the import request for the first hemp seedlings, without specifying where they will be imported from. In his opinion, he reported that Hemp is a crop that can be harvest after four or five months. ‘By the end of the year, we could already have clarity on how this crop behaves in our country.’ Two places have been chosen for the tests: Cañas and Guápiles, precisely because of their climatic conditions. The first for being a dry climate and the second is a tropical forest.

Did you know that the World Health Organization (WHO), in its last official report, removed

Cannabis (CBD) from the category of Psychoactive Drugs?

The WHO document recognized that there are no reported cases of abuse or dependence on the substance and that it does not represent a danger to public health. In the study, they mention that CBD lacks psychoactive characteristics, which creates new possibilities for the substance to be used in other types of studies and research.

For the Organization, Cannabidiol is not addictive, despite this; it does not mean that Cannabis is no longer classified as a drug by the international organization. Last March they planned to hold the vote to reduce restrictions for scientific research and medicinal use in various regions of the world.

The Commission on Narcotic Drugs, which is part of the Economic and Social Council of the United Nations (UN), is the body in charge of periodically modifying, reviewing and updating the list of prohibited substances, all of this under the recommendations of the World Organization of Health (WHO), which, in turn, is advised by the Expert Committee on Drug Dependence. The reason for the postponement is because they must clarify the implications and consequences of the said decision, taking into account its complexity.

It is worth noting that Cannabis research has been going on since the ’60s since then it has stumbled upon many obstacles that have prevented its benefit for millions of patients . Cannabis still looks bad for some groups of society, perhaps very soon with so much research and studies, on so many benefits being proofed, they can change their minds.

Source:  https://menafn.com/1100397986/Status-Update-on-Cannabis-and-Hemp-Recognition-both-in-the-National-and-International-Realm

Get a lot more detail on cannabis and hemp regulation in Costa Rica here

Cannabis and Hemp Legalization in Costa Rica

Cannabis and Hemp Legalization in Costa Rica

It took a catastrophic financial event like Coronavirus to push the Costa Rican Cannabis and Hemp Legalization bill in the Legislature. On May 7, the President of Costa Rica, Carlos Alvarado indicated that he would back the “industrialization of Hemp.”

He did omit the word cannabis from his Press Release which indicated that “we will present another project to the legislature that will allow and promote the production of hemp in the country” Currently the only proposed law in the Legislature is the Cannabis and Hemp Production Law for Medicinal Purposes which is pending legislative review under Bill number 21,388. That bill was introduced by Legislator Zoila Volio Pacheco in May of 2019. #Proyecto21388. I have included the full text translated into English of that proposed law below.   

The original full spanish version you can download here.

21.388-sustitutivo-2

 

There is also an alternative bill being discussed, which would modify the existing one. That modification is being suggested by Jose Maria Villalta a legislator representing the left-wing party of Costa Rica, Frente Amplio.

That proposed revision is titled Law for Regulation of Cannabis for Medicinal and Therapeutic Use and for the use of Hemp for Industrial and Food production. You can download the Spanish version here

The original version proposes two types of Licenses, which are “A” which would allow the holder to cultivate both cannabis and hemp as well as have an extraction facility. The cost of the license would be $300,000 every six years. The “B” License is for licensed laboratories.

The proposed revised version attempts to spread out the benefit by allowing cultivation to small farmers, coops, and local agricultural development organizations. In that version, the licensing costs would depend on the size of the operation. The revised version also delegates to the Costa Rican Public Healthcare Administrator – CCSS the authority to ” conduct research and to produce medicines and medicines in its laboratories therapeutic use products for use authorized by the Ministry of Health, using psychoactive cannabis, its extracts and derivatives; as well as to receive, buy processing and to distribute cannabis for medicinal and therapeutic use, its products, by-products, and derivatives.”

So the bottom line is that we do not yet have a final version of Cannabis and Hemp Law. However, the legislative debate will begin as to which model should be implemented in Costa Rica. As development occurs, we will post any update on this site. 

CANNABIS AND HEMP PRODUCTION LAW FOR MEDICINAL PURPOSES
Legislative File No. 21,388

LEGISLATIVE ASSEMBLY:

The medicinal use and production of cannabis and hemp is now legal in more than 21 countries around the world, representing a global market of more than 1 billion people, of which about 60% of the market is in countries whose legislation allows the medicinal use of cannabis and hemp. From the environmental point of view, Costa Rica offers truly beneficial climatic and environmental conditions compared to many of the countries producing cannabis and hemp-based drugs. Similarly, the investment in infrastructure that would have to be made in Costa Rica is less than the investment required in other countries with more extreme climatic conditions, whether due to high or low temperatures.

The present project pursues two main objectives of a diverse nature. The first is to generate a pharmaceutical industry around the products resulting from the cultivation of cannabis and hemp, which have already been accepted worldwide, and the second is to provide national and international consumers with quality products formulated and produced under the best international standards and practices. It is very important to establish that the present project does not regulate the recreational use of cannabis and hemp, but is limited to an industrial regulation of the medicinal and industrial production of cannabis and hemp.

With regard to the governing institutions, the project establishes an exclusive governing body for the medicinal production of cannabis and hemp in favor of the Ministry of Public Health, which currently has the legal authority to regulate and verify compliance with the provisions of this law, and an exclusive governing body for the Ministry of Agriculture and Livestock with regard to sowing, the import of seeds and all regulations concerning the industrial phase of the products.

In the first place, the pharmaceutical industry based on cannabis and hemp has developed in many countries of the world, some of them, Canada, United Kingdom, United States, France, China, Colombia, Chile, Uruguay and many more.

These countries have designed legislation that establishes cultivation conditions, production requirements, good practices and, above all, regulations aimed at protecting consumers. Through this law, Costa Rica can become a development pole and cluster of pharmaceutical companies that intend to take advantage of the political and social stability of our country. It is there where this legislation can generate the opportunity for these companies to hire thousands of people with professions and specialized knowledge that are currently not being absorbed by the labor market.

The pharmaceutical industry of cannabis and hemp also includes a large component of farming, a situation that could mean for our country the generation of thousands of direct jobs for agricultural activities in areas where unemployment levels are really high, therefore we would have a generation of specialized jobs and, equally, thousands of agricultural jobs.

The project establishes a licensing system that seeks to establish limits and specialties in terms of the production phase in which it will intervene. Extraction and laboratory licenses are created, as well as laboratory licenses and, in the planting sector, several planting licenses ordered by the number of hectares cultivated.

Secondly, cannabis and hemp-based medicines and supplements have already passed scientific scrutiny worldwide. The possibility of treating patients with new drugs improves the quality of life and significantly reduces the use of traditional drugs that have serious consequences for patients’ health. In Costa Rica, civil society has organized itself to be able to obtain oils and extracts illegally in the face of the government ban, which is detrimental to the health of the inhabitants who require or prefer this type of medicine. It is very important to make clear in this justification that the industrial production of any type of drug that is going to be used for health reasons by a patient requires the application of strict protocols for planting, synthesizing and industrial production. It is not the intention of this project to allow the illegal or rudimentary production of drugs at home because of the high degree of danger to patients and the lack of compliance with best practices in terms of safety and health.

As a last topic, it is important to establish that Costa Rica has invested more than three decades in developing an export model which has generated billions of dollars in benefits for our country. It is in that same field, where the cannabis and medical hemp industry can become a generator of millions of dollars in exports to government social security, raw materials for other transnational pharmaceutical companies, international pharmaceutical chains and, especially, to patients around the world. The income projections for the country are exponential and so have been understood by other nations that have implemented this type of legislation.
Currently, our country suffers from great fiscal problems, where it is not enough to cut expenses, but the State is forced to generate income from new activities. The exploitation of cannabis and hemp for medicinal purposes will be a specialized industry, of great world exposure and of great benefit to the country. It is by virtue of the above, that we submit to the deputies of the Legislative Assembly, the bill called “Law of Production of Cannabis and Hemp for Medicinal Purposes”.

For the above reasons, the present bill called “Law on the Production of Cannabis and Hemp for Medicinal Purposes” is submitted to the knowledge and approval of the Legislative Assembly.

THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF COSTA RICA
DECREE: LAW ON THE PRODUCTION OF CANNABIS AND HEMP FOR MEDICINAL PURPOSES

TITLE I GENERAL

CHAPTER I
GENERAL PROVISIONS

ARTICLE 1 – Object

The purpose of this law is to regulate the mechanisms of planting, cultivation, harvesting, production, processing, storage, distribution, industrialization, marketing and export of Cannabis Sativa L plants and their varieties and the Hemp or Industrial Hemp plant, as well as the import and reproduction of seeds, health registration of medicinal products, food supplements, cosmetics or foods, all in accordance with the uses, ranges, presentations and purposes authorized in this law.

ARTICLE 2- Scope of application

Natural or legal entities, public or private, national or foreign, that carry out activities regulated by this law, that originate, end or transit through the national territory, and even those that can be exported, are subject to the present law and the Costa Rican jurisdiction.

ARTICLE 3- Purposes

The purposes of this law are as follows:

(a) To encourage research and development of the agro-industry of Cannabis Sativa L, its varieties and hemp and its multiple industrial applications in the country.
(b) To develop promotion and prevention activities aimed at guaranteeing the right to health.
c) To guarantee access to oil or other forms of presentation, of cannabis and hemp derivatives for medical use for all persons who require it according to medical recommendations, when their use has been approved by the Ministry of Health.

ARTICLE 4- Definitions

For the purposes of this law, the following definitions are established:

a) Cannabinoids: are chemical compounds that can be synthesized from the plant whose species is cannabis. There are more than four hundred (400) cannabinoids and of these the three most abundant are cannabinol, cannabidiol and several isomers of tetrahydrocannabinol (THC). None of these are found in other plants. The accumulated data so far indicate a potential therapeutic effect of cannabinoids on pain relief, appetite stimulation and control of nausea and vomiting. Cannabinoids are fat-soluble products with special tropism by the central nervous system and the immune system.

b) Cannabis and hemp for medicinal use or with therapeutic effect: any part of cannabis Sativa L plants and their varieties, as well as hemp plants, from which their cannabinoids and other compounds with therapeutic effect that serve for the elaboration of medicines are extracted. Authorized presentations are for strictly therapeutic, non-recreational purposes, to alleviate a symptom, ailment or illness previously diagnosed by a doctor.

c) Hemp for food use: any part of hemp plants that can be linked or associated with food or processing of food products and that possesses the appropriate cannabinoid compounds in accordance with studies, ranges and provisions, for normal consumption and complying with food regulations issued by the Ministry of Health. For food use, the trend is in the use and selection, especially, of varieties with a content of less than 0.3% THC.

d) Hemp for industrial use: any part of Cannabis Sativa plants (hemp) that can be used for the production of textiles, ropes, sails for navigation, fishing nets, steppes, seeds, oils, protein, biofuels, lubricants, bioplastics, bioconstruction, paper cellulose, also medicinal and cosmetic applications, insulators, automotive parts. Also, furniture, animal fodder, soap, shampoo, mats, sacks, felts, paints, varnishes, lubricants, water purification culture, among many other utilities.

e) THC – CBD – cannabinoids: are components contained in the widely available Cannabis Sativa plant for medical applications, including certain types of epilepsy, multiple sclerosis, cancer, acquired immunodeficiency syndrome and other diseases. It causes a sedative effect in most cases and inhibits the transmission of nerve signals associated with pain. These do not produce physical or psychic dependence on people.

f) THC or delta-9 tetrahydrocarbocannabinol: it is a psychoactive component that contains the Cannabis Sativa plant and exerts effects on the central nervous system, so it can inhibit pain, modify the mood or alter perceptions.

g) THCA or tetrahydrocannabinolic acid: it is one of the active components that contains cannabis naturally and is non-psychoactive, so it does not produce adverse effects on the user’s behavior.

(h) Base salary: for the provisions of this law, “base salary” means the concept used in Article 2 of Law No. 7337 of 5 May 1993.

ARTICLE 5- Govenment regulation

The Government shall assume control and regulation of seed import, seed breeding, export, planting, cultivation, harvesting, production, industrialization, acquisition of any title, storage, marketing, distribution, transportation, use and consumption of Cannabis Sativa L and hemp, both for therapeutic, food and industrial purposes, according to the parameters and ranges authorized by this law. The State shall issue the relevant regulations for the implementation of the purposes of this law and shall issue a regulation governing the activities. The Government and its institutions shall ensure traceability throughout the production chain authorized in this law and effectively monitor compliance with legal, regulatory and other rules related to the subject.

ARTICLE 6- Allowed ranges

For the purposes of this law the entity that will be responsible for oversight shall be the Ministry of Health, through regulation, to establish the permitted ranges of CBD and THC of seeds and plants of Cannabis Sativa and its varieties so that they are considered authorized for medicinal use.

ARTICLE 7- Prohibitions

The following activities are prohibited:

a) To those who grow, produce, industrialize, market, distribute, freely or individually, Cannabis Sativa products, their varieties or hemp for medicinal, food or industrial use authorized in places not permitted, in qualities or conditions or without having the proper license or permission in accordance with the provisions of this law.

b) Reproduce Cannabis Sativa seeds and their varieties without the proper authorization of the Ministry of Health.

c) Self-cultivation and self-consumption shall be governed by applicable law.

d) Cultivate, use, reproduce or market seeds of Cannabis Sativa L and its varieties, genetically modified or not, without the proper authorization of the Ministry of Health.

 

TITLE II
RESEARCH, REGULATION AND CONTROL

CHAPTER I
RESEARCH, REGULATION AND CONTROL OF CANNABIS AND HEMP

ARTICLE 8- Competent authority

The Ministry of Health is the competent national authority that will have control of all regulated activities in relation to Cannabis Sativa plants and their varieties for medicinal use, in accordance with the provisions of this law.

ARTICLE 9- Attributions of the Ministry of Health

The responsibilities of the Ministry of Health are the following:

(a) Grant licenses, authorizations and permits, as well as their extensions, modifications, assignments and cancellations, in accordance with the provisions of this law and its regulations.

b) Authorize, upon presentation of the respective contract, the export of manufactured products derived from Cannabis Sativa plants and varieties for medicinal, food and industrial use in accordance with this law.

c) Create and keep a specialized record of food and industrial products produced from hemp plants.

d) Create and keep a computer register of Cannabis Sativa seeds and their approved varieties for research, production, reproduction, cultivation, industrialization and marketing for medicinal, food and industrial purposes, as appropriate.

(e) To enter into agreements with public or private institutions for the purpose of carrying out their tasks, in particular those which already have competence in this area.

(f) Monitor compliance with the provisions in force contained in this law.

(g) Dictate the administrative acts necessary for compliance with this law.

(h) Determine and apply the sanctions set out in this law for violations of regulatory rules and their regulations.

(i) Create and maintain in operation a computer system that allows cross-checking of information relating to medicinal products, containing at least the exact data of inventories of medicinal products derived from Cannabis Sativa and its varieties in pharmaceutical establishments, sales of products and users.

(j) Create a register of exports of products and medicines derived from Cannabis Sativa plants and their varieties, issue certificates of origin and export certificates in coordination with the Directorate-General of Customs.

(k) Certify for the purposes of auditing, transparency and banking control the turn or origin of the activities and resources obtained through the licenses and permits in accordance with the provisions of this law.

l) Authorize donations of medicines derived from Cannabis Sativa plants and their varieties from licensees to the Costa Rican Social Security Fund.

m) Prepare and approve the agricultural regulations under controlled environments for the planting and production of Cannabis Sativa and its varieties for medicinal, food and industrial use in conjunction with the Ministry of Agriculture and Livestock.

n) Issue regulations to authorize the use in Costa Rica of medicines made from Cannabis Sativa and its varieties.

Define the terms of registration, application and prescription for the authorization in Costa Rica of medicines made from Cannabis Sativa and its varieties.

o) The Ministry of Health shall be responsible for establishing the procedures for the termination of the contract and the declaration of termination and may establish all kinds of precautionary measures, including the provision on products derived from Cannabis Sativa and its varieties, in the event that the contract is terminated or terminated.

 

ARTICLE 10- Registration of medicines

For the registration of medicinal products based on Cannabis Sativa, its varieties and hemp the provisions of the General Health Law, Law No. 5395 shall apply. It will be essential to check technical-scientific compliance with the CBD and THC ranges established in this law.

The Ministry of Public Health is authorized by this law to fully recognize health records of cannabis and hemp-based products when the registrations have been issued by recognized health bodies of countries that are commercial partners of Costa Rica through a free trade agreement, whether bilateral or multilateral. In the event that products do not have health records issued by recognized health agencies since in their country of origin they are not subject to this requirement, the Ministry of Public Health shall recognize the institution certifying their free sale, whether public or private, according to the legislation of the country of origin of the product.

For the purposes of this article, the Ministry of Health will establish a regulation for the recognition of health records with countries that are commercial partners of Costa Rica through free trade agreements. Recognition of the health register from a country that holds the category of commercial partner of Costa Rica through a free trade agreement, implies the automatic issuance of a Costa Rican health register in the term of 30 calendar days, this without requesting any additional requirements other than the consular certification of the health register or its free sale by the owner of the registry of the country from where the export to Costa Rica will be made.

 

ARTICLE 11- Attributions of the Ministry of Agriculture and Livestock

The responsibilities of the Ministry of Agriculture and Livestock are the following:

a) Grant the food and industrial use licenses for hemp.

b) Issue safety protocols for the control of seeds and farmlands.

c) Regulate the mechanisms for authorizing food, agro-industrial and marketing of hemp.

d) Sanction offenders in accordance with the prohibitions, violations and penalties set forth in this Law.
(e) Control the entire production chain from the acquisition of seeds to the effective marketing to the final consumer of the products, without prejudice to the competences conferred on other bodies and public bodies.
(f) The Ministry of Agriculture and Livestock is authorized to design and build the appropriate infrastructure for the performance of all activities regulated by this law.

(g) Create a computer register of cannabis and hemp seeds authorised for research, production, reproduction, cultivation, industrialization and marketing for medicinal, food and industrial purposes, as appropriate.

(h) Determine and enforce the relevant penalties for violations of the regulatory rules set out in this law and its regulations.

CHAPTER II OF THE ENABLING STATUTES

ARTICLE 12- Licenses

The Ministry of Health will oversee the entire agricultural production process of Cannabis Sativa L.
The Ministry of Agriculture and Livestock will be responsible for licensing production based of hemp crops for industrial and food purposes.

ARTICLE 13- Licensing

The licenses shall enable the holder to carry out the activities indicated in this law, the regulations, protocols and contractual clauses. The Ministry of Health and the Ministry of Agriculture and Livestock may not grant the licenses referred to in this chapter where one of the following conditions is met:

(a) An applicant who does not comply with the requirements laid down in this law, in costa Rican law or by regulation.

b) Where the applicant has been sanctioned for breaches in the exercise of an earlier license.

 

ARTICLE 14- Procedure for licensing the production of extracts and medicines

The production licenses of Cannabis Sativa and its varieties for medicinal purposes will be granted by the Ministry of Health by reasoned resolution of the Minister of Health.

In order to obtain a license, interested parties must demonstrate transparency in the origin of their funds, have a legal and ethical trajectory and comply with the provisions of the Law on Narcotic Drugs, Psychotropic Substances, Drugs for Unauthorized Use, Related Activities, Capital Legitimization and Financing to Terrorism, Law No. 7786 of April 30, 1998, and its reforms.

Applicants shall undertake to authorize and cover the costs necessary to carry out any type of investigation into the origin of their funds including the lifting of any bank secrecy veil at the request of the Ministry of Health, in accordance with the procedure laid down in section 106b of the Law on Compliance with the Tax Transparency Standard, Law No. 9068 of September 10, 2012 , published on 28 September 2012. In the event that such funding does not have a verifiable legal source or is of a dubious origin, it shall be reason sufficient to dismiss the application.

 

ARTICLE 15- Conditions and types of licenses

I- There will be two categories of licenses (type A and type B). Each applicant natural or legal person must comply with a criminal background check.

II- Only one license per natural or legal person will be allowed. No licensee may sell, rent or negotiate your license.

III- All licenses established in this law are inconsistent with the free zone regime.

 

ARTICLE 16- License categories

Licenses will be divided and classified into two categories.

a) Category A

I- Category A: The license cost for this category will be $300,000 US (three hundred thousand US dollars) or its colon equivalent. The term of the license shall be six years extended for an equal period upon payment of the corresponding amount.

II- This license has no limitations on the area of cultivation and includes the crops of Cannabis Sativa, its varieties and hemp, which can be developed simultaneously or individually.

III- This license allows the installation of a laboratory for the extraction and industrialization of crop extracts, an activity that will be regulated by the corresponding regulations.

IV- The Ministry of Health or any category A licensee authorized by the Ministry of Health may export the by-products of Cannabis Sativa, its varieties and hemp manufactured for medicinal or food use.

V- The requesting party to the license shall demonstrate its technical and financial capacity to develop and exploit the requested license and that it has no criminal record.

VI- Holders of a category A licence may import cannabis Sativa seeds, their varieties and hemp for planting and reproduction, for which they will require prior authorization from the Ministry of Health.

 

b) Category B

The Category B license allows laboratories established and authorized in the Republic of Costa Rica to produce industrially cannabis or hemp-based medicines. The formulation, registration, production, distribution, sale and export of these products shall be regulated by regulation issued by the Ministry of Public Health. License B does not allow the obtaining of extracts from Cannabis Sativa crops, their varieties and hemp. License B will cost US$100,000 (one hundred thousand U.S. dollars) or its colon equivalent.

ARTICLE 17- Procedure for licensing for industrial and food production of hemp

Hemp exploitation licenses for industrial and food purposes shall be granted by the Ministry of Agriculture and Livestock by reasoned resolution.

In order to obtain a license, interested parties must demonstrate transparency in the origin of their funds, have a legal and ethical trajectory and comply with the provisions of the Law on Narcotic Drugs, Psychotropic Substances, Drugs for Unauthorized Use, Related Activities, Capital Legitimization and Financing to Terrorism, Law No. 7786 of April 30, 1998, and its reforms.

In addition, applicants shall undertake to authorize and cover the costs necessary to carry out any type of investigation into the origin of their funds, including the lifting of the bank secrect veil at the request of the Ministry of Agriculture and Livestock, in accordance with the procedure laid down in section 106b of the Law on Compliance with the Tax Transparency Standard, Law No. 9068 , 10 September 2012, published on 28 September 2012. In the event that such funds do not have a verifiable legal source or are of a dubious origin, it shall be reason sufficient to dismiss the application.

The Ministry of Agriculture shall be responsible for establishing the procedures for the termination of the contract and the declaration of termination and may establish all types of precautionary measures, including the provision on cannabis and hemp products, in the event that the contract is terminated or terminated.

 

ARTICLE 18- Conditions and license for hemp production

There will be only one type of license for the production of hemp.

Each natural or legal person must comply with the filing of criminal records issued by the Judiciary.

 

ARTICLE 19- Description of the license

Holders of a license for the production of hemp may import hemp seeds for planting and reproduction, for which they will require prior authorization from the Ministry of Agriculture and Livestock.

 

ARTICLE 20- Relationships between licensees

In order to regulate the industry created by this law, the following standards are established:

(a) Hemp producers may sell their production for medicinal purposes to category A licensees.

b) Licensees A may sell their production to licensees B, to the Costa Rican Social Security Fund and may export in the same way in accordance with the rules of the regulations issued for the case by the Ministry of Public Health.

 

ARTICLE 21- Termination of licenses

For the purposes of this law, the following are grounds for termination of the license:

(a) The licensee has not carried out the authorized activities, has not fulfilled the commitments made in the infrastructure investment plans and staff recruitment, after one year of being allocated or extended.

b) Non-compliance with the obligations and conditions set forth in this law, regulations or those imposed in the license, except where a fortuitous case or force majeure is checked.

c) Non-compliance with the competent public authorities in the cases established in this law and in the General Health Law, Law No. 5395.

d) The recidivism of serious infringements during the term of the enabling title.

(e) The expiration of the agreed period.

(f) The impossibility of compliance as a result of measures taken by the Powers of the State with the corresponding compensation by the State.

(g) The mutual agreement of the granting administration and the licensee. This agreement must be duly reasoned in consideration of the public interest.

(h) The dissolution of the legal entity.

TITLE III FINANCING

CHAPTER I
CREATION OF A TAX ON THE EXPORT OF PRODUCTS DERIVED FROM CANNABIS SATIVA, ITS VARIETIES AND HEMP

ARTICLE 22- Creation of tax on exports of products derived from Cannabis Sativa, its varieties and hemp
A tax is established on the amount of export of products derived from Cannabis Sativa, its varieties and hemp, authorized by the Ministry of Public Health through this law, exclusively for those with a category A license.

ARTICLE 23- Taxpayers

Natural persons and legal entities legally constituted, regardless of nationality, domicile and place of incorporation of the legal entities or of the meeting of their boards of directors or of the conclusion of contracts, and which carry out export activities or business in the country related to agro-industrial and commercial activities authorized by means of the licenses regulated in this law, shall be taxpayers of this tax.

ARTICLE 24- Generating event

The chargeable event is the export of products derived from Cannabis Sativa, its varieties and hemp, authorised by the Ministry of Public Health under a category A licence.

ARTICLE 25- Rate of tax

The export tax rate for Cannabis Sativa products, its derivatives and hemp will be three percent (3%) of the total value of exports by Category A licensees previously authorized by the Ministry of Health.
To persons holding any of the enabling titles created in this law and who carry out agro-industrial activities from Cannabis Sativa plants, their varieties and hemp included in this law, the exemptions established in Articles 26, 27 and 28 of the Law for the Development, Promotion and Encouragement of Organic Farming Activity, Law N., will not be applicable. ° 8591 of August 14, 2007, as amended, nor Articles 3(h) of Law No. 7092 of April 21, 1988, as amended, and 9, final paragraph, of Law No. 6826 of November 8, 1982, as amended.

ARTICLE 26- Administration of the tax

The General Directorate of Taxation of the Ministry of Finance will be responsible for the collection and control of the tax created by this law.

CHAPTER II
DESTINATION OF TAXES

ARTICLE 27- The proportion of the proceeds of value added tax, created by Law No. 9635 of December 4, 2018, on planting, cultivation, harvesting, production, processing, storage, distribution, industrialization and marketing shall be allocated in full to the purposes defined in this chapter.

ARTICLE 28 – The proceeds of the tax on the export of products derived from Cannabis Sativa, its varieties and hemp created in this law will be destined for the Ministry of Finance.

TITLE IV
VIOLATIONS AND PENALTIES

CHAPTER I
FOREFEITURE

ARTICLE 29- Confiscation of Cannabis Sativa and its varieties

The Ministry of Health, the Costa Rican Institute against Drugs (ICD), the police authorities, the Ministry of Public Security, the Ministry of Economy, Industry and Commerce (MEIC) and the municipalities are authorized to carry out seizures of products of Cannabis Sativa, its varieties and hemp not authorized by the Ministry of Health. All the confiscated products shall be sent to the competent judicial authority within three days, which shall order the deposit of the products in the place provided by the Ministry of Health for the preservation of evidence until the said authority determines what is appropriate. If after a period of three months, following the conclusion of the judicial process, the legitimate owner does not appear in court to assert his rights, the judicial authority shall order the Ministry of Health to destroy the property. When the destruction of such property is carried out, appropriate measures shall be taken to avoid risks to health and the environment.

The foregoing is without prejudice to the procedure for the destruction of plantations established in article 95 of Act No. 7786 of 30 April 1998, as amended, which shall apply only in the case of cannabis and hemp plantations not duly covered by this Act.

ARTICLE 30- Forfeiture Act

The Health authorities; those in charge of research, regulation and control; police; drug control; and municipal governments, may seize the varieties and/or hemp grown or transacted in irregular conditions and to do so they will draw up a record in the presence of two witnesses. That document shall contain the date, place, first and last names of persons acting with indication of the proceedings carried out and the signature of all parties or the mention that any person cannot or wants to sign.

A copy of the minutes shall be given to the person who is seizing the illegal products or to whoever is at the place of confiscation. The products confiscated shall be immediately placed on the orders of the competent judicial authority.

CHAPTER II
INFRINGEMENTS AND SANCTIONS

ARTICLE 31- Sanctions

In accordance with the offence committed, the Ministry of Health shall sanction:

(a) With a fine from twenty (20) base salaries up to four hundred (400) basic salaries of the position of judicial assistant I, according to the budget law of the Republic, to whom it incurs any of the following conduct:

I- To anyone who fails to comply with any of the provisions established on the sale of seeds of Cannabis Sativa plants, their varieties and hemp.
II- Whoever reproduces Cannabis Sativa seeds, their varieties and hemp without the proper authorization of the Ministry of Health.
III- Anyone who, with authorization from the Ministry of Health, sows or reproduces cannabis Sativa seeds or plants, their varieties for purposes other than seed breeding or research or use cannabis Sativa seeds, their genetically modified varieties or hemp.
IV To anyone who cultivates, produces, industrializes, markets, distributes, freely or onerously, Cannabis Sativa products, their varieties or hemp for medicinal, food or industrial use authorized in places not permitted, in qualities or conditions or without having the proper license or permission in accordance with the provisions of this law.
In addition to the penalties for fines indicated, municipalities and the Ministry of Health may close premises that fail to comply with the obligations stipulated in this law. In cases where it is necessary to renew permits or licenses before such entities or any other institution of the State must demonstrate, by certification duly issued by the Ministry of Health, that they are up to date in the payment of the fines set out in this Article.

All of the above, without prejudice to any penalties that may apply for any criminal offences.

 

ARTICLE 32- Collection and destination of fines

Fines will be collected by the Ministry of Health and the resources raised under this item should be used for control and control work for effective compliance with this law.

 

ARTICLE 33- Term for payment of fines

The financial penalties set out in this law must be paid within thirty days of their imposition.

ARTICLE 34- Administrative procedure

All actions and actions of this law shall be processed in accordance with the ordinary procedure established in the General Law of the Public Administration No. 6227 of 2 May 1978 and its reforms.

TITLE V TRANSITIONAL PROVISIONS

TRANSITORY I- The Executive Branch will have 3 months for the regulation of this law from its publication in the official journal.

Source: https://costaricalaw.com/costa-rica-legal-topics/cannabis-and-hemp-legalization-in-costa-rica/