The medical cannabis market in Latin America is expected to be worth $8.5bn in 2028. Health Europa explores the industry, highlighting the main drivers in the rising economy.
Latin America is emerging as one of the key players in the medicinal cannabis industry, particularly on the growing and agricultural side of business. Although Canada has always been dominant in the medical cannabis market, this is now under threat, and many Canadian companies are looking at moving south and working with Latin American suppliers.
The latest figures on the state of the Latin American legal cannabis market estimate the region’s value at $125m (~€111m) in 2018 and $12.7bn in 2028 – of this, the medical cannabis market is forecast to be worth $8.5bn in a decade, approximately two-thirds of the total value of Latin America’s cannabis market.
Health Europa examines the Latin American medical cannabis market, highlighting the main drivers of the rising economy in Latin America.
Why is Latin America such a crucial player?
Latin American companies have the ability to provide cannabis products for export at a lower cost than in North America and Europe for a variety of reasons, making the continent a key player in the production and sale of medical cannabis.
Colombia has issued the most licences for the growing of cannabis in the region due to its warm climate and the fast-changing attitudes toward the drug – there are currently more than 40 licensed producers across Latin America.
Having ideal climate conditions is just one of the reasons why Canadian and North American medical cannabis providers are investigating growing their products in Latin America as one of their cost-reducing options; agricultural building and labour costs are a lot lower in Latin American countries, also. One report has concluded that the costs of construction and facilities in Latin America can be as much as 80% cheaper than that in North America and Europe.
What do you know about Colombia?
Medical cannabis has been legal in Colombia since 2015 and is now set to dominate the market. According to Borja Sanz de Madrid, director of operations at Pideka SAS: “Colombia will be the genetic seed bank for the world, as we have the highest quality standards for seeds globally with phytosanitary certificates.”
As of yet, cannabis cannot be exported out of Colombia; however, this year we are set to see big changes within the industry, as a Colombian marijuana company has received authorisation to export products to Canada for testing; the country is preparing to produce 40.5 tonnes of cannabis per year, starting this year.
The first test of its kind is now under way and the first set of results will soon be available. “Once we have the analytical results, we would be able to show the world that it’s possible to grow top-quality cannabis in Colombia, certified by an external Canadian laboratory,” Andres Fajardo, CEO of Clever Leaves, told Marijuana Business Daily.
Ryan Douglas, a cannabis growth consultant, told Marijuana Business Daily: “As more countries legalise cannabis for medicinal use, Colombia is positioned to become a dominant supplier to these new countries as they ramp up their own domestic production capacity.
The medical cannabis market in Mexico
Mexico has the largest population in the region, with 131 million citizens. Medical cannabis was only legalised in 2017; however, the Mexican market is predicted to be one of the biggest in the world in the years to come.
At the moment, medicinal cannabis in Mexico can only be prescribed in oil form and must be prescribed by a registered GP; the oils are restricted in THC content and cannot contain more than 0.3%.
Cannabis consumption in Chile
Chile has the highest cannabis consumption rates per capita in the whole of Latin America and, in 2015, the country legalised medical cannabis following a pilot project involving clinical trials in 2014.
In 2018, the medical cannabis market was expected to be around $186m – this forecast is suspected to grow to $3.35bn in 2028, out of a $5bn total for the entire cannabis industry in Chile.
Please note, this article will appear in issue 9 of Health Europa Quarterly, which will be available to read in April 2019.