Whilst the cannabis industry wasn’t an overnight sensation in Latin America, the market has been steadily increasing over the past several years, and changing public and political attitudes towards legal cannabis is fuelling growth and demand around the world. In a market where labor is cheap and agricultural experience is in abundance, LATAM is in a unique position to become a key player in the legal cannabis market. Indeed, the market hit US$125 million in 2018, according to The LATAM Cannabis Report, with some forecasts predicting that the figure will climb to highs of US$12.7 billion by 2028. Below, we share more details.
Companies already getting involved
With countries such as Canada legalizing cannabis and discussions taking place in Europe to do the same, there has never been a better time to get involved in the legal cannabis production industry, and some businesses already have. Wayland Group (fka MariCann Group Inc)
Indeed, the San Juan Province recently constructed a new hydroelectricity site, as well as investing in new roads. The territory also has a skilled labor pool with many employees spending their lives in agriculture, meaning that Wayland Group can enter into the market and take advantage of the region’s skill sets and expertise from day one; little training or development will be required to turn the sites into multi-million dollar cannabis farms.
Changing Latin American attitudes
As well as manufacturing cannabis for export to countries around the world, there are also the opportunities that await inland. In 2017, Mexico’s then-President Enrique Peña Nieto signed a deal to legalize medical cannabis in the country, and came about after an eight-year-old epilepsy sufferer took the government to court in a bid to gain access to CBD oil legally in one of the first cases of its kind. We’ve since seen governments debate CBD and the use of medical and recreational cannabis in parliament and chambers around the world, and many other countries are considering the benefits of legalizing the drug, even if they choose to tax it.
Medical cannabis was also legalized in Colombia in 2015 and, by 2017, the Colombian government had begun the process of commercial cultivation legislation to take advantage of the growing demand and make it easier for businesses (both homegrown and with foreign investors) to cultivate and export cannabis to other countries around the world. In fact, Law 30, or the National Narcotics Statute (Estatuto Nacional de Estupefacientes), stated back in 1986 that manufacturing, exporting and selling cannabis was legal, and that using the drug for medicinal purposes was also permitted. The new legislation, however, adds clarity to those archaic rules and guidelines and ensures that everyone can take advantage of its relaxed attitudes towards the drugs. In fact, in February of this year, Colombian authorities signed off the first shipment of legal cannabis to Canada, the first of its kind and a sure sign of what’s to come. For businesses considering entering into Colombian medical cannabis production, it is good to know that the country’s government is on your side and is ready to accept foreign direct investment (FDI) to get the ball rolling and turn the nation into a cannabis powerhouse.
Huge support from senior figures
Vicente Fox, who served as President of Mexico between 2000 and 2006, has said that he expects Mexico to follow in the same path as Colombia in the coming years and export its cannabis to markets including the United States. Mexico is going for federal legalization, which gives businesses more control and freedom over the production of cannabis – there will be no red tape, no vague laws or statutes, and no confusion. In an interview with Forbes, Fox said that “cannabis investments in Mexico can be recuperated much faster than usual,” and that “we still have five to ten years of high profitability ahead of us,” but added that he expected there to be a significant increase in competition, which would naturally bring down the price of cannabis and make the sector less profitable over time. “Cannabis will soon be a powerful, employment-generating, wealth-generating, sector. This sector, just like industrials, cars, or tech, will become increasingly attractive.” In other words, act fast if you want to enter the medical cannabis market in Latin America, and you’ll be able to reap the rewards!
With so many incredible opportunities for foreign investors entering into Latin America, the global cannabis market has never been more exciting. There has never been a better time to invest in one of LATAM’s cannabis companies or indeed incorporate your own to capitalize on growing global demand. Don’t wait around and let your competitors get there first!