LATAM – The Global Cannabis Report 5th Edition

Latin America is a key region when it comes to cannabis, particularly from a historical perspective. In 2013, Uruguay was the first country to legalise adult-use cannabis. Colombia, often associated with its substantial past illegal production of cannabis, enjoys today, with its production legalised, an interesting genetic diversity. Both countries, however, face challenges in their cannabis industries and their goal to become relevant global cannabis players.

In 2023, we saw a growth in cannabis exports from Colombia of 28.6% when compared with 2022, and 2024 is likely to close with positive news, as the country is increasing its export destinations for both the plant and seeds. Nevertheless, supply chain and bureaucratic challenges remain and many promising companies are closing down or reducing their capacity. In Uruguay, the cannabis industry has exported a total of US$30 million in the last ten years, much less than initially projected, and, in 2024, Canadian producer Aurora announced that it would be leaving Uruguay, despite having invested over US$260 million to have its operations in the country.

As we approach 2025, the region, from a supplier perspective, finds itself at the centre of a competitive global context, which has, on the one hand, players from highly developed countries with thriving ecosystems, intensive capital availability, healthy local demand, and ease of business with similar developed countries, and, on the other hand, some newer players from less developed countries, aiming to take a slice out of the global cannabis business, leveraging their very low production costs and their location, often closer, compared with Latin America, to relevant markets such as Europe.

Observing this global context, it is not surprising to note, as anticipated by Prohibition Partners’ previous reports, that trade in the cannabis sector between Latin American countries is increasing. Brazil, by far the largest economy in the region, has shown healthy growth in recent years, with cannabis sales in pharmacies growing 127% in 2023, and average shelf price at approximately US$70 per 30 millilitre product in 2024, a substantial drop from the average price of imported products in previous years, which was around US$150 per product. Brazil is now responsible for over 32% of the total Colombian exports, a number likely to keep growing. In 2024, we also witnessed the formation of the largest cannabis group in Latin America, with the purchase of Colombian cannabis producer Plena Global by Brazilian group Ease Labs for over US$7 million, in part with funds from Brazilian bank Itaú BBA, the largest bank in Latin America, now openly investing in cannabis and providing about US$2.7 million to the group in 2023.

‘With the decriminalisation of cultivating up to six plants, grow shops are experiencing significant sales growth, similar to the boom that head shops saw about ten years ago. The country is also awaiting a decision from the Supreme Court of Justice (STJ) regarding cultivation on national territory, which will likely expand the number of brands and significantly impact the Latin American market, establishing a new balance of power within this industry.’

As for Mexico, the second largest economy in the region, the situation regarding cannabis remains vague. Despite the supreme court ruling the possession of up to 28 grams of cannabis legal, the regulatory body, the Federal Commission for Protection against Health Risks (COFEPRIS), has not developed a regulatory frame-work following the ruling, making it therefore unclear exactly how to produce, transport, sell and buy cannabis, and meaning that companies in the country are forced to operate in a risky ‘grey’ legal area with ambiguous future scenarios.

In Argentina, patient associations, also known as cultivation clubs, which are fully legal under the current regulatory framework, now number over 400. Patients can also purchase cannabis products at pharmacies, such as those from the state-run company, Cannava, at a lower price than imported products, but still with limited distribution nationwide. Only cannabis extracts are legal for commercial purposes in Argentina and, in terms of production, the country is still working around adapting to the 2023 law that allowed for cannabis and hemp cultivation, processing and export.

Argentinian companies have already signed export agreements to Australia (200 kilograms), Germany (130 kilograms) and Portugal (400 kilograms) in 2024, totalling 730 kilograms for commercial use with over 1% THC, plus a recent 5 kilograms CBD-only export to Switzerland’s Green Brothers, likely for test purposes.

‘The regulatory process for cannabis in Argentina has been complex since the enactment of Law 27.669, further complicated by the new government’s approach, which left ARICCAME without leadership for almost a year. The recent intervention aims to develop the management structure, but uncertainty remains high, affecting businesses and patients alike. Meanwhile, the implementation of Law 27.350 and the fact that REPROCANN is undergoing audits and experiencing delays have led to widespread dissatisfaction. The lack of national progress has prompted the introduction of provincial regulations, such as the Salomé Law in Chubut which has established a local regulatory agency, hinting at a trend towards regulatory fragmentation.’

‘The use of cannabis in Mexico is in a transformative stage across various aspects (social, legal, medicinal), making it crucial for both society at large and the medical community to use reliable sources for information and products. There is an urgent call for authorities to move towards a change in legal status based on scientific evidence and patient needs, addressing barriers to access and safe supply while promoting an open discussion that prioritises patient health and well-being.’

Looking at another market in the region, patient associations continue to be the top cannabis source for patients in Chile, where local business prospects remain limited and the main cannabis association, Fundación Daya, is in the midst of a corruption scandal. The market is primarily driven by a few pharmacies offering imported Canadian products.

Other countries such as: Costa Rica, Ecuador, Jamaica, Panama, Peru, and Trinidad and Tobago have been working towards developing legal frameworks to facilitate commercial cultivation and meet the growing demand for medical cannabis. Paraguay continues to focus on, and gain strength with its socially inclusive hemp-based production of several products, including plans for hemp-based farm animal food.

Naming Latin America as a present-day cannabis hotspot would seem to be a stretch too far, but there are definitely markets worth keeping an eye on, such as Brazil and Colombia, for their consumption and production respectively; Mexico, for its potential domestic demand should adult-use or medical access become clearly regulated; and Argentina, for its large-scale agricultural potential.

To achieve this potential, the region needs to become more agile in regulatory terms, transform socially conservative political views and follow a more pragmatic approach, facilitate a thriving ecosystem with solid supply chains and access to capital, and ease the exportation and importation of cannabis products.

Competitive advantages: Large internal market, advanced agricultural and pharmaceutical industry, available land for cultivation

Business challenges: Regulatory setbacks, dominant conservative politics

Government: ANVISA, Ministry of Health

As the largest country in Latin America and the southern hemisphere, Brazil naturally enjoys a significant consumer market, particularly in the more affluent southeast, as well as the south and centre-west regions, and in key cities such as: São Paulo, Rio de Janeiro, Brasilia, Belo Horizonte, Curitiba, Porto Alegre, and Recife, among others.

Boasting a solid, developed agricultural sector with plenty of land, the country could become an important cultivation centre, a reality not yet possible, as cultivation of cannabis and hemp remains illegal. The country also has a well-established pharmaceutical sector, which has, timidly, entered the cannabis production world with traditional national pharmaceutical companies, such as Aché, Belcher, Eurofarma and Prati Donaduzzi, now having registered cannabis products with ANVISA.

‘The landscape of medicinal cannabis use in Brazil continues to advance, primarily with the growing number of patients but also with the increase in prescribing professionals and new ways to access treatment. Today, there are more than 6,000 court rulings allowing domestic cultivation for medical purposes, over 100 patient associations cultivating cannabis, dozens of products authorised for sale in pharmacies, and hundreds of products approved for importation by patients. Additionally, the number of local laws focused on providing cannabis products through the public healthcare system is also on the rise.’

Specialised cannabis companies have also emerged and consolidated, such as Aura Pharma, VerdeMed, and Ease Labs – the latter having become the largest cannabis company in Latin America after acquiring Colombian company, Plena Global, earlier in 2024.

Politically, Brazil’s president and his party tend to have a more open approach to cannabis legalisation, as does the country’s supreme court (STF), which in a historic ruling in July 2024 decriminalised the possession of up to 40 grams of cannabis flower or up to six plants of cannabis, making those quantities an ‘administrative infraction’ subject to a fine but not regarded as a crime. That said, the country’s legislative branch is highly conservative and, in the aftermath of the supreme court decision, threatened to make any possession of cannabis a federal crime, a threat that never materialised but continues to exist as a bargaining chip in the ongoing political and governmental debate.

The country’s cannabis ecosystem is thriving, though, and most developments are favourable for those investing in this field. Patient associations continue to operate and grow in the country with over 16 medium to large patient associations spread across the country, with many more small ones, serving over 86,000 patients nationwide.

Pharmacy sales of cannabis products grew a staggering 127% from 2022 to 2023, with over 357,000 cannabis products sold in Brazilian pharmacies in 2023, for a total of approximately US$28 million. This comes thanks to more involvement from local producers, a mix of specialised cannabis companies and large national pharmaceutical companies, which has led to a drop in the average price of cannabis products at around US$75, a significant price reduction compared with prices in previous years.

Meanwhile, cannabis imports grew in 2023 compared with 2022 at 69%, for a total of 136,663 import authorisations from ANVISA. Despite this substantial increase, we have seen a trend towards a deceleration of growth, with the first half of 2024 registering a 14.6% increase in import requests compared with previous same- period increases close to 98%. This deceleration comes thanks to the increase in local production with lower prices.

As of September 2024, there were 37 cannabis products with a valid sanitary authorisation from ANVISA, with over 25 different national cannabis products available at pharmacies, compared with the 15 that were available in 2023, and around 41 with pending authorisations at ANVISA, according to the Brazilian Association of Cannabinoid Industries (BR Cann). As of October 2024, most cannabis products made in Brazil, and available at pharmacies, had a THC content inferior to 0.3%. In Brazil, only extracts are legal, and plans for treatments with cannabis flowers are unlikely to materialise in legal terms in the next few years.

Competitive advantages: Know-how, genetic diversity, legislative and regulatory support, growing ecosystem, suitable land for cultivation

Business challenges: Hurdles to exportation, lack of business specialisation in the industry, lack of capital for cash-intensive developments

Government: United Nations Commission on Narcotic Drugs (CND), The National Institute of Drug and Food Surveillance (INVIMA), The Colombian Agricultural Institute (ICA), Ministry of Health and Social Protection, Ministry of Law

The Colombian cannabis industry has been a rollercoaster of expectation versus reality that could easily demotivate those without enough stamina – or cash flow – to remain in the game. Since regulation for cannabis production was introduced in 2016, over 2,500 cannabis-related licences have been awarded to businesses. According to the Colombian Cannabis Association (ASOCOLCANNA), in 2023 there were close to 1,000 companies with cannabis licences, of which only 40 were actually in operation – 22 for scientific purposes and 18 for exporting cannabis products. Out of almost 10,000 hectares with cannabis cultivation permits, less than 15 were farmed in 2023.

Meanwhile, we are still observing a growth in export figures, with over US$10.8 million exports in 2023, an increase from US$8.4 million in 2022 and US$4.2 million in 2021, signalling growth, even though it is decelerating and is nowhere near the industry projections of a few years ago. Of the total exports from 2023, 32% went to Brazil, 25% to Australia and 14% to Germany, with those three countries therefore totalling 71% of Colombian cannabis exports.

Colombia continues to increase the number of countries to which it can export the plant and seeds. It now totals 12, including the recent addition of North Macedonia in 2024 due to the export by Richmond Seeds SAS of 180 seedlings of asexual cannabis sativa.

Colombia holds phytosanitary licences that allow the exportation of seeds to Argentina, Canada, the United Kingdom, Lesotho, Peru, Spain, Switzerland, Thailand, the United States and Uruguay. Local consumption of CBD products shows slow growth, and specialised cannabis clinics, such as Zerenia are not expanding, with the latest figures suggesting that around 30,000 patients received treatment in 2022. It remains unclear if the deal that was closed in 2023 between Bogota’s city government insurance company, Capital Salud and Zerenia clinics, to serve over 280,000 chronically ill patients with cannabis treatments, has taken off.

Recent regulatory changes to allow for ‘in-country’ flower sales create new hope for a struggling industry. Up to September 2024, only cannabis extracts could be sold at pharmacies, but new legislation approved will allow for the sale of flowers for cannabis-based medical treatments, which gives hope to local producers in need of a sales boost.

‘Uruguay continues to be the country in the region with the most stable and developed legal framework for the industry, with an increasingly diversified supply and exports to 16 destinations by 2023. Although the country has not been immune to the ups and downs of the industry internationally, the export of cannabis medicines to Brazil, the potential represented by the German market since 1 April, as well as the development of the hemp industry for grain and fibre in the short and medium term, are opportunities with huge potential for development.’