After registering a growth of 17% this year, the growing cannabis market has been bearing fruit in the region, where Mexico is emerging as the most important market. The medicinal sector is the one with the greatest expansion, but there is also potential for its industrial use.
Costa Rica is about to become the new country in the Latin American and Caribbean region to join the legal cannabis industry. At the end of November 2021, the Constitutional Chamber of the Central American country found no unconstitutionality in the bill that seeks to legalize the production and sale of hemp and medicinal cannabis, so the initiative may be discussed and voted on soon in Congress. .
It is an industry with a lot of potentials and in 2021, according to data from Euromonitor International, Latin America grew 17% and reached a value of US$170 million, with Mexico being the most important market with nearly US$59 million. The market research firm also considers that 2021 was a historic year for advances in regulatory issues and for the first steps in creating a true functional industry in different countries of the region.
However, the road is still long. For Erwin Henriquez, senior research analyst at Euromonitor International, the cannabis industry in Latin America is still in its infancy and its growth is currently motivated almost entirely by increased access to cannabis products in its different formats.
“As more countries, regulators, medical professionals, and consumers become informed about cannabis product options, greater opportunities are emerging for this industry. On the other hand, it is interesting to see how the growth trend is also associated with growth in traditional medicines, herbals, and supplements. There is clearly a relationship between these two industries,” says Henriquez.
For now, medical cannabis is the most promising market, taking into account that most of the countries that already have legislation on use (Chile, Colombia, Peru, and Argentina), only allow it for this purpose. In 2021, it was the segment that registered the greatest increase (27%) and it is estimated that it will have an annual growth of 91% in the next five years. According to projections by Euromonitor, in 2026, the regional medical cannabis market will amount to US$1.2 billion.
In this regard, Erwin Henriquez specifies: “Currently medicinal cannabis is legal only in some countries of the region. Most notably in Chile and Colombia. In Chile, an extensive network of patients and NGOs have been established since its legalization to guarantee access to more than 150,000 patients. However, only a small part of them access pharmaceutical-grade products or master prescriptions, while the vast majority access cannabis via home or community cultivation. In Colombia, the opposite occurs. Market entry has been a bit slower since legalization, but today the Colombian regulatory framework is a standard for the rest of the region. This has allowed the proliferation of companies dedicated to medicinal cannabis for both the legal and international markets.”
By 2022, it is estimated that the potential medicinal market in Mexico will be the largest in the region with more than US$40 million.
OF FLOWERS AND SEEDS
Colombia, for now, is one of the countries that has received the most investment and arrival of foreign companies interested in developing the medical cannabis market. Recently, the American multinational Kinetiq Group expanded its operation and portfolio by investing in the medical cannabis sector in the coffee-producing country, specifically in Breedco, a Colombian-British company located in Valle del Cauca to export medicinal cannabis seeds and dried flowers produced in this region. zone to the United Kingdom, Europe, Canada, South Africa, Australia, United States, and several Latin American countries.
And it is that seeds have become an attractive niche for export and Colombia wants to take advantage of this. According to data from the consulting firm Markets and Markets, the global seed market currently moves US$63,000 million and in 2026 it will reach US$86,800 million, driven by increased demand from the food, beverage, animal feed, biofuels, pharmaceutical, and pharmaceutical industries. cosmetic.
In these industries, big players such as Monsanto, Dupont, and Syngenta stand out, which are the largest suppliers of seeds in the world, but which do very little with cannabis.
Another very attractive item is that of industrial hemp, a fiber that is obtained from the cannabis plant and is used to make textiles, construction materials, bioplastics, and paper products, among others.
With the exception of Uruguay and recently Mexico, the rest of the Latin American countries do not allow the use of cannabis for recreational purposes. However, its potential is great. The Statista platform projects that in 2024 the value of the legal recreational cannabis market in Latin America should reach US$300 million.
Thus, the cannabis industry continues to grow and several Latin American countries have been joining the so-called green wave. In Argentina, for example, the Cannabis Confederation estimates that by 2025, 10,000 new jobs, US$500 million in annual sales to the domestic market, and US$50 million in exports will be generated. Not insignificant figures for a crop that is gaining ground in this region.
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