Recent data from cannabis industry analysts, New Frontier Data, indicates that Latin America is well on its way to becoming a huge competitor in the global cannabis market.
According to Giadha Aguirre de Carcer, founder and CEO of New Frontier Data, “Uruguay in 2014 became the first nation to legalize adult use cannabis, its neighbors throughout Latin America have begun in varying degrees to embrace possibilities and policies for reform.”
A report from New Frontier Data, titled Latin America Regional Cannabis Report: 2019 Industry Outlook, estimates that the total market value of cannabis in Latin America – both legal and illegal – is close to $9.8 billion. It’s expected that the legal market alone should reach close to $9 billion by 2028. An estimated 13 million people in the region use cannabis at least once per year.
That being said, let’s take a look at the four major Latin American markets that are expected to dominate the industry in the next few years: Uruguay, Columbia, Brazil, and Mexico.
The report begins with Uruguay, which shouldn’t be a surprise considering it’s the first country on Earth to legalize recreational cannabis at the federal level. Consumers are allowed to buy cannabis at various clubs and pharmacies throughout the country, or they can grow it at home. The Institute for the Regulation and Control of Cannabis (IRCCA) will soon begin accepting applications for additional pharmacies and commercial producers.
Next in line is Columbia, which according to the report is “positioning itself to be a global exporter of medical cannabis derivatives.” This is because Columbia can produce large amounts of cannabis with inexpensive cultivation costs compared to other major exporters such as Canada. It also sits on a geographical goldmine so-to-speak, being right in the center of the Americas with access to both the Atlantic and Pacific Oceans. Medical cannabis has been legal in Columbia since 2015, and despite their largely negative history with the drug trade, legal recreation cannabis is beginning to shed its social stigma in the country.
Brazil is the most populous country in Latin America, so naturally, it’s also the country with the largest number of cannabis users. Around 4.2 million people in Brazil use cannabis at least once every year, which is nearly 1/3 of the total number of cannabis users in all of Latin America. Medical cannabis is already legal in Brazil, however, it’s limited to CBD-only and possession of cannabis is still punishable by law. The report argues that this will change over the coming years and put Brazil and a much more dominant position in the legal cannabis industry.
Although they only have a CBD medical program at the moment that relies entirely on imports, Mexico has been making big strides towards legal cannabis lately. Last year, the highest court in the country ruled that prohibition is unconstitutional. Last week, the left-wing National Regeneration Movement (MORENA) party introduced a bill to the Senate that would legalize recreational cannabis by the end of the year. The legislation is expected to pass and would allow companies to grow and sell cannabis for commercial, medical, and recreational use.
All the changes and market growth are expected to be in full swing by 2028. Check back for more updates on this developing market and make sure to subscribe to our Weekly Newsletter for all the latest news and information about the cannabis industry.