Latin America Is the New Leader of the ‘Green Rush’

We hear a great deal about Latin America and its potential to become a global business hub. The region has become so essential that IT companies have turned their business in the region into a business trend because they can take advantage of the privileged geographical location of the region, talent availability, and its benefits in terms of time zones to generate new business and collaboration processes to meet essential needs of global markets. The region also includes several countries where citizens have adequate levels of English for the specific needs of international markets.

These reasons and others have turned Latin America into an important region for international business, particularly for the technology services industries, but something very similar is happening in other sectors, such as non-psychoactive cannabis.

Although the biggest market for the cannabis industry is in North America, where regulatory and legal processes have allowed several US states and Canada to access cannabis products for medical and even recreational purposes legally, the reality is that Latin America has shown much greater potential. This potential comes from the openness of some government entities and social movements, accompanied by the advantages of soil fertility and the availability of highly qualified personnel. All of the topics mentioned above have allowed Latin America to gain leading positions within the cannabis industry gradually.

Here are some leadership areas where we, as Latin Americans, have gained ground in the cannabis industry.

Access To Therapeutic Products

Countries like Brazil and Mexico first entered the cannabis industry by allowing access to these products for therapeutic purposes. For example, in Brazil, the regulation contemplates CBD products as part of the public health system, so products with high concentrations of CBD without any psychotropic ingredients are delivered free of charge to patients in some public health entities. Like Brazil, in Mexico, there were some attempts by some local governments to use these types of programs and allow patients to access CBD products and ensure that each patient could access safe and efficient CBD products with no traces of psychotropic ingredients.

In addition, Mexico has a specific law that addresses all the elements regarding the production of cannabis derivatives for pharmaceutical purposes, which  none of the countries in North America have achieved, representing a great development opportunity for the cannabis industry in Mexico and Latin America.

Openness of Civil Society

A significant difference between North America and Latin America lies in the openness of civil society and the work that thousands of activists have done to help people understand and differentiate between cannabis plants — hemp and marijuana — and the various components or cannabinoids that these plants have, as well as the applications that either plants or isolated cannabinoids may have.

For the global cannabis industry, this openness represents an immeasurable development opportunity. Unlike North America, in Latin America, there aren't dispensaries that sell plants with high concentrations of THC for medicinal purposes. On the contrary, these plants will be available only in those countries where recreational consumption regulations exist or those countries that are open to the recreational usage of cannabis, but also there are a few Latin American countries that contemplate cannabis production intended uniquely for legal foreign trade of the plants into international markets like those  in North America. The foreign market production and exportation process has spread widely in Latin America with countries like Argentina, Uruguay, and Colombia. All these countries have been gaining traction as producers of both hemp and marijuana plants for exportation into international markets.

Science And Technology

Recently, Mexico, Brazil, and Argentina have become leaders in creating research protocols to demonstrate the therapeutic potential of various isolated cannabinoids. This research development trend is due to the regulatory frameworks in those nations that have prioritized the medical uses of cannabis-derived products and have allowed many scientists to implement well-established research protocols to investigate these plants and their components. There is such a significant development for scientific research that Mexico already has a pre-clinical trial in cellular tissue related to the advantages of administrating CBD to reduce the effects of traumatic brain injuries. And in Argentina, there are already positive results from the administration of CBD in adult patients with epilepsy. These processes have been so significant that at the end of last year, US President Joe Biden signed an agreement to allow scientific research about cannabis at a federal level; this research act will enable Latin American scientists to take their expertise into new regions and expand their research.

Sales And Growth

If the points mentioned above were not enough to affirm that Latin America is leading the global cannabis industry, let's analyze the sales in this industry.

According to Grand View Research, the global CBD or cannabidiol market is valued at around US$5.1 billion, with an average expected growth of 16% by 2030, while Latin American markets expect an increase of 20.2% between 2022 and 2027.

Let's review these numbers and analyze the behavior of companies like HempMeds, which I work with. During 2022, the Latin American market represented 24% of the company's global sales. Only in Brazil, we experienced 13% growth in profit and an increase of 125% in orders, and we doubled the number of prescriptions, which positions Brazil as the market that ultimately leads the growth of our company. In the case of Mexico, we can highlight that it is the country with the most significant amount of research activity that uses our products to demonstrate their therapeutic potential and efficacy, and it is a very stable market. However, we also observe exponential sales and prescription categories growth for the Mexican market.

Also, markets like Argentina and Paraguay have always been vital for the growth of our company since those were the first markets in which we were able to obtain registrations for pharmaceutical products, which opened the door to start marketing new ranges of products throughout the world and initiate the sanitary registrations of our products in other countries.

From a general perspective, the Latin American cannabis market will be crucial for the development of the industry. Although there is still a lot to do regarding market maturity and legislative processes, we can be sure that those companies that do not take a greater interest in the region will see limited growth. On the contrary, those companies that already have operations in Latin America, while strengthening them, will lead the global industry entirely.