An Overview of the Biggest Marijuana Players in South America
There has been a lot of buzz lately about marijuana reform in South and Central America. Although Uruguay will always hold the title for being the first country in the world to legalize recreational marijuana, the Green Wave is hitting the continent in one large swoop.
Canadian companies have already seen this opportunity, as South American partners and subsidiaries strike deals for the production and global export of (for now) non-intoxicating CBD.
But reform takes time. At the rate things are going, South America could become the next international cannabis hotspot. Of course, as 420 Intel points out, some spots are hotter than others.
Colombia’s medical cannabis market has been at the centre of the cannabis industry. Thanks to heavy investments from Canadian licensed producers.
Colombia’s ideal climate, cheaper labour and experienced employees (thanks mainly to its role in the illegal marijuana industry during the past) are perfect for growing marijuana. These factors mean that the cost of growing the plant is a fraction of the price in Canada and the U.S., which – in theory – would allow for lower sale prices that might compete with the black market in North America.
Despite significant leaps forward in public attitude toward marijuana, including the decriminalization of public marijuana consumption, Colombia might still need a few years before the public embraces full legalization.
Argentina’s marijuana framework is a little bit murky. Recreational marijuana is decriminalized in small amounts and when used on private property. Medical cannabis is “widely accepted,” but still federally illegal. However, the provinces of Santa Fe and Chubut legalized medical marijuana in 2016.
In 2017, the government approved the medical use of non-intoxicating CBD oil. Aphria quickly jumped on the opportunity, exporting 1,500 bottles of CBD oil to its South American subsidiary in 2018.
In the cannabis world, Uruguay needs little introduction. Although overshadowed by Canada and 11 U.S. states, Uruguay is still the first country to legalize recreational marijuana.
That being said, the country has some serious issues in that regard. For one thing, users have to register just to buy the drug, its potency is limited and – most recently – supply problems have made it difficult for even a fraction of registered customers to obtain marijuana.
Also, much like in the U.S., banks are skittish about dealing with the marijuana industry. But while U.S. banks are concerned about federal prosecution, banks in Uruguay fear international sanctions – something arguably much worse.
Still, businesses found ways to make the best of the situation. For instance, Aurora Cannabis acquired Uruguay’s ICC Labs in 2018, taking roughly 70% of the total marijuana market in Uruguay.
Mexico arguably takes home the gold in terms of its unique legalization initiative. As we mentioned in previous articles, Mexico’s legal system requires a law to be repealed if it is challenged and won five times in the Supreme Court.
Once the fifth case went in favour of the plaintiff, Mexico had no choice but to change its laws. They are now scrambling to meet an October deadline or they face the possibility of the Supreme Court writing the legislation on the government’s behalf.
However, the law was deemed unenforceable immediately following the ruling. But passing the legislation in only 90 days is just the beginning. The government will need much more time to set up a supply, regulatory framework, distribution and all the other key requirements for a functional legal cannabis system.
WeedAdvisor’s Interest in South and Central America
It is quite clear that marijuana reform is on everyone’s minds throughout the western hemisphere. Whether progressive and voluntary, like most of South America; or sudden and jarring, like the case with Mexico, it is clear that a largescale marijuana industry is about to boom.
WeedAdvisor, as always, aims to be at the centre of this multilayered event, offering a single platform to cover critical functions like point-of-sale, compliance, real-time data tracking and more.