We all know that the battle for cannabis legalization is a fierce one, especially in North America and Europe. Yet, over the past few years, Latin America has been trying to join the big cannabis league. Several investments are pushing the region into becoming the lead supplier of cannabis. It’s worth taking a look at how things are evolving in Latin America.
The Road To Freedom
Uruguay was one of the first Latin American countries to legalize marijuana. The decision created a shockwave that resulted in other countries following in Uruguay’s footsteps. Between 2015 and 2017, more countries have begun the process of accepting weed. Those countries are Mexico, Argentina, Colombia, Peru, Chile, and Paraguay. Nowadays, those countries have more relaxed laws on medical cannabis and hemp products.
An Overview of the Latin American Trading Sector
Latin America is famous for its vast, open lands perfect for agriculture. And that is exactly what attracted over $161 billion in investments in 2017. The result is that now Latin America is seen as one of the biggest trade regions in the world.
One of the first companies to begin investing in South America is Finest Labs. This Canadian company entered the Latin market in July 2018. They were one of the first to take advantage of everything the land has to offer. That includes a favorable growing environment and low production costs. The floodgates were opened and more companies have soon followed.
Another important moment is when Aphria acquired a whole network of cannabis businesses. In a quick $193 million move, Aphria became one of the most well known Latin American players.
The Rise of Colombia
Colombia is quickly rising among the leading suppliers of marijuana. That is the result of its government’s support in the upcoming industry. There are now five resolutions that focus on regulations for individuals and companies.
Colombia is not the first country to legalize cannabis, yet it has a few good-looking perks. Those include low production costs, a good climate, and a progressive legal ground. It’s easy to see why Colombia is sought after by investors.
Peru Weed Legislation
When it comes to Peru, things are a bit different. Even though the government regulates the use of cannabis, debates still exist and entrepreneurs are waiting for any law changes. Everybody wants to invest in what might become the largest Latin American producer.
One of the biggest advantages of Peru is that the environment is similar to Colombia. It will not be hard to expand from one country to another, and entrepreneurs are looking toward that. It’s clear that relaxing the laws will open the way for new investments and opportunities.
The Volatile Mexican Black Market
To combat the cannabis black market, the Mexican government legalized weed in 2017. The law allows the importation and sale of products with less than 1% THC concentration. Not only that, but the production of cannabis derivatives is also allowed under the same law.
Canadian companies are looking toward Mexico as their new expansion grounds. With 12 million patients for medical cannabis, Mexico is building up its role as the new leading market.
Uruguay and the Early Adoption of Cannabis
As a result of being the first to legalize weed, Uruguay is slowly becoming a leading player in the market. However, because of its unfavorable geographic position, Uruguay has not received any significant investments. That is about to change, as Silverpeak Life Science suggests that the country could receive a $35 million funding. The money would be invested in building a new extraction facility.
Analysts conclude that Uruguay could reach $1 billion in annual exports of cannabis. That was possible in just 5 years since its legalization. It all depends on whether or not Uruguay can convince entrepreneurs that investing in it is worth a try.
Paraguay’s Behemoth Production
Paraguay is the leading producer of cannabis in the whole of Latin America. That is a result of their acceptance of cannabis in May 2019. The import of cannabis oil is now under the strict control of the health minister.
The vice president of Paraguay has stated his support for the import of cannabis seeds. It’s easy to see the overwhelming support and push for cannabis in Paraguay. However, until now, there has been no study to determine the impact it had on local society and the economy.
The Bottom Line
In conclusion, investing in Latin America is proving to be a great opportunity. It’s amazing to see so many countries embracing cannabis and moving away from black markets. With further support, it’s safe to say that many countries will soon follow.
The Latin American market will continue to grow and expand over the next few years. While Paraguay and Colombia seem to be the biggest winners, we never know who will topple them. It will be interesting to see who comes on top and becomes the leading supplier of marijuana in the region.