LONDON, Oct 4, 2018 /PRNewswire/ --
Over the past 24 months, the Latin American cannabis industry* has emerged from the shadows to command the attention of the international cannabis community as over ten major markets have legalised medical cannabis. Legal cannabis sales are worth $125 million in 2018, but that number is expected to rise to $12.7 billion by 2028.
The figure comes from the recently published The LATAM Cannabis Report™, by market intelligence and advisory group Prohibition Partners, who have analysed pricing, consumption and patient datasets in the region. According to the report, the majority of the market value will come from the medical cannabis sector, forecasted to be worth $8.5 billion by 2028.
The smart money is on Latin America
Positive public perception of the plant, coupled with radical efforts from pioneering countries such as Uruguay and Colombia have encouraged a wave of policy changes in the region, opening up the market to entrepreneurs, investors and international brands.
At the launch of the report, Stephen Murphy, Managing Director at Prohibition Partners explained:
"With the forthcoming legalisation of Canada's recreational cannabis market, all eyes have been on North America, but actually it's the Latin American region that has quietly been carving out industry firsts. Uruguay was the first country in the world to fully legalise cannabis and Jamaica was the first to legalise cannabis on religious grounds. Colombia has become one of the world's most attractive cannabis markets as international cannabis companies take advantage of favourable export laws. We believe that the expansion of a Latin American market will significantly impact the global cannabis industry, undercutting producers and pricing worldwide. Strong forecast population growth, a perfect climate for cannabis cultivation, bolstered by progressive legislation and regulatory change are set to ensure Latin America remains a very attractive prospect for cannabis companies, and investors."
While trailblazing countries have caught the majority of the limelight, the region as a whole hassubstantial commercial and political potential. Globally, a significant number of other countries are moving towards the legalisation of cannabis for medical use, while elsewhere the established national cannabis systems are maturing. Latin America is poised to meet the rising demand, but faces competition internationally. Investors and cannabis companies worldwide must now examine the true value of cultivation. Cultivation sectors in Germany and Canada come with high costs and significant barriers. As the Latin American cultivation market develops, it offers a low-cost alternative for licensed producers who are keen to reduce costs.
The consumer base in the region is equally substantial. Latin America has a prospective market of over 500 million adult use customers and 4.3 million patients, making it a core priority in cannabis companies' global strategy. Cannabis prices remain low, but this is set to change as legalisation and regulation continue to develop in the region.
"The low average cost of cannabis in Brazil is suppressing growth for Latin America's most populous country. We know that legal supply is perceived as being of superior quality and commands higher prices per gram, and the legalisation of recreational cannabis in Brazil would undoubtedly bring about stratospheric growth not only for the country, but for the region as a whole".
Key takeaways from the report
- Medical cannabis will account for more than two thirds of the legal cannabis industry in Latin America, worth an estimated $8.5 billion.
- The cannabis sector is set to grow by over 300% per year over the coming decade from an estimated $125 million in 2018, to $12.7 billion by 2028.
- Over 40 licensed producers are active in the region. Colombia has issued the most cultivation licences in the region, allocating 142 licences to date.
- Facility and construction costs are 80% lower than North America and Europe.
- Chile and Mexico will be engines of growth in the medical sector while Uruguay and Colombia will encourage regionwide recreational cannabis legislation.
- Patient numbers will increase significantly to over 4.6 million by 2028.
The LATAM Cannabis Report™ by Prohibition Partners provides detailed forecasts on market values, in-depth analysis of regulatory timelines and estimates of consumption across 11 key markets.
The report was published on 4/10/2018 and can be accessed at www.prohibitionpartners.com. Interviews with Stephen Murphy, Managing Director at Prohibition Partners, are available on request by emailing [email protected].
About Prohibition Partners
Prohibition Partners is the leading source of market intelligence and strategic insight into the international legal cannabis industry. We work with investors, entrepreneurs and regulators to identify, understand and qualify new opportunities in this emerging frontier.
Our reliable and credible insight is maturing the conversation and opening up the market.
*Cannabis remains illegal in some LATAM countries, please reference local laws in relation to medical, recreational or industrial use
SOURCE Prohibition Partners