Latin America has a complicated history with cannabis due to years of violence stemming from drug trafficking in the region. While many Latin American governments are finally taking steps to create legal markets for cannabis and CBD products, business opportunities for domestic retail sales are still limited. On the other hand, CBD products provide a welcoming alternative for countries with a high level of stigma towards marijuana and the importation of non-psychoactive oils avoids a competition with or diversion to the illicit market.
Existing CBD Programs in Latin America
Several countries, including Chile, Mexico, Colombia, Brazil, Argentina, Peru, and Uruguay, have implemented some aspect of medical marijuana programs, and these are largely resulting in greater opportunity within the CBD market. The structure of many of these programs requires that an individual receive a prescription for medical cannabis from their doctor and then government authorization to import products on their own behalf for treatment. In Brazil, such imports have been almost exclusively of CBD products, given that the Federal Council of Medicine has so far restricted medical cannabis imports to CBD products, and specifically to treat epilepsy.
Opportunities with U.S. CBD
Because CBD is not a scheduled substance in the United States many individuals have found that U.S. CBD brands are easier to import than Canadian CBD products, which are still considered scheduled products in Canada, thus adding another layer of difficulty to getting imports approved and the shipping process to Latin America completed in a timely manner. As such, for the near-term, U.S.-based CBD players will enjoy an advantage when it comes to imports to Latin America.
Additional opportunities for CBD in the region will come from nutraceuticals and topicals, which are already in market in Colombia and are likely to be on shelves in Mexico by the end of 2019 or early 2020. Khiron was the first mover in the Colombian market with its Kuida skincare line. Competition is likely to heat up in the near-term with new competitors entering the market. In Mexico, topicals are likely to be the first products on shelves, with CBD Life obtaining approval to import Foria’s Awaken CBD arousal spray. While beauty, skincare, and other personal care products are likely to gain traction in Latin America, and especially in Colombia and Mexico where a legal commercialization framework already exists, adoption will still be limited to the relatively small higher-income populations in the region.