When reporting on the hemp industry, it’s not uncommon for Latin American markets (LATAM) to be left out of the conversation entirely. This is largely the case because it is believed that LATAM hemp is in its early infancy. But, in reality, societal views towards hemp and its potential as a cash crop have begun to shift in pockets from Uruguay to Mexico. This progress has not been without obstacles, however.
According to an LATAM market report by the Brightfield Group, hemp-derived cannabidiol (CBD) sales could reach as high as $448 million by 2023. Although medical cannabis is deemed legal in multiple countries across LATAM, projected sales lag far behind CBD at $109 million by 2023. This massive divide can be attributed to negative views toward cannabis, which has long been tied to violent drug cartels.
Although it may be disappointing that cannabis legalization is a way off, hemp is not subject to the same stigmatization because it contains much lower THC levels, leading to a different classification altogether in the mind of society and the policies of government. In Mexico, for example, the legality of CBD products with <1% THC has increased access and boosted the market considerably.
And, in Uruguay, which fully legalized cannabis in 2013, the hemp market has blossomed, priming Uruguay to become one of the largest exporters of hemp-based products within LATAM in 2020–especially with increased investor interest in launching hemp-growing operations across the country. Up-and-coming hemp markets can also be found in Mexico, Peru, Chile, and Paraguay. Another stand out example is Colombia, where CBD products can be legally purchased through government-licensed retailers. Suffice it to say, interest in hemp products, such as CBD, is increasing across multiple LATAM nations.
Long-term projections indicate that, as in the US, skincare and beauty products are likely to take the lead in sales in LATAM. And, due to lower cost of these products, it is likely that interest among consumers will continue to grow.
Although it’s too early to make concrete predictions, hemp’s future in LATAM appears to be a bright one. As more LATAM countries continue to re-evaluate their legal stance on cannabis, the possibility of a robust hemp market coming to fruition becomes even more likely. In the interim, one can only hope that LATAM countries with fledgling markets will be able to find willing foreign investors to bolster a newly found industry.
Image Credit: Robert6129