It seems that lately, everyone is looking to legalize cannabis in their respective countries. With so many blooming markets, the options for business expansion and investments seem endless. One surefire way to choose the best industry is to look at the countries that are moving through legalization quickly.
Latin American countries have been at the forefront of the cannabis legalization movement, with Uruguay being the first country in the world to completely legalize the plant. It seems that Uruguay’s neighbors are taking a page out of their book and starting to decriminalize cannabis as well. One of the key players in this mix is Peru. With vast farmland, perfect climate, and a population eager for legislation, Peru could be the next big cannabis market.
What is legal right now
In November of 2017, Peruvian government passed a bill which legalized the use of medicinal cannabis.
Alberto de Belaunde, a member of the PPK party, proposed the bill. Shortly after its proposal, President Kuczynski acknowledged and signed the bill. The law regulates the THC components of the plants, outlines growing licenses, distribution licenses, prescription licenses, and how the drug can legally be consumed.
However, the government didn’t fully approve the legislation until a year and half later, in February 2019. Although it took the government a while to finalize the bill, Peru is still moving at a relatively fast pace compared to some of its South American counterparts.
Furthermore, possession of cannabis is also legal in Peru. The law states that if it will be personally consumed, and the quantity is less than eight grams, the person won’t be charged. However, recreational use and growing/selling of the plant remains illegal.
Obtaining a permit
Currently, the Ministry of Health and the Ministry of Agriculture are in charge of distributing permits. However, since there is such high demand for medicinal cannabis in Peru, the agencies are recruiting as many growers as possible. As of now, the Peruvian cannabis market offers the following permits:
- Wholesale import or commercialization
- Retail commercialization
In general, all these permits are under the regulation that the cannabis being studied, produced, or sold is strictly for medicinal purposes.
Additionally, activists are still fighting for the right to grow their own cannabis. Associated cultivation for patients and doctors is the focus for many Peruvians involved in the movement these days.
Peru’s cannabis market potential
The cannabis market in Peru has great potential. Already, businesses predict that 2.5 acres of crop will generate US$1 million in medicinal cannabis sales alone. Additionally, the number of growers in Peru could increase due to the temperate climate and welcoming coastline. At first, the total area allowed for cannabis plantations in Peru was around 24 acres. The industry will to grow to such an extent that experts are predicting plantations could occupy over 7,000 acres in the country.
While businesses are happy to help Peruvian patients that need the drug, their focus is on exportation. Peruvian growers are looking to foreign markets’ demand for cannabis to fund their practices and make them rich. Notably, with the recent shortage of cannabis supply in the North American market, Peru can fill these needs.
Cheap costs, high profits
Opportunity lies in producing cannabis and cannabis products. All together, the low cost of land, low level of investment required, and the nearly year-round growing season makes cultivators eager to open up business in Peru. The low-cost aspect of growing cannabis in Peru is very attractive to international companies. Ultimately, this leads to higher margins on exports and sales of cannabis.
The cannabis industry is blooming all over the world, especially in Latin America. Major opportunities for investment and business expansion lie within this market and suggest a favorable return. The best way to move into the industry is to work with the team that knows it front and back: Biz Latin Hub.
With extensive experience in back office and commercial representation services in Latin American markets of all types, Biz Latin Hub can ensure a smooth transition for your business into new industries. Contact us at [email protected] to learn more about this exploding industry and how to get involved.