Cannabis investments blazing in Brazil

The use of cannabis for recreational purposes remains taboo in Brazil, with the majority of the population still against legalizing the drug. However, regulators are slowly changing the landscape of medical marijuana. A ruling from Brazil’s Sanitary Surveillance Agency (Anvisa) allows companies to produce and sell cannabis-based medications, including in pharmacies. Growing cannabis remains off-limits, however, forcing companies to import the plant extract, requiring high investments and favoring Big Pharma.

But regardless of its limitations, this new ruling should further boost investments in the cannabis market—which have silently been creeping up in recent months. Since October, Brazilian asset management firm Vitreo has launched not one, but two investment funds focused only on projects concerning cannabis—becoming the first firm to do so. 

At first, Vitreo’s Canabidiol FIA IE was created to invest in overseas companies, which, according to the rules of Brazil’s Securities Commission (CVM), makes it available only to corporate investors. To cater to an overwhelming demand from retail investors, Vitreo created Canabidiol Light FICFIM shortly thereafter. “It puts 20 percent of its capital in the first fund,...