Brazil’s medical cannabis market set to light up

Despite Brazil’s restrictive cannabis laws, the country is on course to become a billion-dollar market and a reference for the medical cannabis manufacturing industry. This is the view of Andres Fajardo, president of cannabis multinational Clever Leaves, and his firm is not alone in its optimism about Brazil’s medical marijuana potential. 

HempMeds Brasil — the first company to obtain permission to import cannabinoid-based medicines before health regulator Anvisa allowed domestic firms to import, produce and sell these pharmaceuticals locally last year — has recently launched new brand Hezium, specifically targeted at the Brazilian market.

And the growth is fostering other segments of the industry. Forbes reports that agricultural group Terra Viva is looking to grow hemp alongside its vegetable and flower crops in the city of Holambra, in São Paulo state. 

According to studies, the current market is just the tip of the iceberg. A study by cannabis startup accelerator The Green Hub indicates that, if Brazil were to pass favorable legislation for cannabis-based medication, the number of patients could reach a minimum of 959,000 in the first 36 months of approval. If a future law were to allow the use of medical marijuana for chronic pain patients, some 3.4 million people would be eligible to receive the medication, pumping the sector’s annual revenues to BRL 4.4 billion. 

Clever Leaves is more than ready to surf this wave. In November, the Colombian medical cannabis company signed a USD 4 million agreement with domestic firm GreenCare to supply them with an initial CBD-dominant product for three years. In January, they signed a similar agreement to become a supplier for Entourage Phytolab — an R&D company specialized in cannabinoids — for USD 11.4 million. 

And this is just the beginning. With the size of the market and the strict quality standards imposed by health surveillance regulator Anvisa, Mr. Fajardo believes Brazil has what it takes to become a premium medical cannabis manufacturer even before federal restrictions on cultivation are reviewed. He shared his views in an exclusive interview with The Brazilian Report. See the main highlights below. 

*This interview has been edited for brevity and clarity.

I gather that the partnership with Entourage Phytolabs is not your first foray in Brazil. So why are you interested in a country with such strict cannabis regulations?

I would say Brazil is one of the most attractive markets to us. There are two dimensions to the way we assess a market, the way we assess an opportunity. Number one, how big and attractive it is from an economic perspective, how large profits can be. And frankly, we believe Brazil will be one of the most important markets globally. We see a market that’s probably going to reach a billion dollars as soon as three to five years from now.

You see different numbers in different places, but we are probably talking somewhere in the range of three to five million patients in the next three years. We see different surveys...