The Latin American cannabis sector has been tipped to grow to $12.7 billion by 2028 as 11 major markets have legalized marijuana production.

The industry is worth just $125 million in 2018, but is forecast to grow 300% year-on-year over the following decade.

Prohibition Partners’ LATAM Cannabis Report reveals that the industry is worth just $125 million in 2018, but the market intelligence company claims it will enjoy 300% year-on-year growth over the following decade. Mexico, Brazil, Argentina, Colombia, Chile, Uruguay, Paraguay, and Panama are all producing medicinal cannabis, and Prohibition Partners also lumps Jamaica and the Cayman Islands in with them.

It forecasts that this region has substantial commercial and political potential to dominate the burgeoning cannabis industry. Canada and Germany are bidding to emerge as world leaders, but costs are lower in Latin America and there are fewer barriers to overcome, said the LATAM Cannabis Report. That makes the region a strong low-cost alternative for licensed producers that aim to keep costs down and pass savings onto patients.

“The expansion of a Latin American market will significantly impact the global cannabis industry, undercutting producers and pricing worldwide,” said Stephen Murphy, managing director at Prohibition Partners. “Strong forecast population growth, a perfect climate for cannabis cultivation, bolstered by progressive legislation and regulatory change are set to ensure Latin America remains a very attractive prospect for cannabis companies, and investors.”

The costs of running greenhouses and producing cannabis in Latin America are said to be 80% cheaper than in Europe or North America. Uruguay is already a pioneer as it was the world’s first country to legalize cannabis for recreational use. Along with Colombia, it is expected to serve as a model that encourages neighbours to roll out recreational use, while Mexico and Chile are tipped to be the key drivers of medicinal marijuana growth in Latin America.

There are 500 million adults that use cannabis in the region, according to the report, and 4.3 million patients. That patient figure is poised to skyrocket in the years ahead. There are more than 40 licensed producers in the region, and it has become a key battleground for leading Canadian firms that have their hearts set on global domination. The smart money for investors will be in Latin America, if this report’s predictions prove correct.

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