Cannabis - Industry - South America Market, Share and Trends 2023-2028

Summary of Cannabis

The legal cannabis market in South America is in its nascent stages yet evolving rapidly. Countries like Uruguay, Colombia, Peru, Chile, and parts of Brazil have established medical cannabis frameworks in recent years, with some exploring adult-use legalization as well. South America’s regional cannabis market size is projected to grow from $3.18 billion in 2023 to $12.14 billion by 2029, at a CAGR of 24.23 % during the forecast period.

As regulations progress — substantial opportunities are opening across the cannabis supply chain from cultivation to manufacturing to retail. South America’s favorable climates and rich agricultural heritage make it well-suited for large-scale, low-cost cultivation to supply both domestic and international markets. Meanwhile, a young, increasingly progressive population bodes well for future consumer demand.

Early signs point to flower remaining the dominant product category for the foreseeable future, though extracts, edibles and infused products show promise as regulations permit. Medical-use cannabis is driving much of the initial commercial activity- with chronic pain, epilepsy and mental health indications primed for treatment.

As the industry matures— ancillary sectors like biotech partnerships, retail franchising, and agrotechnology solutions will also emerge. Regional companies are well-positioned to build reputable brands that address local needs. If managed responsibly— the legal cannabis market has potential for vast economic and social benefits across South America for decades to come.

Those able to navigate the nuanced regulatory environment and engage local stakeholders sensitively stand to gain a strong first-mover advantage in this emerging international hotbed for cannabis innovation. Continued monitoring will be key as the space evolves.

Recent Trends and Insights

Flower remains the dominant product across the region, particularly in countries like Colombia, Uruguay and parts of Brazil where medical or adult-use programs have launched. Improved cultivation techniques are enhancing quality and yield.

Extracts containing cannabidiol (CBD) are increasing in popularity for their non-psychoactive medical applications. Oils, tinctures and topicals are commonly available formats. Some countries like Chile have seen early adoption of infused beverages and edibles containing THC or CBD. Further regulation will impact mainstream potential.

Overall— the South American cannabis industry is nascent but evolving rapidly. Continued legal reforms across the region are expected to drive innovation in formats that address both medical indications and evolving consumer preferences. Those able to deliver consistent & high-quality products tailored to local needs may find early success in this emerging market.

Product Insights

Flower remains the top category currently, though extracts are gaining popularity for their precision and various form factors. CBD oils and tinctures have seen early success for their non-intoxicating wellness applications. These precise formats appeal for conditions like pain, inflammation and anxiety.

Local companies are experimenting with novel extraction methods to develop high-CBV and terpene-rich extracts for their unique medical profiles. THC-infused beverages show promise in countries like Chile, Peru and parts of Brazil that have adopted adult-use frameworks. Drinkables offer an alternative consumption method.

Edibles containing CBD or THC are also being trialled in certain jurisdictions, though regulations vary significantly by market. Gummies, chocolates and baked goods have attracted interest.

As the medical cannabis industry expands and regulations continue evolving across South America— we anticipate to see more localized product innovation that addresses both therapeutic needs and cultural preferences. Those able to deliver consistent & compliant formats at scale may achieve early leadership.

Key Companies

Some major players within this vast domain of industry are

• PharmaCielo
• Xebra
• Flora Growth
• One World Products (Formally One World Pharma
• Silverpeak
• Analitek
• Cannadrop Botanical Developments
• Aurora Cannabis
• Avicanna
• CBD LIFE

Regional Analysis

Argentina’s government is laying the groundwork to establish a domestic industry of regulated medical cannabis sales while eyeing the international market. The South American nation is targeting $500 million in local medical cannabis sales plus $50 million in exports by 2025, according to industry insights.

Uruguay has made international news when it became the first country in the world to fully legalize recreational cannabis – and in the years since – the majority of countries on the continent have passed legislation or lessened the legal penalties for marijuana possession, use and cultivation. Most have taken measures to set up legal, regulated medical cannabis programs. The situation across the continent for the most part still lags behind that of its neighbors in North America – but in recent years – legalization and normalization advocates in South America have had ample reason for optimism about what the future will bring.

Colombia’s cannabis exports were on pace to nearly double last year— as the South American country aims to meet demand in the small but growing international import market. Between January and November 2022— Colombia exported $8.4 million worth of cannabis, up 96% compared to the same period one year earlier, according to many research agencies.

In 2022— over 90% of Colomba’s cannabis exports originated from the departments of Bogotá, Cundinamarca and Antioquia. The government said another 12 regions have been identified as departments with high export potential for cannabis.

Market Segmentation

By Type:

• Medical cannabis
• Recreational cannabis
• Hemp-derived products (CBD, fiber, seeds, etc.)
• Cannabis-infused products (edibles, beverages, topicals, etc.)

By End user:

• Patients seeking medical treatment.
• Adult consumers for recreational use
• Industrial users (hemp-based products for various industries)
• Wellness and lifestyle consumers (CBD products)

By Vertical:

• Cultivation and growing operations
• Processing and extraction facilities
• Retail and dispensaries
• Ancillary services (consulting, software, packaging, etc.)
• Research and development

By Countries:

• Brazil
• Argentina
• Columbia

Our Methodology

We have offered a well-founded review of South America’s regional logistics market along with ongoing trends and upcoming projections to highlight proximate investment opportunities in this report. Moreover, an extensive analysis of any future prospects, challenges, competitors, or navigating aspects is also provided. A methodical detailed regional examination is presented.

Primary Research  

Our multi-pronged research approach includes interviews with industry leaders and a global survey of advanced manufacturing professionals to gain qualitative insights. We utilize our proprietary databases encompassing key performance indicators worldwide in order to collate relevant data points. A multivariate forecasting framework considering historical performance, current dynamics and qualitative factors are utilized to develop market sizing and growth projections through 2029.

We supplement our primary research with a careful examination of secondary materials such as– case studies, news stories and references from other sources. Organizations can benefit from the strategic advice and conclusions offered because they will be better equipped to respond to the dynamic nature of this industry and seize emerging possibilities.

We employ a comprehensive and iterative research methodology focused on minimizing deviation to provide the most accurate market estimates. Our research utilizes a combination of bottom-up and top-down approaches across segments and utilizes databases, primary research insights and industry experts for analysis.

Raw data is obtained from multiple sources and thoroughly filtered to ensure only authenticated and validated sources are considered. We collect data from raw material suppliers, industry associations, technology providers, and buyers to gain a holistic perspective.

Quantitative Analysis

Our market estimates are derived through statistical models, beginning with collection of historical data and analysis of macro- and micro-economic factors influencing the market. Gathered information on market dynamics, technology and pricing trends are utilised to build the models.

Econometric and technological models are applied to project short- and long-term market potential respectively. A bottom-up approach is preferred to minimize errors. Key parameters considered include market drivers and restraints, material pricing trends, regulatory scenarios, and capacity additions.

Weights are assigned to these parameters based on impact analysis and market forecasting is performed via statistical tools and techniques. We believe this methodology results in an accurate and realistic market picture.