Today is 4/20, kind of a marijuana day. At what point is this business in the country? We tell you a story to understand it:
“When I lost my dog I was in Mexico, I knew about the use of cannabis products for pets that I could have access to in California, but in my country I couldn’t get them. That is how I decided to capitalize on my experience in the cannabis industry and my love for animals to make a line of products for dogs”, explains Rodolfo.
Currently, Canninus has a portfolio of four consumer products for dogs, a shampoo and a leash, which are made from ingredients and THC-free cannabis ingredients, From Colorado, California. His goal is to market them in Mexico through independent distributors, retailers and his online store.
Until that moment arrives, Rodolfo – like many Entrepreneurs in the Cannabis Industry – perfects its business model to launch it to the market, while maintaining the expectation about the advances in legislation that allow them to enter the market with all of the law.
Marijuana derived products
In this sense, you should know that to date more than 50 industrial products based on olive oil hemp (which contains the famous CBD) have requested the endorsement of the Federal Commission for the Evaluation of Sanitary Risks (Cofepris) for its commercialization, export and import, but only 38 have obtained it.
What products are we talking about? Of medicines, cosmetics, gummies, infusions, beverages and food supplements, which belong to four Mexican companies, two American and one Spanish.
Pending legal marijuana industry in Mexico
Despite the progress, there are certain pending issues to be resolved to give the industry a ‘sprint’, such as the lack of a legal framework that establishes the rules for the production, import, marketing and use of cannabis for medicinal purposes in our country.
“It was supposed to be voted on October 31 (2019), but an extension was requested and it will be pushed for a few more months. Once we have the regulations, business opportunities could be expanded for many,” explains Lorena Beltrán, general director of CannabisSalud, co-founder of Endonatura Labs and president of the new Mexican Association of the Regenerative Cannabis Industry.
For now, the entrepreneurs in the field recognize that there is a “gray market” that has grown due to the lack of this regulation, before which many have resorted to ‘amparo’ to be able to operate.
“Officially we could already operate, but there are still no regulations; That is why we say that it is no longer a black market, but a gray area. This encourages countless products to be sold online, but without the endorsement of Cofepris, which is a risk for the consumer,” adds Lorena.
As you can see, Mexico follows the inertia of other countries that already have legislation on the marijuana market.
150,000 MILLION DOLLARS annual sums the global market. It is expected that by 2025 the legal market will reach 166,000 million dollars / Image: Shutterstock
A growing market
The cannabis industry is growing all over the world and Mexico is no exception. According to the study Getting into the topic: CBD and Cannabis in Latin America Report 2019 the national market amounts to 18 million dollars and by 2023 it will reach 258.
Colombia, Peru, Brazil and Chile are on the same path and in the next four they will be, together with Mexicothe most important markets in Latin America driven mainly by products made from CBD specialized in beauty and personal care.
What happens in the rest of the world? Something similar; so much so that a report by the rating agency Standard & Poor’s, made with data from the consultancy Euromonitor, reveals that the global market is equivalent to about 150,000 million dollars annually, being alcoholic beverages, soft drinks and beauty products. By 2025, the legal market for Marahia is expected to reach 166,000 million dollars.
And the legal market?
According to the report, approximately 10% of the world market is illegal, which could change in the coming years due to stricter regulatory frameworks in more countries. Where will you see the most growth? In Canada, the United States, Western Europe and some South American nations.
For now, there are more and more countries where the consumption of marijuana for recreational or medical purposes is legal; Mexico, Canada, the Netherlands, India, Israel, Chile, Australia, the Czech Republic, Uruguay, Colombia, Costa Rica, Spain, the United States, Jamaica, and Portugal stand out.
Obviously, there are some restrictions; For example, in Mexico personal consumption is decriminalized; legal medicinal and scientific use with up to 1% THC; and legal cultivation for medicinal and scientific use and personal consumption. In Colombia, a maximum of 22 grams per person and legal sale and distribution for medicinal and scientific use and legal cultivation for personal consumption are allowed, up to twenty plants; while in the Netherlands it can be consumed in certain places and possession of up to five grams is tolerated.
Opportunities in sight
Although in other countries the large cigarette and soft drink companies are already betting on CBD-based products, there is talk of a ‘grey market’ to which not everyone turns ugly. What’s more, there are those who already trade under the figure of ‘protection’ and the most daring in hiding.
“Juan”, for example, has his own crops at home, with which, based on trial and error, he has developed his own cannabis essential oils. He sells them through the Internet or through WhatsApp groups where he already has recurring consumers.
He does not manage to say what the concentration or purity of his product is, but he assures that his CBD extraction technique guarantees an oil with properties against rheumatic pain and migraine, for example.
Rules to get into the ring
At the moment, it does not have the infrastructure to become professional in the marijuana market, but it does not doubt that as soon as there are clear rules it can enter the ‘ring’ with other competitors.
On the contrary, there are companies that operate completely legally, such as Hemp Meds México, the first company to have the endorsement of Cofepris to import a CBD-based product.
Its president for Mexico and Latin America is Raúl Elizalde, who went from being an activist to a businessman after obtaining an injunction in 2015 so that his daughter Grace – diagnosed with Lennox-Gastaut syndrome – had access to cannabis oil for medicinal purposes.
After this feat, Raúl continued his activism and in 2017 contributed to the modification of the General Health Law in Mexico to allow the consumption, sale, cultivation and importation of cannabis for medicinal purposes.
“We are one of the few countries that recognize the therapeutic qualities of THC, but not having a regulation harms the industry because it makes it difficult for more pharmaceutical or industrial products to be introduced,” says Raúl.
The lawyer, too, believes that ideally the regulation should include guidelines for three types of marijuana market: recreational or recreational, pharmaceutical or medicinal, and industrial (which includes CBD-based or non-psychoactive products).
Are there business opportunities?
Raúl and Lorena agree that it is, but they warn that some may be cut short by the lack of information from the consumer and from the authorities, starting with the fact that many are unaware of the differences between CBD and THC.
Both substances are derived from cannabis, but while CBD is one of the many cannabinoids found in hemp (cannabis plant with less than 1% THC); THC is a psychoactive component of the plant.
“There are hundreds of companies ready to start in different fields: from the farmer to the manufacturer, but it is difficult to undertake at this time. Cofepris is very closed and there is no progress for anyone. My company Endonatura Labs was one of those that obtained import permits from Cofepris, but there was a change of government and the process was halfway done. Now Cofepris has us stopped; everything is very closed ”, indicates Lorena Beltrán.
Despite this, entrepreneurs are confident that there will soon be a regulation that will boost the marijuana industry, which has room for entrepreneurs who are committed to legality.
Know your competition in the marijuana industry
If this is your goal, start by informing yourself, knowing the regulation, knowing who the competitors are, locating the suppliers and mapping the consumer, recommends Raúl. Also make alliances and join the guild.
“Everyone wants to get into the cannabis business, but not everyone takes into account that to be successful it is best to do it from where they are experts. For example, if you are a lawyer, specialize in consulting for these companies; if you have a packaging trader, do something special for the industry,” he adds.
Finally, remember that although the marijuana industry is still young, it is evolving at great speed, which is why it requires dynamic and innovative entrepreneurs.
18 MILLION DOLLARS is the national market value. By 2023, it is estimated that it will reach 258 million dollars / Image: Shutterstock
Cool Marijuana Startups
HempMeds Mexico
It is the distributor of Medical Marijuana, Inc. It was the first company in Mexico authorized by Cofepris to import hemp oil rich in CBD and free of THC. It operates in Argentina, Brazil, the United States and some countries in Europe and Asia. Their hemp crops are in the Netherlands.
Endonatura Labs
Company dedicated to the importation of inputs derived from cannabis. Your provider is in the Czech Republic. It is qualified to provide inputs to the industry or to make various products. You don’t have permission to import yet.
Canninus
It specializes in the manufacture of supplements and accessories for dogs. Their flagship product is a TCH-free CBD-rich oil. They recommend it for anxiety problems, epilepsy and seizures. It will be sold in Mexico through independent distributors.
