- Colombian medical marijuana seen worth $720-million in 2028
- Per-person medical pot spending in Colombia forecast to double over 10 years
- AltaCorp estimates 0.2 pct of Colombians will buy medical cannabis this year vs 1 pct in Canada
The annual medical marijuana market in Colombia is on track to reach $720-million by 2028 and Canadian-based companies that are already established there will likely benefit from “first mover” advantage, despite the relatively low spending power by local residents, AltaCorp Capital said.
Cannabis producers are increasingly investing in Colombian production as well as other Latin American countries closer to the equator, where it is substantially cheaper to grow and harvest the crop than in northern countries like Canada.
AltaCorp estimates conservatively that only 0.2 per cent of the Colombian population will buy medical cannabis in 2019, with per-person spending at $414, compared with 1 per cent in Canada at more than quadruple that at $1,954 a person during the year.
The Calgary-based investment dealer said it expects market penetration in Colombia will grow to 1.7 per cent by end-2028 as the benefits of medical pot become more widely known.
“We based our assumption on relatively lower purchasing power of Colombians relative to Canadians. However, we assume this to increase 8 per cent (compound annual growth rate) over the next 10 years to reach $828 by the end of 2028,” AltaCorp said, referring to per-person spending.
“Given the early stage of the medical cannabis industry in Colombia, we expect those companies who make the first move should be in a relatively advantageous position to capture the share of the available market.”
Khiron Life Sciences Corp., Pharmacielo Ltd., and privately held Avicanna – which are all headquartered in Canada but operate primarily in Latin America – are focusing on acquisitions that will expand their patient bases by forming relationships with medical professionals and opening clinics in Colombia, AltaCorp said.
“We believe that companies with similar strategic focuses will be in a strong position to capture a significant portion of the overall market in Colombia over the long-term,” AltaCorp said.