Production and marketing of medicinal cannabis derivatives
Production and marketing of medicinal cannabis derivatives
Business Model Description
Having more players in the marketing and pharmacological or artisanal production of cannabis derivatives with or without the cultivation of cannabis plants, as well as research and importation of cannabis and its derivatives, exclusively for medicinal and therapeutic purposes.
Expected Impact
Having natural plant-based medicine that benefits the health of the population
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Macroregion Selva
- Macroregion Sur
- Macroregion Norte
- Region Lima y Callao
Sector Classification
Health Care
Development need
- 76% of the population has chronic health problems, and 33.6% have caloric deficits (3).
- 97.65% of the healthcare facilities in the PNA are inadequate (4).
- The rate of potentially avoidable premature mortality is 32.2%, with 418.4 deaths per million inhabitants due to COVID (5).
- Between 10% and 20% of Peruvians are excluded from access to the healthcare system (11).
Policy priority
- The National Plan includes measures to strengthen interventions for preventing and controlling chronic malnutrition, anemia, and immunopreventable diseases.
- The National Multisectoral Health Policy 2030 establishes healthcare and health attention, as well as interventions on the social determinants of health.
- The Multisectoral Strategic Plan 2030 focuses on making Peru a healthy country.
Gender inequalities and marginalization issues
- 44.3% of women reported suffering from a permanent ailment, which is 9.7 percentage points higher than men (6).
- Deaths due to central nervous system diseases accounted for 6.3% in women and 5.5% in men (6).
- 16% of Peruvians living in urban areas and 5% in rural areas had access to high-complexity and quality medical centers (11).
Investment opportunities introduction
- Peru has a multi-year investment program in the health sector, amounting to S/ 24,769 million for 2023 (7).
- Between 2009 and 2022, S/ 6,732.7 million has been invested in health through the Oxi modality (8).
- There are 6 health investment projects for an approximate sum of US$ 827 million (9).
- Ensuring access to quality healthcare and services is an objective of the Ministry of Health (MINSA).
Key bottlenecks introduction
- It is estimated that there is one doctor for every 390 inhabitants and one nurse for every 368 people in the entire country, with the majority of doctors located in Lima.
- There are only two ICU beds for every 100,000 people and 700 intensive care doctors. The WHO recommends 45 healthcare workers for every 10,000 people (10).
Health Care Providers
Development need
2% (660,000) of Peruvians suffer from epilepsy, of which only 15% receive care. 7 out of 100,000 Peruvians suffer from multiple sclerosis. Approximately 23,000 people use cannabis for chronic pain treatment, and importing this product typically costs between $300 to $400 per bottle. Only 7,000 were purchasing their medications from authorized establishments (13).
Policy priority
The government's policy for 2026 and the vision for Peru in 2050 promote an effective, sustainable, and accessible healthcare system to improve patients' health.
Gender inequalities and marginalization issues
44% of HIV infection cases in Peru over the last 5 years were reported in Lima, followed by Loreto (7%), Callao (6%), La Libertad (6%), Ucayali (5%), Piura (4%), and Arequipa (4%), which together account for 75% of the total cases nationwide.
Investment opportunities introduction
Since 2017, Peru has legalized the use of medical and therapeutic cannabis. Since then, various organizations and companies like Fundo IBIS, Organical, and others have been making investments in this sector.
Key bottlenecks introduction
While the regulation of cannabis in Peru has been in effect since 2017, it wasn't until 2023 that the Supreme Decree (DS) regulating this law was approved. Consequently, there are still some disagreements in the regulations that are slowing down the growth of the sector.
Health Care Distributors
Pipeline Opportunity
Production and marketing of medicinal cannabis derivatives
Having more players in the marketing and pharmacological or artisanal production of cannabis derivatives with or without the cultivation of cannabis plants, as well as research and importation of cannabis and its derivatives, exclusively for medicinal and therapeutic purposes.
Business Case
Market Size and Environment
USD 50 million - USD 100 million
15% - 20%
The main markets for medicinal plants are developed countries (Germany, China, Japan, Spain, the United States, France, Italy, and the United Kingdom). The market for these products generated sales of around 30 billion dollars in the year 2000, with an estimated annual growth rate of 5 to 15%, depending on the regions (12).
In 2020, the global medicinal cannabis market was valued at $9 billion and is projected to reach $49 billion by 2028, with an annual growth rate of 24%. In LATAM, this market represented $1.2 billion in 2022 and is expected to reach $3.75 billion by 2027, based on the same global annual growth rate (15).
It is projected that the global cannabis market will witness a CAGR of 14.5% during the forecast period (2022-2027) (18).
The Peruvian market for cannabis derivatives for medicinal or therapeutic use is valued at between US$90 million and US$100 million annually (21).
Indicative Return
20% - 25%
At the global level, companies like JuicyFields raise between 50 and 2,000 euros, and after 108 days, the time they consider necessary to prepare and distribute a cannabis harvest, you can receive an economic return ranging from 68 to 1,200 euros depending on the plant (21).
In Peru, trade facilitation could potentially generate up to 1.5 billion dollars for the country in the next five years (25).
Investment Timeframe
Short Term (0–5 years)
The company R Coorp plans to invest $25 million in a cannabis plantation in Lambayeque and expects to recover that investment within a period of 3 years.
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - Limited Investor Interest
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Approximately 2% (660,000) of Peruvians suffer from epilepsy, and only 15% receive care at the Institute of Neurological Sciences. Many patients from different regions of the country are referred to this center for treatment (1).
35% of the Peruvian population suffers from chronic pain (1).
In Peru, there are approximately 23,000 people who use cannabis for the treatment of chronic pain (13).
Gender & Marginalisation
82.6% of the elderly female population has some form of chronic health problem, while in the male population, 69.9% suffer from such issues (23).
Urban women are the group most affected by chronic pain issues (23).
Only 7,000 people who use cannabis purchase their medications from authorized establishments (20).
Expected Development Outcome
By 2050, achieve the full development of people's capabilities, leaving no one behind, and to do this, it is necessary to ensure quality healthcare services.
Reduce the years of healthy life lost due to non-communicable diseases (24).
Job creation - ACM has projected that a total of 250,000 formal job positions will be generated, including both direct and indirect employment. One-fourth of these would be direct jobs (25).
Gender & Marginalisation
Universalize access to this type of medicine for the entire population, regardless of their socio-economic status.
Improving the quality of life of the population is one of the objectives of "Perú Saludable" (24).
The employment generated in the agricultural industry will be formal, with 90% of the hired jobs being permanent. This will lead to the creation of 0.55 non-agricultural jobs for every agricultural job, with 55% of the employment being held by women, distributed similarly between agricultural (54%) and non-agricultural (55%) positions (25).
Primary SDGs addressed
3.4.1 Mortality rate attributed to cardiovascular disease, cancer, diabetes or chronic respiratory disease
Currently, Peru is working on policies to improve the quality of healthcare in the population through the "Healthy Peru" policy.
Cannabis has an impact on various diseases such as HIV, Parkinson's, chronic pain, multiple sclerosis, epilepsy, depression, anxiety, among others (25).
13.2.2 Total greenhouse gas emissions per year
Peru's CO2 emissions in 2021 amounted to 55,144 megatons, ranking the country 129th in the list of countries by CO2 emissions out of 184 countries, with countries ordered from least to most polluting (30).
Each hectare of hemp absorbs between 20 and 30 tons of CO2 from the air per year, and once harvested, each ton of cannabis will sequester an additional 325 kilograms of carbon dioxide in its tissues (27).
8.3.1 Proportion of informal employment in total employment, by sector and sex
At the end of 2022, there were 432,000 more informal jobs in Peru compared to 2019, representing 13% of the total employment.
ACM (an agribusiness consulting firm) has projected that a total of 250,000 formal jobs, including direct and indirect positions, will be created (29).
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Public sector
Indirectly impacted stakeholders
People
Corporates
Outcome Risks
Market risks: the demand for cannabis could be lower than expected, which could result in financial losses for producers and traders.
Legal risks: Pending regulatory aspects in the sector, as the current cannabis regulation poses a risk to this industry by allowing production through associations of natural persons.
There is also the possibility of cannabis crops being lost due to unexpected weather conditions or pest attacks.
Impact Risks
Investing in the production and marketing of cannabis can be expensive due to the need to meet security, compliance, and regulatory requirements.
Gender inequality and/or marginalization risk: Generation of inequities in access to medicine due to the costs it may incur if it becomes highly demanded.
Impact Classification
What
A positive and significant outcome due to the potential of the industry, which impacts job creation and the environment, along with an improvement in the quality of life for people.
Who
To the Peruvian population, who will benefit directly and indirectly from this industry. It will help revalue medicinal plants and preserve ancestral knowledge
Risk
Lack of cannabis consumption due to its association with drug use. Regulatory aspects, as while there is a law, there are still pending issues to address.
Impact Thesis
Having natural plant-based medicine that benefits the health of the population
Enabling Environment
Policy Environment
The National Multisectoral Health Policy by 2030 "Peru, Healthy Country" promotes the improvement of the quality of life of the population without discrimination.
The National Multisectoral Health Policy establishes the health care and services that individuals, families, and communities receive throughout their lives, based on the "Comprehensive Care throughout the Lifespan" approach.
National Plan: Policy Measure 2.9: Strengthening health interventions to prevent, monitor, control, and reduce chronic malnutrition, anemia, and vaccine-preventable diseases.
Financial Environment
Financial incentives: Euromonitor reports that the medicinal cannabis category was the most dynamic in Latin America, with a 27% growth in 2021. It projects a 91% annual growth in the next 5 years (32). Companies are already predicting that 2.5 acres of cultivation will generate US $1 million in sales of medicinal cannabis alone (33).
Fiscal incentives: It is estimated that with the cannabis industry, tax revenue will increase by approximately US $500 million annually, as it is a formal activity (29).
Other incentives:. The number of producers in Peru could increase significantly. The total area permitted for cannabis plantations in Peru is approximately 24 acres. The industry is expected to grow to the extent that experts predict plantations could occupy more than 7,000 acres in the country (33).
Regulatory Environment
Law 30681, a law that regulates the medicinal and therapeutic use of cannabis and its derivatives
Supreme Decree No. 004-2023-SA, which approves the Regulation for the Medicinal and Therapeutic Use of Cannabis and its Derivatives.
Marketplace Participants
Private Sector
Currently, there are several companies in the cannabis market in Peru, such as Fundo Ibbis, Cann Farm Perú, Organnical, and Cannabis & Co, which is a pharmacy specialized in providing medicinal products derived from cannabis.
Government
With the improvement in cannabis-related regulations.
Multilaterals
In 2020, the United Nations formally recognized the medicinal benefits of cannabis (34).
Non-Profit
In Peru, associations such as ASOPECANNA, the Federation of Medicinal Cannabis (FECAME), and Cannabis Gotas de Esperanza have been formed to advocate for the unique needs of the emerging cannabis industry.
Target Locations
Macroregion Selva
Macroregion Sur
Macroregion Norte
Region Lima y Callao
References
- (1) MINSA (2022), El 2 % de los peruanos sufre de epilepsia, consultado 02.03.23.
- (2) MINSA (2020), Siete de cada 100 mil peruanos sufren de esclerosis múltiple, consulta 02.03.23
- (3) Instituto Nacional de Estadística e Informática (2022) - Encuesta Nacional de Hogares.
- (4) MINSA (2022), Diagnóstico de Brechas de infraestructura y equipamiento en el sector salud
- (5) Organización Panamericana de la Salud (2021), Perfil de Perú.
- (6) INEI (2022), Brechas de Género en el Perú.
- (7) MINSA (2023), Ministra Kelly Portalatino sustentó el proyecto de presupuesto del sector Salud para el Año Fiscal 2023.
- (8) Dirección de Inversiones Descentralizadas - ProInversión (2022), RANKING DE DEPARTAMENTOS POR MONTO DE INVERSION EN OBRAS POR IMPUESTOS 2009 - 2022.
- (9) PROINVERSIÓN (2023), Cartera de proyectos de inversión modalidad Asociación Público Privada.
- (10) International Trade Administratiton (2022), Guía Comercial de Perú.
- (11) Hart, Spencer (2021). "Lack of Access to Quality Healthcare in Peru". Resumen de Ballard..
- (12) PAHO (2019), Situación de las Plantas Medicinales
- (13) Ojo Público (2022), El último y complicado tramo hacia la regulación del cannabis medicinal en Perú "14) WWF (2022), INFORME PLANETA VIVO 2022 HACIA UNA SOCIEDAD CON LA NATURALEZA EN POSITIVO"
- (15) IDPC (2022), Corporate capture of the Latin American medical cannabis market
- (16) Centro Nacional de Epidemiología, Prevención y Control de Enfermedades (2021), Situación epidemiológica del VIH-Sida en el Perú
- (17) Gestión (2021), El 35% de peruanos padece de dolor crónico (consultado 02.03.22
- (18) Mordor Intelligence (2023), MERCADO DE CANNABIS: CRECIMIENTO, TENDENCIAS Y PRONÓSTICOS (2023 - 2028)
- (19) Euromonitor International, (2021), La industria de cannabis en Latinamerica
- (20) (Agraria.pe (2021), Mercado peruano de cannabis medicinal es de unos US$ 100 millones anuales
- ("21) El Confidencial (2021) ENTREVISTA A ALAN GLANSE, CEO DE JUICYFIELDS ""La industria del cannabis será una de las más rentables en 2024. Es el momento de entrar"""
- (22) RED Agrícola (2023), Alistan cultivo de 700 hectáreas de cannabis en el norte del Perú (consulta 02.03.23)
- (23) Pontificia Universidad Católica del Perú, Instituto de Democracia y Derechos Humanos de la Pontificia Universidad Católica del Perú (IDEHPUCP) (2018), La situación de la población adulta mayor en el Perú: Camino a una nueva política
- (24) MINSA (2021), La Política Nacional Multisectorial de Salud al 2030 “Perú, País Saludable”
- (25) CESA (2021), Determinar el potencial efecto de la inclusión de la industria del cannabis medicinal en el desarrollo agrícola de Colombia
- (26) TNI.org (2022), Un Futuro Sostenible para los Agricultores de Cannabis - Oportunidades de “Desarrollo Alternativo” en el Mercado Legal del Cannabis
- (27) Forbes Mexico (2021), El cannabis al rescate del medio ambiente
- (28) BID (2022), La Gran oportunidad de la salud digital en América Latina y el Caribe.
- (29) Perú21 (2018), Cannabis medicinal: una oportunidad para la salud y el empleo (consultado 08.03.23)
- (30) Expansión (2021), En Perú se incrementan las emisiones de CO2 (consulta 08.03.23)
- (31) Diario Gestión (2022), Sector textil basado en cannabis se alía con casas de moda por negocios sostenibles
- (32) Forbes Perú (2021), Industria de cannabis en América Latina creció 17% en 2021, según Euromonitor
- (33) BIZ LATIN (2021), Cannabis Medicinal en Perú: Una Industria Global en Auge
- (34) (El Pais (2020), La ONU reconoce oficialmente que el cannabis puede tener propiedades medicinales
- (35) INEI (2022), Encuesta Nacional de Hogares, POBLACIÓN QUE REPORTÓ PADECER ALGÚN PROBLEMA DE SALUD CRÓNICO, SEGÚN ÁMBITO GEOGRÁFICO, 2009-2021.