Verdemed Gives 3 Reasons Why Latin America Is An Interesting Market For Cannabis Companies
This special presentation Verdemed comes from Benzinga’s Virtual Cannabis Capital Conference that took place on October 15. Click here for more coverage of this event with presentations from some top CEOs, investors, and lenders in the cannabis space.
Verdemed is a Canadian pharmaceutical cannabis company that is rooting its operations in Latin America. Verdemed's mission is to make cannabinoid-based medicinal products accessible to this region. Verdemed has operations in Brazil, Chile, Colombia, Mexico, and Peru.
"These are exciting times for companies operating in Latin America. It's an interesting market," said Fabio Lampugnani, Managing Director of Verdemed.
In his presentation, Lampugnani, alongside President & CEO of Verdemed José Bacellar, outlined the three reasons why Latin America is an exciting market for cannabis companies.
The Latin American market is changing as we speak. In December of 2019, Brazil put forth a newly approved regulation that helped speed up the registration process for pharmaceutical cannabis-based products. And now there is the possibility of a new cannabis bill that, if approved, will create an entirely new industry in a couple of years. Regulations in Peru also changed towards the end of 2019. And in Mexico, recent regulation approval is expected to come in the next few months.
As we can see, cannabis regulations in Latin America vary widely from country to country.
"You need to have a deep understanding of what is going on in each country. In Latin America, all countries are moving in one direction but at different speeds," said Lampugnani.
Verdemed invested and spent time building a strategy that made sense, given Latin America's regulatory framework. Lampugnani notes that both countries' processes are smoother and faster compared to other countries, which is why the company chose to start selling there. All the Brazil and Chile processes are entirely online, and answer times are shorter from regulatory agencies.
The 3 “UN's”
"When you have uneven, unstable, and unsynced markets, the company has to design one strategy per country," began Bacellar, "making this natural disadvantage as something that is a competitive advantage of the company that has feet on the ground. We have Colombians in Colombia, Chileans in Chile, and that's how it works in Latin America."
In Peru, Verdemed is also awaiting registration of two drugs, under the trade names Sativyl and CBD 100, to commence commercialization. Next year, the company anticipates sanitary authorization requests for three more products derived from cannabis in Brazil and three cannabinoid-based dermo-cosmetics in Colombia.
There is currently a lot of action in the cannabis industry, both in Europe and the US. And while many have their eye on these two regions, the opportunity available in Latin America may be better suited for some investors and cannabis companies.
"If we believe that cannabis is here to stay and cannabis will prevail eventually, then the sooner you get in, the better you perform," said Bacellar.
Verdemed is to open its second round of investment to raise $3 to $6 million by December from qualified investors. In Bacellar’s words, "we have been operating for two years, and our strategic plan is to consolidate Verdemed in Latin America while focusing on the IPO in Canada at the end of 2021 or the beginning of 2022."
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