The ascent of hemp

Regulators keep watch as CBD oil market grows.

Latin America is known for the production and export of a diverse range of agricultural commodities, whether it is coffee from Brazil and Colombia, beef from Argentina, or bananas from Ecuador. According to the Food and Agriculture Organisation of the United Nations, the region accounts for an estimated 16% of global food and agriculture exports while representing just 4% of global food and agriculture imports.

Hemp, a variety of the Cannabis sativa plant grown specifically for industrial use, is increasingly seen as an agricultural commodity and is currently being exported by Uruguay, Paraguay and Colombia to Europe and North America.

Cannabidiol (CBD) is just one of the cannabinoids extracted from cannabis plants and is being studied as treatments for anxiety, cognition, movement disorders and pain. The CBD oil market was worth USD 90.3 billion in 2020 and is estimated to grow above 20% p.a. for the next five years.

Latin America has high availability of all the raw materials and inputs required for industrial production of CBD oil but governments in the region have been grappling with how to regulate the sector.

A lawyer in Montevideo with expertise in the sector describes the local market, “At present, the biggest business in Uruguay is the production of genetically modified buds for medicinal use but more producers are looking at CBD oils that can also be used for beauty and nutritional products. Uruguay mostly exports plants to the EU and Brazil but are trying to target the US and Australia.”

“At present, the biggest business in Uruguay is the production of genetically modified buds for medicinal use.”

Corporate lawyer, Montevideo

A local producer talks his book, “Producers in Uruguay are three to four years ahead of other countries in the region in terms of production. Producers here are focusing on offering high-quality product with good traceability and regulatory checks to guarantee there a no illegal actors in the system.”

The lawyer explains the regulatory landscape, “Lacalle Pou’s administration was key to eliminate export bottlenecks by empowering the Cannabis Control and Regulation Institute (IRCCA) [part of the Ministry of Health]. For instance, the IRCCA is now handling and issuing export licences which has significantly reduced bureaucracy for producers and exporters. Beyond this, the decriminalisation and, to a larger extent, legalisation of the cannabis consumption and trade in third states will bring new regulations which will have an impact at national level here in Uruguay.”

“The decriminalisation and, to a larger extent, legalisation of the cannabis consumption and trade in third states will bring new regulations.”

Corporate lawyer, Montevideo

The ability and willingness of the Uruguayan government and regulator to adapt to changes in attitude towards this sector is a good sign for the future.


Important Notice
While the information in this article has been prepared in good faith, no representation, warranty, assurance or undertaking (express or implied) is or will be made, and no responsibility or liability is or will be accepted by Deheza Limited or by its officers, employees or agents in relation to the adequacy, accuracy, completeness or reasonableness of this article, or of any other information (whether written or oral), notice or document supplied or otherwise made available in connection with this article. All and any such responsibility and liability is expressly disclaimed.
This article has been delivered to interested parties for information only. Deheza Limited gives no undertaking to provide the recipient with access to any additional information or to update this article or any additional information, or to correct any inaccuracies in it which may become apparent.

Most recent in Commodities

The Grape Divide

The fruity battle between Peru and Chile for global dominance.

Bugging Out

Navigating Latin America’s crop protection chemicals market.

Superstar soybean in South America

Navigating challenges and embracing advancements.

Where the money grows on trees

Making sense of Uruguay’s forest boom.

The ‘berry’ best

Blueberries become Peru's leading agricultural export, surpassing coffee and grapes.

Withering wheat

Droughts affecting 75% of Argentina’s agricultural land decimate the country’s wheat crop.

Meat meeting

Livestock entrepreneurs assemble in Bolivia to consider growth of beef exports.

Agtech booms

Venture capital funds flow into Latin American agtech.

The appeal of steel

Steel production is growing in Latin America

Missing the key ingredient

Amidst inflationary pressures, Mexico could ration cooking oil.