Argentina legalized medical marijuana in 2017 to decriminalize the use of the drug for certain illnesses but did not include legislation to permit in-country cultivation of cannabis for medicine or medical purposes.
This week, the country has further solidified the opportunity for in-country medical cultivation in newly announced deregulation guidelines and approval of seed imports to a cultivation location in the Jujuy Province.
The legislation received lukewarm support, with many advocates critical that the government continues to leave out regulation for secure cultivation for families.
Following the path of deregulation
Argentina continues to tweak and evolve the initial 27,350 legislation that legalized medical marijuana.
The initial legislation provides full jurisdiction to INASE, the country’s Institute of Seeds. INASE since released amendments, permitting the cultivation of medicinal cannabis for research purposes in February.
This week, INASE added further statutes to the cultivation legislation giving its own regulators control of every aspect of the cultivation process to prevent any wrongdoing or illegal growth or sales.
A translated quote from the original legislation says, “No activity regarding production, distribution, manufacturing, or importing is allowed without the prior authorization of INASE. The controls executed by INASE can include physical inspection of the organs of propagation throughout their crop cycle.”
If the crops need transporting, the Ministry of Security will supervise and manage the progress.
INASE is, in effect, building a log book of all activities carried out by each company permitted to cultivate cannabis.
Valeria Salech of Mamá Cultiva Argentina, the foremost advocates for home cultivation using the hashtag #LeySeguraCultiva, told La Izquierda Diario, a progressive, Spanish language news site that “Mamá Cultiva understands that [the law] is oriented toward industrial production.” She continues by indicating that the legislation is designed to clear up the cultivation contracts announced last year.
At this time, there is no indication that the Argentinian government will move forward with home cultivation.
Investments in the Argentinian Cannabis market
In March 2018, Aphria Inc. (NYSE: APHA) announced an exclusive distribution deal in Argentina. Partnering with APB S.A., a Buenos Aires-based medical distributor, the company received permission to stock medicinal CBD in pharmacies but also to import oil for research purposes.
Aphria is the exclusive supplier to the Argentinian medical cannabis market.
Aphria intends to cultivate medical cannabis in Argentina as well, as indicated by their letter of intent in December 2018. When the LOI is official, APB will build a manufacturing and processing facility to produce medicinal CBD oils.
Last month, Player's Network, Inc. (OTCQB:PNTV), based in Nevada, announced a partnership with Cannava SE to cultivate 15 hectares of land in Argentina’s Jujuy Province.
The same day INASE published the new cultivation guidelines, Player’s Network announced approval from the Argentinian government to import seeds to their cultivation plot in Jujuy. The Nevada firm is the only international firm to receive such permission.
Both Khiron Life Sciences, Inc and Canopy Growth indicated they are speculating at moving into the Argentinian market.
Looking to the future
Demand has quickly outpaced supply in much of Latin America, and Argentina’s slow implementation of marijuana cultivation and processing for in-country medical use drives patients to cultivate illegally or access other aspects of the illegal market.
The new adjustments to the law and the cultivation announcement may pave the way for additional firms to cultivate in Argentina.
Aphria’s stock is up after taking a tumble this month closing the day at $10.41 a share.
Despite strong news, Player’s Network ended today at $0.026 per share.