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For Brazil, courting importers is the only way to provide medicinal CBD access

Feb 19, 2019

Brazil’s new medical marijuana law, which would allow medical patients to cultivate the plant for personal medical use, is in jeopardy while companies from all over the world attempt to buy a slice of the medical import market, which could become of the biggest in the world.

Brazil has a janus-faced relationship with cannabis. Historically, it has followed the UN's drug standards, a confiscate and prosecute methodology. Since 2006, the country has slowly deregulated medical cannabis, with a historic medical cultivation bill approved by the Senate in November 2018.

As of January 2019, the bill is in jeopardy due to Brazil’s new president, Jair Bolsonaro, who is staunchly anti-drug, including cannabis. He's not alone.

[Transforming the CBD marketplace: PotNetwork’s exclusive interview with Youngevity President and CFO Dave Briskie]

The deregulation has done little to change attitudes about cannabis with only about a 2 percent increase in support for recreational marijuana from 1995-2017, according to Datafolha, a Brazilian research group, and has even produced unintended consequences, with more individuals incarcerated for drugs than ever in Brazil’s history.

Medicinal CBD oil has been legal in the country since 2015, and demand for cannabis as medicine has increased. At least four international cannabis firms, GW Pharmaceuticals from the United Kingdom (NASDAQ:GWPH); Khiron Life Sciences, Corp. from Canada (OTCQB:KHRNF) (TSXV:KHRN), Mr. Pink, from China, and the American company Medical Marijuana, Inc. (OTC:MJNA) are entering or positioning to enter the Brazilian market.

CBD Oil supply trying to keep up with demand

In 2015, Brazil legalized CBD oil for medicinal purposes. Today it is one of the top global importers of CBD oil, number 13 in the world.

Brazillian senator Marta Suplicy argued in a letter: “We need to empathize and put ourselves in the place of the other. In this way we can, as legislators, defend the true essence of health care, which is to mitigate human suffering.”

Meanwhile, healthcare regulators in the country require CBD oil to be prescribed by a doctor, but the 2015 law omitted statutes to cultivate and refine plant.

[N.J. governor, state Democrats say deal to legalize cannabis almost done]

The new bill, which would allow medical cultivation, is not expected to pass, but nothing is preventing regulators from courting imports from medicinal CBD companies.

The Brazilian bill

Spotlighting important importers

In January 2017, GW Pharmaceuticals, a cannabis pharmaceutical company, with its partner, a French company with a Brazillian branch, Ipsen Pharmaceutical, Ltd. (OTCMKTS:IPSEY), gained the first license from ANVISA, Brazil’s health regulatory agency. They distribute Sativex, which is designed to moderate symptoms of spasticity.

Soon after, HempMeds Brasil, a subsidiary of Medical Marijuana, Inc., claims the title as the first importer of CBD oil to Brazil. Medical Marijuana, Inc. is an American company seeking to build a global market for CBD. CBD demand is so high in Brazil that the country waived import tariffs for HempMeds. HempMeds is not only importing CBD oil into Brazil, but it’s building a learning community for doctors to build their knowledge about the benefits of CBD as medicine.

Comissão de Assuntos Sociais aprova descriminalização do cultivo da cannabis para uso pessoal terapêutico (PLS 514/2017). Medida segue para Comissão de Constituição e Justiça.

— Senado Federal (@SenadoFederal) November 28, 2018

Next, we look at two suitors.

Khiron Life Sciences, Corp. is hoping to enter the Brazillian market via partnerships with Uruguayan Nettagrowth International. They are capitalizing on cheap production costs in Brazil’s southern neighbor and the permissive export market between them. When Khiron begins Brazillian imports is not yet clear.

[Marijuana banking finally ranks a congressional hearing]

Finally, Pink Wangsuo, a Chinese entrepreneur, and owner of a premium CBD oil company visited Brazil this week to begin negotiating potential CBD oil imports to the Latin American country. Mr. Wangsuo, best known for his ginseng drink company, launched a CBD oil company in Los Angeles. He wants to not only import CBD to Brazil but also expand Brazil's internal CBD market via investments and jobs in the industry.

What’s next for Brazil?

With the legal cultivation bill uncertain and demand for CBD on the rise, Brazil needs to make choices regarding the medical cultivation bill and import market.

The landmark bill, to open up medical cultivation for individuals, if passed, poses challenges for individuals isolating pure CBD chemicals from plants. Marcelo De Vita Grecco, CEO, and co-founder of Centro de Excelencia Canabinoide told MJBuisness Daily that, "patients should have access to standardized and safe products, and cultivating at home is too risky [and] also highly inconvenient.”

European Parliament passes resolution to address barriers to medical marijuana access]

With no public discussion regarding industrial-scale cannabis production within the country, if Brazil is to continue to put the needs of their patients first, it will need to continue its partnership and import model.

Lucky for Brazil, and luckier for its patients, there is no shortage of companies hoping to enter the Brazilian market.

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