Peru announces marijuana deregulation guidelines 15 months after legalizing medical marijuana
This week, more than a year after Peru’s Law 30681 legalized medicinal marijuana, the Peruvian government announced regulations for legal medicinal cultivation and use.
Peru is one of the most prosperous countries in Latin America. Since the early aughts, it has maintained an average growth rate of 5.9 percent, largely fueled by local and foreign entities investing in Peru’s mineral resources and strong trade deals with countries around the world, but particularly in Latin America.
Since 2014, growth has slipped. While GDP continues to rise, investors are wary due to a few public scandals that delayed massive, expensive infrastructure projects. The price of natural resources has fallen considerably, making the economy, as a whole, less valuable.
As their natural resource-based economy declines, cannabis has the potential to fill in these gaps.
Following in the footsteps of Colombia, Uruguay, and other Latin American countries, Peru legalized cannabis in 2017 to establish the right for individuals to use cannabis and its extractions for medicinal use.
The initial legislation is short, appointing regulators within the government, establishing a license-based system to engage in cultivation and research, and most significant, defining what is considered medical use. When passed, the law did not provide details as to how these regulating bodies would operate and what the licenses would permit.
In a turn from typical in the Latin American experience, the Peruvian government passed the initial law and allowed over a year for regulators and government agencies to draft the full legislation depicting the full details of the deregulation.
What does the legislation contain?
The new deregulation document is extensive.
The Peruvian Times, who had exclusive access to publish the legislation, summarized the regulation as, “guidelines and procedures for research, farming and production limits, importation, and the marketing and sale of medicinal marijuana and its byproducts. It also outlines the procedures for medical prescriptions, including a registry of patients/users.”
A year in the making, the legislation opens up the market for a seed to patient life cycle for Peruvians, but also for other Latin American countries who currently only import CBD medicine.
How will this impact the regional market?
Peru’s minister of health, Zulema Tomás, is already considering the implications of such a comprehensive bill. The legislation indicates that labs at universities or at cannabis production sites can “ask for authorization for commercialization of cannabis . . . for national distribution and importation,” outside of Peru.
International companies are already vying for a license.
After the Peruvian government announced the new legislation, Plena Global Holdings Inc., a private, Canadian, horticultural medical cannabis firm, released a press release in which they announced that they had been working alongside Peru to craft the deregulation laws.
“Peruvian officials have been working with . . . Plena Global Holdings Inc. to ensure the country can benefit from an effective transition to a regulated industry . . . The extended period of time between signing of the law legalizing medical cannabis, and the adoption of the regulatory framework . . . ensures a thorough framework for industry operations was established.”
This legislation has the potential to influence other countries’ attempts to build a deregulation framework. By partnering with firms that have already been a part of massive deregulation, like Plena in Canada, lawmakers have the opportunity to lean on experts but also improve upon gaps and problems with legislation that already exists.
Plena will begin cultivating cannabis in 2019 and has been approved to build a processing facility, hiring medical experts to conduct research. It is not clear when the licenses will be issued, which has proved to be a source of uncertainty in past economic projects.
With Plena gaining the first official partnership with Peru, and the implication that licenses will be available with an application, more companies with stakes in Latin America will likely be investing in Peru soon.