Mexican companies prepare to be the giants of medical marijuana

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The country is positioned as the second largest market in the region for medical marijuana, after Brazil, and these newly created companies are ready to take advantage of the business.

MEXICO PREPARES TO BE A POWER IN CBD IN LATIN AMERICA

The legalization of marijuana is discussed in more and more countries, including Mexico, and in this context, companies have begun to take an interest in the medical marijuana market, the so-called CBD: the product that comes from the marijuana plant, but that does not contain the psychotropic agent.

“In the 60 countries that are about to legalize marijuana, more than 90% of cases are focusing on developing products with CBD for industrial and medicinal reasons. The most important region in this development is Asia, and in Latin America, Brazil leads in consumption. Then there’s Mexico, Colombia, Chile and Argentina, “says Giadha Aguirre, general director of New Frontier Data.

China is the largest grower and producer of medical marijuana in the world, with 95% of the industry. Therefore, according to Aguirre, Latin American countries should ally. “It will depend on many things for the region to grow, such as the cost of cultivating it, as in Thailand and Indonesia; or that there is innovation like that of the United States and Canada, which is the most mature market. The problem that Europe has, which occupies the second place in consumption, is that it can not grow or produce, and therefore Latin America, Asia and Canada are competing to see who is going to export more, “he adds.

Mexico has land and a good geographic location, but it must reduce its costs to compete against Asian markets. “In Europe there is a great opportunity, I would not be surprised if Canada gave it back, that is, that imports from Mexico or another Latin American country will take them to Europe. That’s the formula, “says Aguirre.

Mexico already has great players

At the end of last year, the Federal Commission for the Protection against Sanitary Risks (Cofepris) released around 60 permits to produce raw materials, food, beverages, food supplements, cosmetics and cannabis-based pharmaceuticals.ADVERTISINGThe main companies that benefited from these permits were CBD Life and CBD Science, which registered the largest number of products; in addition to Medimex, Hemps Meds, Master Pharmacies, Finat Mexico, Endo Natura Labs, Kuida Life Mexico, Pharma Oil Solutions and The Clinic Pain Relief Center.

Mexico took the first steps towards the regulation of cannabis in 2015, when the Supreme Court granted the first amparos for self-cultivation for recreational purposes, with a ruling that established jurisprudence in the country.

However, at the legislative level, progress has been slow. In 2016, the cannabis law initiatives began to reach Congress, and in the public sphere a discussion began that ended with a reform to allow the medicinal and scientific use of the herb.”The big beneficiaries are the companies that already obtained the permits for the import, for this type of industry that is now opened, of beverages and edibles made with cannabis derivatives. It pushes an industry that did not even want to open up in terms of adult or personal use, “says Alejandro Madrazo, research professor of the CIDE Drug Policy Program.

At the end of last year, the Federal Commission for the Protection against Sanitary Risks (Cofepris) released around 60 permits to produce raw materials, food, beverages, food supplements, cosmetics and cannabis-based pharmaceuticals.

The main companies that benefited from these permits were CBD Life and CBD Science, which registered the largest number of products; in addition to Medimex, Hemps Meds, Master Pharmacies, Finat Mexico, Endo Natura Labs, Kuida Life Mexico, Pharma Oil Solutions and The Clinic Pain Relief Center.

Mexico took the first steps towards the regulation of cannabis in 2015, when the Supreme Court granted the first amparos for self-cultivation for recreational purposes, with a ruling that established jurisprudence in the country.

However, at the legislative level, progress has been slow. In 2016, the cannabis law initiatives began to reach Congress, and in the public sphere a discussion began that ended with a reform to allow the medicinal and scientific use of the herb.

“The big beneficiaries are the companies that already obtained the permits for the import, for this type of industry that is now opened, of beverages and edibles made with cannabis derivatives. It pushes an industry that did not even want to open up in terms of adult or personal use, “says Alejandro Madrazo, research professor of the CIDE Drug Policy Program.

THE ENTREPRENEUR WHO REVOLUTIONIZED THE MEDICINAL MARIJUANA MARKET IN MEXICO.

PIONEER.

Pioneer. Raúl Elizalde was among the first to defend in Mexico the medicinal benefits of products made with CBD

Raul Elizalde, now president of HempMeds Mexico, managed to be the first to obtain permission to import hemp oil to the country and deal with it, the illness of his daughter Grace.

Her story became famous, as it helped to raise awareness about the advantages of CBD to fight some diseases, such as Lennox-Gastaut, a serious form of epilepsy suffered by her daughter. Thanks to hemp oil rich in CBD, he managed to lose 400 seizures per day to only 20.

This was the first step that led to an in-depth opening in June 2017, when the Mexican Congress promoted the reform of the General Health Law to authorize the sale of cannabis-derived products for medicinal use. Elizalde, who had already built a reputation as a pioneer in this industry, was then named president of HempsMeds in the country. Medical Marijuana was the first company to import and market CBD products in Mexico.

Today, Elizalde is satisfied with the permits that HempsMeds obtained from Cofepris, the health regulator, at the end of November 2018, to sell five products with cannabis derivatives. It involves two cosmetics and three food supplements that will help treat diseases like your daughter’s.

“We are happy to obtain our registered products to be able to import them. They are products that were already being used by some people as coadjuvants in some treatments, and now they will be able to have it in an easier, more accessible way. Without a doubt, this is going to be a very good thing for the market, “he says.

HempMeds now wants to import the raw material, to start manufacturing the products in Mexico and then export them to Europe, Canada, the United States and Latin America. She also plans to develop another type of herbal cannabis products, Elizalde says.

The entrepreneur considers that, in the medium term, the growth in sales can be from 200 to 300% due to the fact that it will be a booming market, with prices going down and more and more distribution options in pharmacies and supermarkets. “We believe that, in a first stage, in the first year, our numbers should be hovering above one million dollars in Mexico. Logically, these numbers have to increase (with the opening of the sector), and we estimate that they can go above 2 or 3 million dollars in a short term, “he adds

THE PIONEER WHO ALREADY HAS A STRATEGY TO SELL CBD

OPENING STEP.

Opening the way Janko Ruiz de Chávez aspires to become one of the largest Mexican entrepreneurs in the sale of CBD products

Janko Ruiz de Chavez, 18, founded RHC Farma, a pharmaceutical company that he developed 12 years ago to develop medicines and herbal remedies. Over time, he managed to market the products in more than 40,000 points of sale, including some chains such as Farmacias del Ahorro, Farmacias Benavides and Farmacias San Pablo.

His next step was the creation of CBD Life two and a half years ago, with which he plans to introduce in Mexico some of the first products made from cannabis. You already have 21 Cofepris permits for sale. Among these, is mariguanol, an ointment that is sold informally in places like the subway, and that this company now patented to distribute it in pharmacies.

Expansion : How did the idea of ​​developing medicinal products based on cannabis come about?

Janko Ruiz de Chávez: The chemists who are responsible for the development of the formulations of the products told us about the incredible properties that some of our products could have, if we combined them with the CBD. Then we started to investigate, we traveled to Canada, the United States and Europe, to see how the different markets were developed. The Americans have the best product development, with the most research, and that is why we chose them as our best source of supply. They come from organic fields in Colorado: from the hemp, a special oil is extracted that is transformed so that we can import it and distribute the brands that we create for the Mexican market, with the intention of reaching the greatest number of people, giving them a fair price.

E: When did you decide that it would be the ideal time to create the company and launch yourself into a sector that did not exist in Mexico yet?

JRC: Since we began to see that the amparos passed to import products (with the judges), thanks to the cases of types of epilepsies that helped raise awareness among the population about the need for this type of products. 
So, we decided to start developing a line with which we could be successful and bring the ingredient to these people. What we did was to bet on a global trend of cannabis, and on the growing awareness of people about the power of the ingredient.

E: What is your sales projection? 
JRC: We will start to market our products in December, and the sales forecast for the end of this year (2018) is 50 million dollars in our 40,000 points of sale, in addition to starting the online sale at Amazon. For the next five years, we believe we can achieve sales of 150 million dollars. It is a very well studied figure with all our sales channels.

E: How do you see the future of this market? 
JRC: We see an imminent legalization and, in this, an opportunity for us to place and position brands and to approve more products. We believe that the CBD and pharmaceutical market can reach 400 million dollars in the long term. 
We are calculating that it will be the world’s largest market for cannabis-derived products of less than 1% THC. Very large sales chains are already entering the game, and this makes us the most interesting market in the world, with 130 million Mexicans.

THE ENTREPRENEUR WHO KNEW HOW TO ANTICIPATE THE POTENTIAL OF THE MARKET

Reputation.

Pablo Botella, from CBD Science, seeks to improve the perception of the advantages of this derivative among the Mexican population 

Pablo Botella knows the herbal medicine industry well in Mexico due to his more than 15 years of experience as a manager at Vert Pharma, a pharmaceutical company dedicated to the production and commercialization of products made from plants, to cure from stomach ailments to stress and anxiety. In this work, in 2008 he began his research with the CBD, the component of cannabis with medicinal functions. He did it through books, since he could not legally have access to the plant or the derivative to analyze its effects.

“Everything went with bibliography to start investigating what it was used for and that it had been used in other countries. Cannabis has been used in Mexico for years as the remedy of the grandmother to cure the rheumatism or as an anti-inflammatory, “says Botella.

The result of his study made it clear that there was a great business opportunity. Therefore, in 2017, he founded CBD Science, together with four partners, to take advantage of the opening of Mexico to products with this medicinal component, which was already anticipated imminent. The bet was made in November of that year, when CBD Science obtained 10 permits from Cofepris to develop eight nutritional supplements and two cosmetic balms, which it began to sell through its online store.

Now, its main objective is to reach the medical and scientific community, before seeking partnerships with different pharmaceutical chains.

“Our product is aimed at them, we want them to recommend us, because, after all, we do not want our product to be on the shelf for some time. We want it to stay, and that is going to give us the support of these communities, “says Carlos Ballados, the company’s financial director.

The CBD is recognized for its properties as anxiolytic and palliative for pain, as well as for its properties against rheumatism and epilepsy. The company directs its products to patients suffering from these conditions.

For now, he has to import the finished product from the United States and Canada, and then sell it in Mexico. In the coming years, it will seek to centralize production in this country to become “a benchmark worldwide” and export to Central and South America. “We are going to manufacture everything in Mexico, because we want to have a social impact, we want to help the communities that have been hit by drug trafficking and make them participate in improving their quality of life,” points out Botella. The firm already operates in a laboratory in Iztapalapa that belongs to Vert Pharma, partner of CBD Science, to elaborate some of these products.

In the short term, the company is waiting for the approval of the initiative of the Secretary of the Interior, Olga Sánchez Cordero, to decriminalize the consumption of cannabis and its derivatives, and thus be able to integrate its production chain in Mexico. (At the end of this article, the bill was still not approved.)

“If the will of the legislators becomes reality, with the new initiative, this can become a very interesting public policy tool. According to the UN, we are the second largest producer of marijuana after Morocco, but it is illegal. Imagine the power that the country has in this, “says Ballados, who says that the global market will be worth nearly 35,000 million dollars by 2022.

Another challenge is to eliminate the stigma that still exists on the CBD, educating the population so that it is not confused with a drug and its therapeutic properties are known.”Mexico can become an export power of hemp oil. Right now, the United States is importing hemp oil from Canada, and we have the potential to produce much more than Canada. The number of harvests we can have per year is higher, “says the businessman.

Source: Expansion, Milenio

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