Billion-dollar cannabis market expected to attract more investors in 2023

Cannabis-based products could generate around $61 billion by 2026 worldwide, according to data from the specialized consultancy BDSA. However, this billion-dollar market still needs to overcome legal and ideological barriers.

Despite the impediments imposed by Brazilian legislation on the cultivation and commercialization of cannabis in the country, scientific studies show that substances like CBD and THC, extracted from the plant, are important for treating diseases such as epilepsy, dementia, fibromyalgia, Parkinson's, and even depression.

Thus, the scientific community is allied with the sector, which, despite all obstacles, also shows itself as a market with great potential for investors.

It is no coincidence that entrepreneurs from around the world are attracted to the plant's lucrative power.

In 2021, the legalization of recreational marijuana use was approved by New York Governor Andrew Cuomo. According to the law, individuals over 21 can buy and grow plants for personal use, provided that part of the proceeds is allocated to substance abuse treatment and education campaigns.

In the eyes of investors, legalization fosters the industry and brings new growth prospects to the sector in the financial market.

How to invest in marijuana in Brazil?

There are two ways to invest in the cannabis market in the country: investment funds or directly in companies listed on foreign stock exchanges through ETFs (Exchange Traded Funds).

In Brazil, there are three specific funds in the Cannabis sector available.

XP offers the Trend Cannabis for passive investments in MJ. To invest in the ETF listed in the United States, the minimum investment is R$ 100, and it is worth noting that there is an annual management fee of 0.5%.

Vitreo offers two other options for active management for investments in Cannabis: the Active Cannabis fund and the Cannabidiol fund. These two options can be purchased in units of R$ 100. However, the management fees are different, 0.72% per year and 0.9%, for each of them respectively.

According to a survey released by E-Investidor, of the 29 companies in the Cannabis sector listed on US stock exchanges, only one had a positive return in 2022. Marrone Bio Innovations had an accumulated increase of 25.97% in the first half of May this year.

In addition to these options, investors can also make direct investments in foreign companies through ETFs. The Cannabis universe is diverse and offers various investment models.

Interested Brazilian investors can only make investments by resorting to investment funds or ETFs, as the sector is prohibited in the country.

The National Health Surveillance Agency (Anvisa) allows Brazilian consumers access only to cannabinoid-based medications with a medical prescription.

In February, Anvisa authorized the import and commercialization of three new medicinal products based on marijuana. Canabidiol Belcher, Canabidiol Aura Pharma, and Canabidiol Greencare, in addition to 11 other derivatives already approved in Brazil. They contain no more than 0.2% THC (Tetrahydrocannabinol).

Profit in Brazil

Legal barriers still prevent the sector from developing into other areas such as wellness and beauty products. The economic potential of the Cannabis industry is enormous, but it is still something distant from the reality of Brazil.

To contextualize the proficiency of the sector, Kaya Mind, a data intelligence company focused on the Cannabis market, pointed out in its