Chilean Medicinal Market Crawling Towards Progress

By Esteban Rossi I., Ph.D., Analyst, New Frontier Data 

Markets and states interact in seemingly odd ways. While in some jurisdictions the regulation of medicinal cannabis de facto created a new industry, patient demand in Chile led to creation of an interesting market despite the precariousness of its existing regulatory framework. This dynamic context offers some opportunities for medically oriented companies, distribution platforms and associations, but has proved challenging for international firms aiming to enter the Chilean market.

Regulatory overview

In 2021, Chile lacks a customized regulatory framework for cannabis. The regulated market comprises mostly registered products authorized by its health agency: El Instituto de Salud Pública de Chile (ISP). Growers’ associations are officially authorized by Law 20,000 (2005), and medicinal products allowed by Decree 84 (2015). Presently, patients and their families can obtain generic formulations (e.g., compounded preparations), registered products, and imported drugs in pharmacies.

Large distribution chains like Salcobrand, Knop, and Bioformula distribute cannabis products through more than 500 pharmacies across the country. Those medicinal products, unfortunately, require medical prescriptions and remain overly expensive for average citizens. Generic formulations can cost up to $120 USD, while registered products are even more expensive; neither generic formulations nor registered products are covered by public insurance.

Knop Laboratories manufactures Cannabiol® in Chile. The product contains both THC (20mg/ml) and CBD (9mg/ml), and has been clinically tested for pain management in oncology patients. Remarkably, Cannabiol just obtained its approval by the Peruvian health agency (Digemid) in April, while the ISP has not authorized its domestic use in Chile. Interestingly, in 2016, ISP authorized the use of Sativex, a combined THC-CBD product, manufactured by GW Pharmaceuticals.

Large-scale cultivation remains prohibited under Chile’s national narcotics law, but a few firms obtained special authorization from the Agricultural and Livestock Service (SAG), mostly for research purposes following Law 20,000 (2005) and Decree 867 (2007). The process remains opaque and time-consuming; only a handful of companies secured cultivation licenses, including Dayacann, Patagonia Farms, and six hemp companies.

So, while under the current framework it is possible to cultivate cannabis with SAG’s authorization, production and distribution of medicinal products falls under the authorization of the ISP, requiring a medical prescription. Private cultivation and consumption are also permitted, but both possession and carrying constitute serious offenses. Police officers and prosecutors often fail to distinguish between users and traffickers.

Associations opening the way

While Chile lacks cannabis legislation, patients and their families are left to themselves to access cannabis products. In response to the need, numerous associations of home-growers and educators emerged across the country. Local sources estimate that approximately 200 associations now operate across the country.

Numerous associations including Fundación Daya, Greenlife, Reforma, Mama Cultiva, and Fasim currently offer educational services or training and legal advice to consumers in need of medical cannabis. Fundación Daya is widely recognized throughout Chile; and the larger region. Back in 2014, Daya obtained its first cultivation permits, and has since collaborated with numerous research centers, local laboratories, and municipalities to investigate the medical uses of cannabis for chronic pain, cancer, or epilepsy.

Fundación Daya also plays a crucial health role educating the public, helping patients and spurring public dialogue about the urgent need for cannabis legislation. Back in 2015, they supported the draft bill that sought to update the narcotics law; the bill was approved by the lower chamber but senate leadership refused to discuss it.

More recently, the foundation promoted the Law for Safe Cultivation in collaboration with local political leaders. It seeks to modify the health code and Law 20,000 to protect home-growers from both law enforcement and punitive action. Considering that current legislation allows law enforcement to seize and destroy cannabis plants and prosecute medical users, it is imperative to update the legislation.

Legislative advances and the way forward

It seems clear that neither regulators nor legislators have been committed to advancing cannabis legislation during the current administration. However, a combination of factors suggests that the outlook for consumers and the industry is about to change. The reasons are straightforward: first, according to Fundación Daya, they have served over 70,000 patients. Moreover, Fundación Daya estimates that over 200,000 have used medical cannabis in Chile. Second, based on the prevalence of chronic conditions, New Frontier Data estimates that more than 5 million people currently suffering from chronic conditions could use medicinal cannabis were it readily available.

Third, the public at large supports cannabis regulation. Since 2015, it became clear that punitive approaches and policing violated users’ fundamental rights, and created numerous challenges for the legal system (as demonstrated in numerous judicial decisions overturning convictions and protecting the rights of home-growers. Consequently, updating cannabis legislation remains the best course of action for users and the executive branch.
As Chile sets about electing municipal governors and a new president before the end of the year, it is unavoidable that patients’ rights and drug reforms will be significant election issues.