Institutional Challenges and Incremental Progress: ¡Arriba Peru!
By Esteban Rossi I., Ph.D., Analyst, New Frontier Data
The overarching challenge for the legal cannabis industry in Peru is characterized by a reconciliation among diverging interests. For any governmental administration, aiming to fulfill political agendas and deliver healthcare provisions while catering to public perceptions represents a tall order. In Peru, competing interests continue to delay patient access to cannabis products. While public sentiment manifested growing support for comprehensive cannabis regulation, political leaders on both sides of the spectrum objected to advancing existing regulations. The former administration passed an ambitious medical program, but failed to meet some fundamental public expectations. Here New Frontier Data outlines these complex but solvable challenges and highlights interesting advances.
Tractable regulatory challenge
As a cultural norm, Peruvians like their cannabis. For decades, both young adults and seniors along with patients and athletes have enjoyed the therapeutic properties of cannabinoids. Polling and United Nations (U.N.) survey data indicate consumer prevalence in the country at between 8% – 10%, of the population, and that the regulation of medical use was well received by the population. When former president Pedro Pablo Kuczynski in 2017 approved medical use (Law 30681), the public’s response was overwhelmingly positive.
Of course, the devil is in the details. The development of technical guidelines and their subsequent implementation took much longer than anticipated, although the government created a patient registry system and granted importation permits to numerous companies. Meanwhile, establishing a robust supply chain that consistently provides products to patients remains a work in progress. Delays and product shortages remain all too frequent. More critically, patient associations and medical users argue that the existing regulatory framework fails to guarantee access to minorities, disadvantaged populations, or users at home. Under Law 30681, associations cannot obtain licenses either to produce for their members nor to produce for domestic use. Yet, congress recently approved a new law (PL6532) that updates the criminal code and allows associations to cultivate for themselves –clearly a major step forward for associations and their patients.
For the most part, Peruvian political leaders tend to maintain a safe distance from cannabis. In the last presidential elections, (finalized in June 2020), the two leading contenders expressed serious objections to cannabis regulation. Once elected, President Pedro Castillo announced that he would not advance cannabis regulation. To further complicate matters, the country experienced a constitutional crisis before the election, and was hard hit by the COVID-19 pandemic. Given those circumstances, cannabis is unlikely soon to make any list of legislative priorities.
Incremental advances in the medical market
Peru was forced to confront the coronavirus crisis while trying to advance its medical cannabis program. As of April, the sanitary agency (Digemid) granted distribution licenses to 39 companies that sell imported products and generic formulations (i.e., compounded products or magistral preparations). The first production and cultivation license went to Cannfarm. In addition, numerous large industry players have secured distribution licenses in Peru; included among the active firms are Inkafarma, Anden Naturals, Khiron, and Plena Global, while Digemid distributes products through its own pharmacy. Anden Naturals has in the past provided CBD extracts to Digemid.
The prices of generic cannabis formulations range between $57-$83 soles ($15-$21 USD). Inkafarma and Miafarma distribute CBD preparations ranging from 5% to 10% CBD. Local pharmacy chain Farmacia Universal distributes both CBD and THC products in its ten stores in Lima. Like imported products, generic formulations require medical prescriptions. The prices of generic formulations vary depending on patient needs, frequency of use, and cannabinoid concentration. In addition, Peruvian patients can purchase registered products like Cannabiol (manufactured by Chile-based Knop Laboratorios), or Sativex (manufactured by GW Pharmaceuticals). The cost of Sativex ranges from $507-1,164 soles/ $156-$358 USD.
Since 2019, the rolls of registered patients have increased consistently. More than 15,000 patients now receive medical cannabis as recognized in the national registry (see figure). Given the size of the Peruvian population (estimated near 33.5 million), and the prevalence of chronic conditions there, the growth potential of the market is considerable
Broad trends indicate that the Peruvian market will continue to grow albeit at a slow pace. In the absence of consistent government support, access and expanded medical education will continue to be the bottlenecks of the medical market. In the meantime, the grey market for imported products as well as flower will likely benefit from increased public interest and a growing base of medical evidence.