Use or sale of cannabis in the United States was generally prohibited until relatively recently. While U.S. federal law still prohibits the use or sale of cannabis, laws in at least 29 states and the District of Columbia permit the sale of cannabis for medical use only; in other states it is permitted for adult and medical purposes.
The industry has seen consistent growth – in 2016 alone, consumers spent $6.7 billion on legally purchased cannabis products and some estimate that by 2021, consumer spending on cannabis will reach $22.6 billion. Recent developments in Brazil seem to indicate that its policies, like those of several other countries, may be transitioning as well.
Brazilian law currently prohibits the cultivation and use of cannabis for adult purposes, but the legal status of cannabis-based pharmaceutical products and the use of cannabis for medical purposes is unclear. The Brazilian Health Regulatory Agency (ANVISA), in light of recent court decisions, has relaxed restrictions and now allows patients with medical prescriptions to personally import some cannabis-based drugs.
In fact, in January 2017, ANVISA approved the first registration in Brazil of a cannabis-based drug, and in May 2017, ANVISA added cannabis to the list of its approved substances. Although this does not mean that ANVISA has officially recognized cannabis as a medicinal plant, it implies that such authority recognizes the potential use of cannabis for medical purposes, subject to further research and authorizing court decisions. Most noteworthy, however, is that in May 2017, a petition was filed before the Brazilian Supreme Court questioning the constitutionality of certain rules that prohibit the cultivation and acquisition of cannabis. The Brazilian Supreme Court has not yet set a date to hear the case.
What This Means for Brazilian Investors
It is too early to anticipate the changes that may result in Brazilian legislation from the decisions of the Brazilian Supreme Court. Therefore, Brazilian investors must be careful about investing in U.S. or other companies that produce or sell cannabis. A new cannabis market in Brazil may be unfolding, however, now that a handful of companies have been authorized to export their cannabis-based medical-use drugs to Brazil and that the first cannabis-based drug has been registered in the country.
Brazilian pharmaceutical companies or investors, therefore, could take advantage of the more mature cannabis industry in the U.S. and look for opportunities to partner with, or invest in, U.S. companies that are currently developing or marketing cannabis-based drugs that meet the ANVISA requirements.
About Duane Morris’ Cannabis Group
Cannabis has been legalized in one form or another in every U.S. state in which Duane Morris LLP maintains an office. In addition, our attorneys (which include dually-licensed and trained Brazilian and U.S. lawyers) are uniquely situated to assist clients in achieving their business goals in this rapidly growing industry, and have been actively representing clients participating in different sectors of the legal and multi-faceted cannabis industry.
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