VERTICALIZATION OF THE CANNABIS SUPPLY CHAIN IN BRAZIL: A STRATEGY TO REDUCE COSTS AND BOOST THE NATIONAL INDUSTRY
Tatiana Miramontes Ribeiro e Andrey Freitas
Brazil, despite its agricultural and industrial potential, remains heavily dependent on the importation of active pharmaceutical ingredients (APIs) derived from cannabis to meet the growing demand for cannabinoid-based medicines. This dependency not only directly impacts production costs within the national pharmaceutical sector but also undermines supply predictability, weakens the health system’s responsiveness, and limits the country’s autonomy in developing therapeutic solutions based on plant biotechnology.
In a context marked by rising international logistics costs, constant exchange rate fluctuations, and an increasing judicialization of access to healthcare in Brazil, this fragility becomes even more critical. Judicialization has led the State to acquire cannabis-based medicines at high prices—often under emergency conditions—placing additional pressure on public budgets. This scenario compromises the sustainability of the Unified Health System (SUS) and makes universal access more difficult for both patients and laboratories operating in the country.
Considering that some of these medicines have already been incorporated into the SUS due to judicial decisions or exceptional clinical needs, dependence on imports also becomes a fiscal problem. Imported products have higher costs, mainly due to international logistics, customs duties, and exchange rate volatility. The result is a significant burden on public finances and, at the same time, a barrier to expanding access for vulnerable populations.
In this context, the verticalization of the medicinal cannabis production chain—which includes regulated cultivation, extraction, purification, standardization, and production of APIs within national territory—represents a concrete and strategic opportunity for Brazil. Building a national, integrated value chain has the potential to significantly reduce costs for laboratories, distributors, and the government, while enabling economies of scale, greater supply predictability, sanitary security, and technological independence.
Verticalization also creates a fertile environment for technological innovation, investment attraction, and the formation of a productive ecosystem focused on plant biotechnology. With adequate incentives, Brazil could position itself as a regional hub for research and production of plant-based APIs, contributing to the country’s reindustrialization with a focus on more sustainable and sophisticated value chains.
To realize this potential, it is essential to establish legal and regulatory frameworks that allow cultivation for pharmaceutical and industrial purposes within national territory, based on robust technical, sanitary, and environmental criteria. A clear, stable regulatory framework aligned with international best practices is a fundamental condition for building a solid, safe, and competitive production chain. Without such a framework, Brazil will remain outside the global innovation landscape for medicinal cannabinoids, wasting a strategically important opportunity.
It is worth noting that, in the medicinal cannabis field, regulatory and strategic focus should not be limited to finished products. The most critical and strategic stage lies in the local production of active pharmaceutical ingredients. APIs produced with quality, standardization, traceability, and compliance with international standards not only supply the domestic market but also open doors for exports, clinical research partnerships, and the development of new therapeutic formulations—thus expanding Brazil’s role in the international healthcare landscape.
International experience reinforces this path. Several Latin American and other countries have made significant progress in developing regulatory and production models. Colombia, for example, has developed legislation that allows the production and export of high value-added cannabis derivatives, positioning itself as one of the world’s largest suppliers of APIs. Uruguay, a pioneer in cannabis regulation, established a verticalized value chain focused on research and development. Israel has become a global reference in R&D and regulatory integration, combining science, industry, and regulation in an exemplary manner. Canada has consolidated a strong and technological industry, highly attractive to institutional investors, based on clear rules, legal certainty, and government incentives.
Brazil, in turn, possesses a unique combination of factors that make it highly competitive in this sector: a favorable climate for cultivation, agricultural tradition, an established industrial base, and a pharmaceutical-chemical infrastructure that is being revitalized as part of a sanitary sovereignty strategy. In addition, the country has research centers, universities, and qualified professionals capable of integrating scientific knowledge and technological innovation.
However, to turn these attributes into concrete advantages, it is necessary to overcome major obstacles. Legal uncertainty, delays in obtaining research and cultivation authorizations, the lack of tax incentives and specific funding lines for R&D, as well as the fragmentation between regulatory bodies, universities, and the productive sector, are challenges that must be addressed as a priority. The creation of a coordinated and cross-sectoral national policy is essential to transform medicinal cannabis into a strategic State agenda, rather than a temporary government initiative.
Added to these challenges are broader legal issues, such as the absence of a specific legal framework and the normative fragmentation surrounding the topic. The lack of clear, harmonized rules among federal entities and public agencies creates insecurity for investors and actors across the production chain, hindering long-term planning. This unstable environment limits the progress of serious projects and deters opportunities for economic and technological development.
Moreover, a portion of the public and institutional debate still confuses medicinal cannabis use with illicit use. This association—often fueled by historical stigma or ideological bias—has delayed the development of public policies based on scientific and health evidence. Decoupling medicinal cannabis from prejudice and punitive approaches is essential for the country to address the topic with the seriousness, technical rigor, and strategic vision it demands.
The verticalization of the chain must also take place under the highest standards of quality and compliance. The adoption of Good Agricultural Practices (GAP) and Good Manufacturing Practices (GMP), rigorous analytical control, and full process traceability are legal requirements and, at the same time, competitive advantages. These elements are essential to ensure patient safety, healthcare professional confidence, and Brazil’s insertion in the global market for plant-based APIs.
More than a debate restricted to ideological or sectoral interests, the medicinal cannabis value chain represents a strategic front for economic, social, and public health development. It is a sector with high added value, great potential for generating qualified jobs, and transversal impacts on the health economy, scientific innovation, and the country’s green reindustrialization.
Brazil, therefore, has a historic opportunity to lead an intelligent reindustrialization movement based on science, technology, sustainability, and sanitary sovereignty. Structuring a national production chain of plant-based APIs derived from cannabis is not merely about entering a new market—it is about strengthening the country’s industrial base, reducing external dependence, ensuring safe and affordable access for the population, and, above all, positioning Brazil as a relevant and competitive global player in an industry already worth billions and growing at an impressive pace year after year.
