By / September 4, 2020

The town of San Pedro is shifting from oranges to develop its cannabis industry

An Argentine town well known for its citrus fruit cultivation is once again becoming relevant, promising to become the epicenter of the Argentine cannabis industry.

We’re talking about San Pedro, located in the province of Buenos Aires, but with strong links with the citrus industry in Entre Ríos.

The cannabis company Clúster Cannabico and the municipality of San Pedro signed a letter of intent to jointly create the first industrial park for the manufacture of cannabis and products derived from this crop.

The company plans to make an initial investment of $1.5 million in the establishment of the complex, where around 20 firms, mostly SMEs, could be installed in the first stage. Currently, Clúster Cannabico analyzes five plots of between 70 and 100 hectares on the outskirts of the city of San Pedro where it could set up the park.

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The initiative that will create the first industrial cannabis park in the country

“The first thing we must do is to conduct a study of feasibility for these lots, to evaluate where we will finally settle. Now, we focus on this phase”, says Pablo Fazio, president of the company, and adds: “There are a lot of instances that we must manage, some fall in the public sphere and others in the private sphere. “

The choice of San Pedro is due to the fact that it has great soil and climate conditions, direct accesses from the main urban centers, and important hotel infrastructure, which will enhance production and its value chain.

Once approval is obtained and the choice of land is made, together with a group of partners that he has gathered for the initiative, Fazio plans to establish a trust or seek a private contribution to accompany the injection of his own capital. “We will figure it out on the fly,” says the head of the project.

One of the most ambitious cannabis projects in Latin America

The plan is that the construction of the complex will be completed within six months once work begins. The executive clarifies that Clúster Cannabico will not be a producer, but will become the developer of the park, acting as “a vehicle for companies to find their place.”

“This is one of the most ambitious cannabis projects in Latin America, where the state generates incentives for the private sector to find an environment conducive to development”, says Fazio.

The public-private initiative is part of Law 27,350 / 17, which opened the doors to people suffering from refractory epilepsy to access cannabis preparations that are imported by clinical prescription and for therapeutic use. 

Later, the regulation enabled scientific-medicinal research and the palliative use of the cannabis plant. However, there is still no regulation that allows local production in Argentina. Only therapeutic users are allowed to grow the plant at home for this purpose.

Therefore, for the project to prosper, it is necessary to implement a regulatory framework that today is non-existent. Fazio is confident that this step will be taken soon. 

“We have been talking since last year with the National Directorate of Regional Development and the Ministry of Economic Development of the Nation. The proposal received a huge reception and generated enthusiasm. We have signs that we will make progress,” he says.

Some governmental figures are in favor of cannabis

A few weeks ago, the Minister of Productive Development, Matías Kulfas, declared himself in favor of the growth of the activity. Kulfas called cannabis a potential factor of economic development in a virtual talk organized by Quinquela Fondos. The official highlighted its importance within the pharmacological industry.

“There is a lot of interest from the private sector in investing in this industry, so more and more companies are seeking to be part of it. But for that to happen it is necessary to incorporate regulatory frameworks”, insists Fazio, and lists projects that some companies have in their folders: cosmetics, yerba mate infused with cannabis, tea, chewing gum, dry pasta, and even veterinary products.

Medical cannabis is not the only business vertical that promises growth in the country. Other industrial uses are also encouraging. As there is no formal market at the local level, there is still no official data on how much the business moves in Argentina. In the United States, the sector generates revenues of approximately $17 billion a year and grows at a rate of 25% per year.

In addition, the industry is emerging as a possible generator of employment. According to the Colombian Association of Cannabis Companies, 17 jobs are created for each cultivated hectare. “It is an indicator of the opportunities that will be generated at the local level. The companies that settle in the park will hire professionals, but so will we, given that we will need labor for the construction of the center”, concludes Fazio.


(Featured image by Taryn Elliott via Pexels)

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