The Hemp Boom No One Saw Coming: Could This Latin American Country Become A Global Leader?

By Javier Hasse via El Planteo

Ecuador is rapidly emerging as a key player in the non-psychoactive cannabis and industrial hemp industries. Since regulation began in 2019, the market has shown steady growth, driven by favorable climate conditions, clear regulations and increasing international demand. With a projected revenue of $17 million by 2025 and exports already underway, the country is positioning itself as one of the region's rising economies in this sector.

A Growing Market

The Ecuadorian hemp and non-psychoactive cannabis market has expanded significantly. According to the country's Cannabis and Hemp Industry Cluster, the sector generated $7.2 million in revenue in 2023 and is on track to more than double that by 2025.

Currently, more than 705 companies operate within the sector, primarily in Guayas, Imbabura and Pichincha. Additionally, 2,277 hectares (5626 acres) have been authorized for cultivation, though not all are actively planted. Key challenges remain, particularly access to financing and the density of active crops.

Ecuador's International Footprint

One of the biggest drivers of industry growth has been exports. Since December 2023, Ecuador has been shipping biomass to the U.S. and derivative products to Iceland and France. This expansion follows an 80% increase in international demand in 2024, leading to a 40% rise in production license applications.

According to Eduardo Monge, an executive from the industry's trade association, "We are exporting around one to two containers per month to the United States." These exports are solidifying Ecuador's position as a key production hub for international markets.

Employment Impact

The industry is also driving job creation. So far, it has generated 30,000 direct jobs and 144,000 indirect jobs. This employment boom is fueled by product diversification, which includes cosmetics, supplements and food products.

However, despite promising numbers, challenges remain. There is still a gap between employment potential and actual cultivation density in approved areas. According to Monge, the most sought-after licenses are those for CBD medicinal cultivation, industrial hemp for fiber, and final product processing.

Competing In The Latin American Market

Compared to other Latin American countries, Ecuador is making rapid progress. While Uruguay and Colombia have established strong regulatory frameworks and attracted major investments, Ecuador stands out for its ideal climate conditions and low production costs. Unlike Mexico, where cannabis regulation faces political hurdles, Ecuador has successfully implemented a clear legal framework in a relatively short time.

Future Outlook

While growth is evident, the next challenge is to consolidate progress and maximize export opportunities. Key steps include:

• Improving access to financing
• Encouraging cultivation in authorized hectares
• Enhancing export infrastructure

Ecuador is at a turning point. If the industry maintains its growth trajectory and overcomes existing hurdles, the country could become one of Latin America's leading non-psychoactive cannabis powerhouses.

Photo via Shutterstock

This article is from an external unpaid contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.