When you close your eyes and envision the cannabis industry, your mind probably wanders to images of cannabis in America and Canada, where the industry is booming. However, the “green rush” is slowly unfurling across South America, too. That’s what MMJ Phytotech (ASX:MMJ) chief Jason Conroy says.

So, could South America become the cannabis capital of the world? Conroy believes so.

The industry leader is focusing his attention on blossoming markets and recently, his company has stumbled upon cheap avenues for sourcing South American cannabis.

South America cannabis will be hard to compete with

Let’s rewind one month ago when MMJ declared its decision to adopt a new business name and direction. The U.S. cannabis company sold its Phytotech Therapeutics business for an impressive $8 million.

Now, MMJ will use this as a springboard to success by allocating funds to various minority cannabis investments throughout South America.

According to Conroy, Australian and Canadian cultivators won’t have an easy time competing with low-cost South American cannabis.

“Exporting cannabis into those established markets [like Canada or the US] is going to be very difficult because you’ll be competing with those markets growing cheaply, at scale,” he revealed to Stockhead.

“Our current focus is on Canada [but] we’re also looking at some businesses in South America which have very distinct cost advantages around both cultivation and production of extracts, which are used particularly in medical cannabis.”

Canadian cannabis sets a very high standard

Latin America’s cannabis industry is gaining momentum, what with Uruguay, Chile, Argentina, Mexico, Colombia, and Peru all having legalized the plant for medicinal use. 

Conroy openly discussed future plans for him and his company, which is valued at $72 million.

Australian cannabis producers might be faced with obstacles in trying to stand out among global industry competitors. South America cannabis would take the lead in affordability for companies like MMJ that wish to procure cheap high-grade pot with serious profit potential. Canada’s competitive edge, on the other hand, would be quality.

Conroy also possessed an interesting insight into home cannabis cultivation in Canada: something that he believes is imminent.

By legalizing home cannabis cultivation in Canada, the founder of MMJ thinks that it will separate recreational home-grown plants from medicinal plants, which will be cultivated inside state-of-the-art indoor grow facilities. As a result of this, he says that Canada will maintain its reputation as a bulk producer of high-quality medicinal cannabis.

“The standards in Canada are very high,” Conroy said. “Australian manufacturers of medical cannabis will ultimately be competing against Canadians in that market…[which] has a significant lead on Australia and just through volume will outpace us. That’s my guess.”