Key Takeaways

• Cannabis law and regulations:
  • Medical cannabis was first approved by the Executive Order 2015-10 in 2015. On July 9, 2017, Act No. 42-2017 was signed into law, replacing the original executive order and setting up a legal framework for the Puerto Rico medical cannabis industry.
  • The Medicinal Cannabis Regulatory Board is responsible for creating regulations and licensing businesses.
• Licenses available:
  • Cultivation; Dispensary; Manufacturing; Transportation; Testing Facility.
• Products legal:
  • Approved product forms include oral or sublingual drops; oral inhalers; topicals, ointments or creams; suppositories; transdermal patches; edibles; concentrated edibles; vaporization of flower, leaves or “trim”; vaporization of concentrates; capsules or tablets; tinctures; concentrates; any other route that the Board authorizes.
• Taxes:
  • Puerto Rico’s sales and use tax (SUT) applies to medical cannabis. There are no specific taxes on medical cannabis.
• Market:
  • As of March 2025, there were 483 licensed cannabis establishments: 81 cultivators, 38 manufacturers, 327 dispensaries, 1 laboratory, 35 transporters, and 1 research facility.
  • Puerto Rico’s total medical cannabis sales (dispensary, cultivator, and manufacturer sales combined) were $182 million in 2024 – down from $231 million in 2023. This mainly occurred due to a decline in dispensary sales which is attributed to falling patient numbers and consequently reduced patient spending.
  • According to January 2025 patient data, the most common conditions for which patients use medical cannabis are insomnia (used by 60.06% of patients), anxiety disorders (55.71%), and conditions that cause chronic pain (41.49%).

Puerto Rico Cannabis Legalization

In 2015, Gov. Alejandro J. García Padilla approved the Executive Order 2015-10, authorizing the medicinal use of cannabis. The Secretary of the Department of Health was given three months to issue a report outlining how the new law will be implemented. Nine months later, Regulation 155 was adopted which permitted medical marijuana cultivation, manufacturing and distribution.

In 2016, Regulation 8766 was passed which replaced Regulation 155 in creating a framework for the “use, possession, farming, manufacture, dispensation, distribution and investigation” of medical cannabis and introduced several changes. Sales began in January 2017.

How to Start a Cannabis Business in Puerto Rico?

On July 9, 2017, Puerto Rico Gov. Ricardo Rosselló signed into law Act No. 42-2017 which replaced the original executive order and set up a legal framework for the Puerto Rico medical cannabis industry, including the creation of a Regulatory Board and a control structure. The Medicinal Cannabis Regulatory Board (the Regulatory Board) was tasked with creating regulations and setting up licensing requirements. In Puerto Rico, only physicians licensed to recommend medical cannabis can issue a recommendation to a patient with a medical condition that qualifies for medical cannabis treatment under the Puerto Rico law. The patient can then obtain a medical cannabis card and purchase medical cannabis from a dispensary.

The law includes a reciprocity provision which means a patient with a valid medical cannabis card in one state, can purchase, use and possess medical cannabis in another state. This makes Puerto Rico’s medical cannabis accessible to medical tourists from other states and therefore increases the demand for it.

In July 2018, Regulation 9038 was enacted to further specify “the requirements for authorized physicians and allowed for Puerto Rican dispensaries to serve registered patients” from US states and other countries with legalized medical cannabis.

Approved product forms include oral or sublingual drops; oral inhalers; topicals, ointments or creams; suppositories; transdermal patches; edibles; concentrated edibles; vaporization of flower, leaves or “trim”; vaporization of concentrates; capsules or tablets; tinctures; concentrates; any other route that the Regulatory Board authorizes.

According to a statement from the Regulatory Board, vaporization of medical cannabis flower may be authorized by a physician only when the patient is diagnosed with a terminal condition or when the physician determines that there are no other suitable or adequate treatment and/or remedy alternatives, or that it is the most suitable way to treat the medical condition.

On December 13, 2024, the Regulatory Board adopted a moratorium which temporarily suspended the submission and receipt of new applications for all types of cannabis businesses. The moratorium on the submission and receipt of new applications for laboratory, manufacturing, transportation, and research licenses was lifted on June 1, 2025. Applications for cultivation and dispensary permits are still suspended until the Board evaluates and analyzes the results of a market study or until December 31, 2025, whichever is earlier.

Puerto Rico Cannabis Market

Puerto Rico allows medical cannabis for patients diagnosed with one or more of the state’s 24 qualifying conditions. Patient numbers peaked at 124,592 in July 2022, after which they gradually began to fall. In January 2024, there were 114,818 registered patients according to data released by Puerto Rico’s Medicinal Cannabis Regulatory Board – around 3.5% of its population. Around half of all medical cannabis patients are aged 21-40. However, in January 2025, patient numbers began to recover, rising to 120,316 and as of March 2025 (most recent data published by the Regulatory Board), there were 118,661 patients. According to January 2025 patient data, the most common conditions for which patients use medical cannabis are insomnia (used by 60.06% of patients), anxiety disorders (55.71%), and conditions that cause chronic pain (41.49%).

While medical cannabis patient numbers have seen a recovery, the number of doctors registered to recommend medical cannabis as treatment has been on a continuous decline. In October 2021, 219 doctors were registered to recommend medical cannabis but as of January 2025, only 125 were registered.

From 2017 to 2022, the number of licensed dispensaries grew from just 36 to 277. As of March 2025, there were 483 licensed cannabis establishments: 81 cultivators, 38 manufacturers, 327 dispensaries, 1 laboratory, 35 transporters, and 1 research facility. Additionally, 80 establishments were in the pre-qualification process.

According to the Puerto Rico Department of Treasury, medical cannabis sales in Puerto Rico have increased 1,700% since 2018, from $12.7 million in sales in 2018 to $229.2 million in 2021. In 2022, Puerto Rico had about $250 million in estimated annual medical cannabis sales, as reported by Forbes, making it the largest cannabis market in Latin America.

According to data from the Regulatory Board, Puerto Rico’s total medical cannabis sales (dispensary, cultivator, and manufacturer sales combined) were $231 million in 2023. In 2024, they fell to around $182 million. This mainly occurred due to a 92% fall in dispensary sales from $106 million in 2023 to $8 million in 2024. The decline in dispensary sales is attributed to falling registered patient numbers and consequently reduced patient spending. However, the close to 5% increase in patient numbers from January 2024 to January 2025 suggests a recovery in patient demand for medical cannabis and may signal a rise in dispensary sales in the near future. Manufacturer sales also fell from 2023 to 2024, but cultivator sales actually rose by 66% from $98 million to $163 million.

The medical cannabis market in Puerto Rico is projected to exceed $280 million by 2030, according to Statista.

Because of the state restriction on smoking, about 34% of products sold in Puerto Rico were edibles comparing to the U.S. state average of 17.1%.

Puerto Rico has a large pharmaceutical industry and in 2020, its total pharmaceutical and medicine manufacturing exports were $12.9 billion, 19.3% of total U.S. exports, according to data from U.S. Bureau of Labor Statistics. This positions it as a major potential player in the medical cannabis product manufacturing industry.

Puerto Rico Cannabis Industry Infographics

How Can Cannabusinessplans Templates Help Start or Grow Your Cannabis Business?

The majority of cannabis licensing programs require the submission of a business plan as part of the application for a cannabis license. Even if it is not mandated by law, a business plan is essential for securing funding and assisting an applicant in understanding how much money it will take to start a cannabis business and how much profit it could make.

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Puerto Rico Hemp Industry