Legal Marijuana in Uruguay

With the way legal marijuana was implemented in Uruguay, growers were given no room to succeed. Now they’re turning to hemp cultivation because hemp has a much bigger market while being less regulated by the government. With marijuana illegal in most countries, Uruguayan producers will have to turn to hemp if they want to enter the global market.

We go into the details of the Uruguayan Marijuana Laws, the problems they’re causing for producers, and a potential solution.

Uruguayan Marijuana Laws

On December 10th of 2013, Uruguay became the first country to legalize marijuana. However, all sales of marijuana must go through the federal government, which was supposed to set up dispensaries and sale prices. The price for a gram was configured to be $1. All customers must be private citizens of Uruguay and register with a database overseen by the Ministry of Health. Registered residents are allowed to buy up to 40 grams a month.

The Problem

The low cost of marijuana means much fewer profits for growers. The price was set at $1 to match the street value of marijuana in Uruguay to “snatch away the market from the drug traffickers.” Unfortunately, pharmacies are allowed to charge their customers a 30% markup, so drug dealers are still in the running.

Another issue is the government also controls who a grower can sell to, and this can be quite limiting. Uruguay only has a population of 3.3 million and farmers can only sell to registered patients with the government’s permission.

Most people won’t even register with the program because it requires a fingerprint scan and registering into a government database. One Uruguayan marijuana activist told Vice “I think the only ones who are going to register are the young people, the ones who didn’t live under the dictatorship… All of us who know what the government can do to people don’t want to.” If an anti-marijuana leader is introduced to the country, the people feel having their names on that list will lead to undesirable consequences.

According to two growers in Uruguay all these limiting factors are making the legal marijuana unappealing to growers and without growers, there will be no marijuana for those that might need it.

Solution for Growers

Luckily there might be a solution, the two Uruguayan producers of marijuana plan to enter the global hemp market. Hemp and hemp extracts can be used in food, cosmetics, and medicine. The current global market for hemp is at $1 billion USD.

Industrial hemp and CBD/hemp oils are becoming more popular. Hemp cultivation offers a safer and more profitable way for Uruguayan farmers to operate.

International Cannabis, the owner of Uruguay’s largest farm company, plans to begin planting hemp in September. With this move, the company can generate income without having to compete with the 5,000 registered home growers and drug traffickers in Uruguay.

Final Hit

Hemp offers a solution to some but not all of the issues with Uruguay’s marijuana laws. Growers will be able to make better livings branching into the hemp market, which will allow them to continue to cultivate marijuana for Uruguayan citizens.