Why Uruguay’s Cannabis Legalization Isn’t a Great Success

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According to 2021 data published by the Institute for the Regulation and Control of Uruguayan Cannabis (IRCCA), the legalization of cannabis in Uruguay has helped keep drug traffickers out of the market.

However, the legal supply of cannabis remains insufficient and only 27% of cannabis consumers buy it legally. The percentage rises to 39% if we take into account that some buyers share the product with their friends and acquaintances, a percentage that has struggled to increase since the introduction of legalization.

The legalization of cannabis in Uruguay introduced three mechanisms for the acquisition of cannabis: self-cultivation, Cannabis Social Clubs and purchase in pharmacies. The State supervises these 3 access routes and limits them for the moment to people residing in the country, although Congress plans to open the market to passing tourists.

About 49,630 Uruguayans are registered to buy from the 28 pharmacies in the country that sell cannabis, 14,035 grow at home and 7,166 are members of the 249 registered Clubs.

“Cannabis regulation has been more effective than law enforcement in hitting drug trafficking,” says Mercedes Ponce de León, director of the Cannabis Business Hub and ExpoCannabis Uruguay.

Legalization has also enabled the birth of a nascent medical cannabis export industry. According to data from the Uruguay XXI information portal, in 2020 exports doubled compared to the previous year, reaching 7.3 million euros. In 2021, revenues reached 8.1 million euros and in the first half of 2022, 4.4 million euros.

At the moment, exports focus on flowers for medical use and are mainly destined for the United States, Switzerland, Germany, Portugal, Israel, Argentina and Brazil.

Upcoming fixes

The government now plans to sell cannabis with more “oomph” in pharmacies by the end of the year in order to attract more consumers to the legal market. The varieties available are indeed limited in number and in THC, at 9%, a relatively low percentage.

“There are some users who are asking for a higher percentage of THC or more variety, and that conspires against the efficiency of the system because it means that some consumers who might be buying from pharmacies are moving to other regulated market options or to the black market,” explains Daniel Radío, Secretary General of the National Drugs Council.

Authorized pharmacies are also few in number compared to the total population. The latter also encounter difficulties with the banking system due to international legislation around cannabis.

Another barrier to membership, cannabis users must register on a national register. Some prefer not to give their identity, even if the information is only used for consumer research, according to the government.

As for the clubs, they can only have a limited number of members (between 15 and 45), and in many of them there is even a waiting list to register. The regulations establish that the stock of each member cannot exceed 40 grams per month.

Clandestine self-cultivation

Experts say the biggest suppliers to the illegal market are now small local growers who grow their own plants without registration.

According to Marcos Baudean, professor at ORT University in Uruguay and researcher for the Monitor Cannabis project, “there are many more home growers who do not appear in the registers”, so it is impossible to make a concrete estimate of the share of the black market.

Despite this, the professor assures that unregistered growers “have already exceeded” the number of trafficking networks in the sale of cannabis. Nevertheless, drug traffickers continue to be present in Uruguay, mainly by selling the famous “prensado”, bricks of very cheap and low quality pressed cannabis.

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