The Success, Potential, and Flaws of Uruguay’s Legalization Experiment

MONTEVIDEO, URUGUAY – Since President José Mujica signed the rules for the legal cannabis market to officially begin in Uruguay back in mid 2014, Uruguay has started to see beneficial successes within their country’s recent legalization experiment.

Uruguay’s Legal Market Allows Home Growing and Sales

Surprisingly, the consumption of cannabis has been legal in Uruguay for quite some time. However, before President Mujica implemented the legalization experiment in order to diminish dangerous drug cartels and put them out of business, no one was able to legally obtain cannabis. Growing and buying cannabis was deemed illegal.

Under Uruguay’s new legislation, residents who consume cannabis are able to grow up to six cannabis plants in the privacy of their homes. In addition, cannabis users are able to join a collective or “cannabis club,” by paying fees to be a member. Consumers are then able to purchase cannabis that is cultivated and distributed by the collective they are apart of.

Julio Calzada, head of the National Drug Commission, declared that Uruguay’s government had registered 1,200 growers, and registered about 500 cannabis clubs back in December of 2014. This progress, according to Calzada, is “encouraging.”

Furthermore, growing and distributing cannabis seems to have a lot of interest in Uruguay. In mid December, Uruguay enacted its first “cannabis fair” called Expocannabis, which marked one year since the cultivation and sale of cannabis was legalized in the country. Catered primarily to growers, Expocannabis reportedly had an attendance of roughly 6,000 people.

Uruguay May Influence Cannabis Policy Reform

President Jose Mujica, who has been an outspoken opponent of the failed US-led war on drugs, knew that by signing the legalization measure into law, his country would become an “experiment” for the rest of the world to observe — and it has been exactly that. Just as each state is watching the legalization experiments in the U.S., many countries around the world are eager to see the experiment results in Uruguay, especially those within the region.

According to the Transnational Institute Drug Law Reform Project, there are eight Latin American countries that are either very likely or somewhat likely to soften their cannabis policies in the near future. As Uruguay continues to work on their overall legalization effort, it is evident that the outcome will influence other countries to either implement or dismiss any legalization efforts.

Experiment Shows Potential For Eliminating Drug Cartels

Earlier last year, GlobalPost indicated that the price of cannabis bought on the illicit black market has gone down after legalization. Although this could pose a problem for residents still buying from the black market rather than from licensed clubs or growing in their own home, it is still a piece of the beginning of victory for the legalization experiment – running the drug cartels out of business.

As part of the main reason why President Mujica decided to implement a legalization system, the continuing price drop of cannabis on the streets from local growers will help make the dangerous drug cartels slowly (or quickly) go out of business. Moreover, the heavy increases in the amount of growers and clubs in Uruguay will help expedite the removal of drug cartels even faster.

Legalization Experiment Has Imperfections

According to Calzada back in 2013, top-grade cannabis was to cost $1 a gram in order to compete with the black market and divert all consumers away from it.

In comparison to eighths virtually anywhere else, that is extremely cheap. For instance, in comparison to the US legal markets, the cheapest gram for a cannabis strain on the recreational menu at Medicine Man in Denver, Colorado costs almost $10. However, most strains on the menu cost $12.80 per gram. This is a little concerning economically if every top-grade cannabis gram costs only $1 within the Uruguay market.

Nonetheless, it would be an efficient way to compete effectively with the black market. Only time will tell whether or not the government will be able to economically commit to the claim.

However, an even bigger issue is that there are no top-grade $1 grams to purchase from the government – yet, at least. Even though it has been over a year since President Mujica signed the legislation into law, there is still no way of purchasing cannabis legally besides through established cannabis clubs.

There is still hope for government-grown cannabis to be up for sale soon. Back in August of 2014, a government official claimed at least 20 companies bid for the right to supply Uruguay’s pharmacies and only five of them were to be chosen. News about the five companies chosen should arrive well before the end of 2015. Once the companies are chosen, the main issue of purchasing cannabis legally will be gone, and if they are able to successfully and consistently sell $1 grams of cannabis to consumers, the drug cartels will be gone as well.

How Are Uruguayans Going To Purchase Cannabis?

One of the last imperfections that may come initially out of the experiment is how and where the government is to sell the cannabis. For its first harvest, Uruguay’s government has planned to sell cannabis in pharmacies, although there seems to be a bit of uncertainty whether that will actually occur or not.

“There’s going to be a strict and close evaluation of this law and its effect on society,” – Tabaré Vázquez

Tabaré Vázquez, who will be taking office as Uruguay’s president on March 10, stands by his predecessor’s (Mujica) legalization law. However, Vázques shares plenty of concerns about the law, including the pharmacies. “I don’t think a pharmacy is the right place to sell marijuana,” he stated in December.

In addition to Vázquez disagreeing with cannabis being sold in pharmacies, reportedly the pharmacies don’t want to sell it whatsoever. Luis Lacalle Pou, who was Vázquez’s presidential candidate opponent, stated in August, “The entire project is not workable. The pharmacies don’t want to sell the drug and nobody is going to register as a user, as the law obliges.”

Although there are plenty of questions to be answered, and many flaws to be worked on, it is only the start to Uruguay’s legalization experiment. And it is just that – an experiment. With room for more success and/or flaws down the road, it will be interesting to see the outcome over the next year and beyond as the rest of the world watches.

“There’s going to be a strict and close evaluation of this law and its effect on society,” Vázquez warned. “This path proposed by President Mujica is one that I agree with. It might be the solution – but it might not be.”