One Year After Law's Approval, Uruguay Waits for Commercial Cannabis Sales

So far Uruguayan officials have green-lighted homegrown cannabis, cannabis clubs, and hemp cultivation. But a year after Uruguay's historic marijuana law was signed, the specifics of its signature provision -- a regulated commercial cannabis market -- remain unclear.

Last month, President Jose Mujica signed an executive decree that marked the latest chapter in the implementation of the 2013 law. The order issues a series of regulations authorizing the cultivation of hemp for industrial purposes, making Uruguay the first country in South America to do so.

Because of the wide variety of industrial uses for hemp, the development has been heralded by some as one with major economic implications for the country. Considering Uruguay’s reliance on its export-oriented agricultural sector, this is indeed an important comparative advantage.

The move comes after the Institute for the Regulation and Control of Cannabis’ (IRCCA) rollout of cannabis clubs and home-growing registries, and just as the country marked one year since Mujica signed the law on December 23, 2013.  And as El Observador reports, some individuals familiar with the implementation process say that authorities are preparing to release guidelines for obtaining medicinal marijuana in the near future.

While all of these elements are important, the most high-profile part of the law remains in the development stage. Over the past six months the public has seen little progress made in the official plan to authorize three to five companies to grow the drug, and for pharmacies to sell it. The land has been set aside, and there has even been some noise from interested parties in the press over the extent that officials should cover the cost of utilities in the associated greenhouses.

But according to sources in the IRCCA, the initiative is still in the bidding process. There are reportedly 18 firms still in the running, three of which are Uruguayan while the rest are either foreign companies or joint bidders involving Uruguayan and foreign partnerships.

This delay may seem frustrating for many observers, even unnecessary from a purely political analysis. Now that the Frente Amplio has emerged from elections with its congressional majority intact, and with President-elect Tabare Vazquez vowing to implement it to the letter (albeit under close monitoring), the main political obstacles to the law have been overcome.

Still, it seems Uruguay watchers will have to be patient for the country to roll out commercial sales. Drug czar Julio Calzada has told reporters that marijuana could be made available in pharmacies by March, but El Observador has noted that even if the final growers are selected in the near future it is unlikely the drug will go on sale before March 1, when Vazquez takes office.

Until then, analysts will have to trust that Uruguay is placing more emphasis on implementing the law well than on doing so quickly. The IRCCA certainly appears committed on this front. The goal is for commercial growers to commit to a business plan that successfully undercuts the black market, and officials at the institute have told this author they are also studying the possibility of offering different strains of the drug for different prices, based on the purity of the product.