RIO DE JANEIRO, BRAZIL – The first country in the world to legalize most uses of marijuana, Uruguay is trying to take business away from illegal sellers and strengthen its cannabis industry by allowing foreign visitors to buy marijuana.
According to Daniel Radio, secretary-general of the National Drug Agency, the government of Uruguayan President Luis Lacalle Pou could unveil its plan as early as this year to build consensus and political support.
Read also: Check out our coverage on Uruguay
The goal is not to promote Uruguay as a cannabis tourism destination but to lure tourists away from the black market and into the regulated market, according to Remo Monzeglio, secretary of state for tourism.
Tourist access to legal cannabis would dramatically increase the industry’s potential customer base in the country by 3.5 million.
Normally, millions of Argentines and Brazilians flock to the country’s beaches during the Southern Hemisphere summer, which runs from December to February. But the pandemic caused those numbers to dwindle as the country strictly limited the number of foreign visitors.
Uruguay plans to reopen its borders to all fully vaccinated foreigners starting November 1.
There is a prospect that Uruguay could open its regulated marijuana market to tourists “if we get a good proposal,” Radio said in an interview. “It’s doubtful for the coming tourist season, but I don’t rule it out.
Under Uruguayan law, adult citizens and foreign residents on a state registry can grow their own marijuana, join a cannabis club or buy 40 grams per month at licensed dispensaries.
Monzeglio said he proposed charging foreign tourists higher prices and using the proceeds to fund rehabilitation and addiction treatment programs in a separate interview.
A presidential decree would likely be the quickest way to open dispensaries and possibly cannabis clubs to tourists who register in the database. To waive the database requirement, Congress would have to pass a law, he said.
Uruguay pioneered cannabis legalization when lawmakers passed a sweeping law in 2013 that supporters said would strengthen personal freedom, undermine drug gangs and generate exports. But nearly eight years later, gangs are still in business, annual exports are still under US$10 million, and competition intensifies as more countries accept cannabis.
“I think the growth opportunities have been overly optimistic because we’re not alone,” said Radio, who also heads the cannabis regulator Ircca.
Cannabis exports have more than doubled to nearly US$7.5 million by 2020, but that total is still a far cry from the hundreds of millions of dollars some industry players had predicted.
Colombia is also emerging as a contender for cannabis investment thanks to favorable regulations and some of the best growing conditions in the world.
Still, Uruguay can count on new rules to accelerate exports, as well as its reputation as a transparent and predictable place to do business, to maintain its prominence in the cannabis industry, Monzeglio said.
Ircca approved 56 licenses for medical cannabis cultivation, research and development, and medical and consumer product manufacturing.
“Some investments are being made that are related to industrialization and value-added processes. And we have to bet on that because that’s the only way Uruguay will have competitive conditions,” Radio said, referring to the country’s high labor and energy costs.
With information from infobae
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