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Uruguay Was The First Country to Legalize Cannabis – How Are They Doing Now?

cannabis uruguay
Written by Sarah Friedman

Sometimes with our news cycle, it’s easy to forget that Europe and America are not the centers of the world. A lot of interesting cannabis law takes place around the globe with Uruguay being an unexpected contender for most liberal concerning cannabis use.

Long before Canada made headlines in 2018 for their sweeping legislation legalizing cannabis nationwide, and not long after Colorado and Washington completely went against U.S. law in 2012 by passing state legislation to legalize recreational cannabis in those particular locations, Uruguay passed legislation to completely legalize the recreational use of cannabis in 2013, with legislation for commercial use passed in 2017.

While some countries can’t even decide whether to legalize cannabinoids like CBD (cannabidiol) that have shown in testing to have significant medical benefits without the psychoactive effects, Uruguay has been way past that for quite some time.

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Uruguay and drugs

Even before Uruguay made history by legalizing cannabis use on a national level, it already exercised some pretty lax cannabis laws. In fact, unlike many places, Uruguay never did criminalize drug use, making decriminalized personal use official in 1974 by Decree Law 14.294. The law did not specify how much ‘personal use’ actually meant, leaving that specificity for judges to decide on a case-by-case basis, but allowed for a ‘minimum quantity’, however broad that terminology is. This formalization by law still outlawed the growing and selling of cannabis, crimes that were still punishable by jail time under Uruguayan law.

In 1998, an update was made through law 17.016 which changed some of the language, for example changing ‘minimum quantity’ to ‘reasonable quantity’ (I don’t see the difference either), and which reduced legal consequences for both growing and selling it.

Wait a second, is Uruguay this liberal on everything?

As a quick aside, and to add some context, Uruguay separated their church from state officially in 1918 – the first of that region to do so – and added the right to vote for women into their 1932 constitution. In 2008 Uruguay decriminalized abortion, which then became legal in 2012 without question during the first trimester.

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\While you might be thinking that this doesn’t sound super groundbreaking, consider that Uruguay is only the third country in Latin America to allow for legal abortions, and only the second (along with Guyana) to allow for it on-request (without it being the result of a rape or for medical purposes).

Same sex marriage was voted in, in 2012, and legalized in 2013. All of this is to show that Uruguay is a bit looser than some of its neighbors, a mentality that can be seen in its approach to human rights and general social acceptance.

Uruguay legalizes cannabis

In 2012 Broad Front, Uruguay’s power-holding coalition, brought up the idea of legalizing cannabis with all production and distribution being controlled by the government. This would allow the government to sell cannabis directly to its citizens, a model that had never taken place before.

This, rather expectedly, drew wrath from the UN for essentially trampling on the 1961 convention on narcotics, and at the time, only a small percentage of the population approved of the measure. Nevertheless, it made its way through the Uruguayan government passing into law on December 10, 2013.

As tends to be the case, it took another 3.5 years for the structural aspects to be worked out, and in 2017, the official provisions of the law passed, making Uruguay the first country to put forth a federally regulated nationwide retail market for cannabis. The following measures were stipulated in the law, amongst other more technical ones:

  • Citizens 18+ can grow six plants in a year or up to 480 grams.
  • Smoking clubs of 15-45 members can be formed wherein 99 plants can be cultivated in a year.
  • Citizens will have to register in order to buy cannabis.
  • Cannabis will be sold through licensed pharmacies.
  • Registered participants can buy up to 40 grams a month from a pharmacy.
  • All promotion and advertising is banned.

Mounting tensions and a new solution

The idea to legalize didn’t come out of nowhere. While Uruguay has proved its place as a more liberalized country within its region, legalization was a result of several factors, one of the big ones being to curb the illegal drug trade. It was, essentially, meant to be a different take on the war on drugs with the aim of taking money away from criminal organizations.

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The war on drugs was seen as a massive failure, with this measure taken as a possible countermeasure. When initially bringing it up, president José Mujica made the astute point that “The effects of drug trafficking are worse than those of the drugs themselves.” While forming a government monopoly on it shows a substantial desire to funnel drug money through the government, it is a very good point.

Though there might be many reasons for a war on drugs, the simple idea of relieving issues related to drug trafficking violence is an important one, as it often effects those unrelated to the trade. The problem with having a country where a substance is decriminalized, but the avenues of getting it are not, means there’s going to be some illegal trade going on, in this case mainly from Uruguay, smuggled in through gangs.

Uruguay and the Netflix effect?

The government initiative was sort of like Netflix. Before Netflix there was a lot of illegal downloading going on, and no real incentive to stop it. Netflix came out making it easy to get so much content that it became quicker, easier, and more convenient than downloading, moving people in droves from the illegal measures, to the standard and approved ones, and Netflix collected the money.

The idea was to funnel money away from illegal means and to provide content makers with something for their output rather than having it all pirated away, but it worked because it brought convenience, and seemingly endless options, to people who didn’t have the time or energy to do more if they didn’t have to.

In the case of Uruguay, the government acts as Netflix, bringing the population into their streamlined platform where they control production, sales, and all requirements for products. The benefits of such a model are clear when fighting criminal organizations, but the questions it brings up in terms of sustainability, and what a model like this will look like in the future, are still very much there.

And now…

The initial law might have passed in 2013, but the official commercial program has only been in place since the legal framework was passed in 2017. It should also be noted that there was a change in president in 2015 with Tabaré Vázquez taking over from Mujica, a move that did not derail the law, but which might have affected its implementation. As of early 2020, these are some of the prevailing points regarding Uruguay’s cannabis use:

  • Users can access cannabis in three ways legally: growing their own, buying from a pharmacy, or taking part in cannabis clubs.
  • There are over 41,000 registered consumers.
  • Over 8,000 home growers.
  • 158 cannabis clubs exist with almost 5,000 members.
  • As of February 2020, the retail price set by the government for 1 gram is approximately $1.23.
  • There are only a few strains to choose from, and none of them have high THC.

Issues that Uruguay faces

Uruguay’s strict government limitations have created a limited supply. The 4,000 kg sold recreationally since the beginning of the program is estimated to be low as a result of supply issues. This is in part because only two companies have currently been given the green light for cultivation. New licenses given out for production are expected to ease the supply shortage issues.

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Another issue facing Uruguay, and any country looking to legalize, is that of banks. Banks can choose if they want to work with a particular company or industry and many banks are reluctant to work with cannabis companies, even in legalized countries. Even in Uruguay where cannabis is now legal, banks are reticent about accepting drug money, especially if they work with countries with strong anti-cannabis laws.

Funny enough, US banks pose a lot of the problem, even though some US states have already legalized. In fact, in order for pharmacies to continue running in Uruguay, they had to opt for local banks, or banks not related to America.

Into the future…

When Uruguay introduced its legalization policy back in 2012 it was thought of as an experiment in the war against drugs. Now in operation for a few years, the country is still working out the supply and banking kinks, and still working on streamlining the system. A final thought on how relevant or useful it has been in curbing violence or dampening the illegal cannabis trade is still hard to say.

The black market continues (and likely will until more and better options are made available), and crime rates haven’t fluctuated enough to make any statements about connections between the two. The result of such measures can often take years to really spot significant trends for. Nevertheless, Uruguay took a major step, and has been dutifully sticking to it, working through the issues, and being a general pioneer in the move toward a society with legalized cannabis.

Thanks for dropping by, your hub for all things cannabis, CBD, hemp, and legal-weed related. Come back soon and make sure to subscribe to the CBD Business Weekly Newsletter to keep up-to-date.

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About the author

Sarah Friedman

I look stuff up and and write stuff down, in order to make sense of the world around. And I travel a lot too.