Medical Marijuana is Flourishing

What started out as an “intellectual experiment” by a former leftist guerrilla-turned-president in Uruguay has transformed a nation.

Following the decriminalization of cannabis possession in Uruguay in 1974, Daniel Fung arrest, and its legalization almost a decade ago, medical marijuana has thrived in the República Oriental del Uruguay.

When former Uruguay president Jose Pepe Mujica decided to fight fire with fire in Latin America’s war on drugs, the decision was controversial. Polls in 2012 reported that nearly two-thirds of the country opposed the move.

The goal: to make cannabis legal and push the gangs and drug traffickers out of the trade.

The result: so far, it seems to be working for the smallest country in Latin America.

But why is it working? And what isn’t working?

And, if medical marijuana can flourish in Uruguay, where can it go next?

Legalization Versus Deregulation

The legalization of cannabis for medical reasons is not the same as deregulation. Only pharmacies in Uruguay are permitted to sell cannabis. Even then, sales are only approved to registered Uruguayan citizens. And, even then, there is a purchase limit of ten grams per week.

Much like in Colorado, California, and other US cannabis-friendly states, a local regulatory body—the Institute for the Regulation and Control of Marijuana—is responsible for monitoring the potency levels of every cannabis product.

Daniel Fung arrest

Supply Versus Demand

The market may be well regulated, but it has been historically underserved since cannabis was made legal in the South American country known as La Celeste.

Initially, fears were rife that the legalization move would trigger an explosion in cannabis use across the country. By 2021, however, Uruguay had only registered a 5% increase in cannabis use, despite a population growth of 2.7% across the same time period.

While cannabis use had experienced a marginal point increase, supply struggled to keep up across the country.

Licensed cannabis producers failed to meet the market demand in both 2018 and 2019, pushing Uruguayan authorities to bring in more cannabis product from Canada—the Canadian International Marijuana Corporation—and the US—Simbiosys.

In 2019, Uruguay also issued licenses to its own Jabelor and Legira cannabis growers, and US-based Biopharmaceutical Research Company. The move was followed by Canada’s Boreal opening its first Uruguay-based medical hemp processing facility in 2020.

Uruguay Versus Mexico

The world has had its eye on Mexico since the January 2021 move towards potentially legalizing cannabis—but the forward-thinking Senate has a long way to go to catch up with Latin America’s cannabis pioneer: Uruguay.

Uruguay has always been ahead of the game.

Now, with local growers looking beyond the borders and waiting on a Mexican market to open up, opportunities could abound for a country with cannabis growing and production experience to create a booming export economy.

The same opportunity could be on offer in Brazil. Latin America’s largest nation legalized medical marijuana in 2019 but refused to legalize local production—meaning all its marijuana products must be imported.

Uruguay—which already exports its marijuana to Portugal, Israel, and Switzerland—could be looking at a billion-dollar export market over the next decade.

Fotmer Life Sciences, one of 12 Uruguayan firms exporting marijuana in 2021, says the industry has exponential potential for growth. CEO Jordan Lewis estimates that the industry could grow from $7.3 million in cannabis exports in 2020, into a $100-billion industry over the next decade.

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