Uruguay first country to fully legalize Marijuana

Uruguay Becomes First Nation to Oversee Pot Sales, From Seed to Smoke

7/19/17, 11:20 AM
MONTEVIDEO, Uruguay -- Tiny Uruguay embarked on an ambitious social experiment Wednesday by becoming the first country to regulate and oversee the sale of marijuana, a policy that has enthralled pro-pot activists and smokers abroad but has lukewarm support at home.

The strategy comes as the South American country's neighbors, Argentina and Brazil, step up their fight against drug trafficking from Bolivia and Paraguay.

Some leaders in Latin America, which is on the front lines of the U.S.-backed war on drugs, have increasingly voiced fatigue with policies that rely on hard-line drug interdiction policies.

But so far, Uruguay has most decidedly broken with prohibitionist policies that for decades have defined how governments dealt with illegal drugs. World leaders and activists on both sides of the drug-legalization debate are closely watching Uruguay's experiment.

The move has also encouraged businesses, like Vancouver-based International Cannabis Corp., which has a license to operate in Uruguay, as a business opportunity.

"We are ready to start exporting to more than 12 countries, and we will do it with a seal of quality from the Uruguayan Health Ministry," said Alejandro Antalich, chief executive of the company, known as ICC. Some U.S. states, Canada and other countries have legalized marijuana for medicinal purposes.

But under an unlikely proponent of pot, Uruguayan President Tabaré Vázquez, an oncologist and antitobacco crusader, Uruguay is taking it a big step further: controlling the production, distribution and commercialization of recreational marijuana.

Pot connoisseurs who went to 16 pharmacies across the capital Wednesday, the only establishments licensed to sell, said they were pleased to make legal purchases.

"The advantage of buying marijuana here is that you know what you're smoking," said Matias Horton, 27, who waited 40 minutes before buying his first legal packet of pot. "Before, you had to buy this on the street and you had no idea what kind of ingredients you were smoking."

Uruguay moved to legalize marijuana in 2013 under then President José "Pepe" Mujica, who argued that the U.S.- led war on drugs had failed. His approach gave the state a monopoly on the market by offering prices so low it would undercut street vendors.

That plan, though, has never had strong support here, even though Uruguay has long been socially liberal, legalizing abortion, recognizing gay civil unions and adoption by same-sex couples. Indeed, 62% of Uruguayans oppose legalization, while only 29% support it, according to an Equipos poll published this week.

"If people want to smoke pot, fine," said Sara Casalla, 88. But she said pharmacies shouldn't be selling it. "They should be selling health care products. I don't like this."

Pharmacists, to be sure, have been the most unnerved, saying selling pot could put them in competition with illegal pot dealers or that smokers might try to steal their pot stash.

"You have to worry about street vendors, like those we have here around the corner," said Javier Ponce, 61, who works at Farmacia Yaro. "We're in here all day, exposed, and turning them into competitors isn't necessarily a good idea.

Martín Alvarez, head of San Roque, one of Uruguay's biggest pharmacy chains, noted that the government-set price of $1.30 per gram barely covers operating costs. "There is nothing profitable about any of this," he said.

The government, to be sure, is doing everything to keep this country of 3.4 million from becoming a pot mecca -- and making it tough for these companies to make much money from this tiny market. Only Uruguayan citizens or permanent residents can buy. And those who buy have to register their names in a national database and scan their fingerprint. Sales are capped at 10 grams a week per person.

The regulations, plus concerns about registering with the state, have meant that fewer than 5,000 of Uruguay's estimated 160,000 cannabis consumers had signed up to buy pot.

Those who see greater possibility, though, are ICC, the Canadian company, and a second firm, Simbiosys, a homegrown pot producer. They are entrusted with producing up to four tons of marijuana annually for consumers here. ICC, though, is growing far more for export.

The global medicinal market will grow to almost $56 billion by 2025, according to Grand View Research. ICC, which has a 16,000-foot facility to extract medicinal oil from hemp flowers, plans to produce 160 tons annually for medicinal purposes, practically all for export.

While ICC is producing now for the pot users here, Mr. Antalich, ICC's chief executive, said, "our longer-term aim was to enter what we see as the medical market of the future, which is medicinal marijuana."

(END) Dow Jones Newswires
07-19-17 1320ET
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