Cannabis in Uruguay: a potential market
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Cannabis continues to be relevant to highlight a potential market in terms of investment, income, and diversification of the Uruguayan economy
In 2013, Uruguay became the first country in the world to establish a legal and regulated cannabis market within its own State through the approval of Law No. 19.172. Likewise, the use of medical and recreational marijuana was also legalized for 2017, which caused the demand to overflow the supply due to the great reception that this measure had in the country.
Leer en español: Cannabis en Uruguay: un mercado potencial
According to El País, nine months after the legalization, the number of registered for the sale of marijuana in pharmacies tripled, which generated a shortage in the product and a challenge in terms of logistics for production, sale and marketing of cannabis Because of this, pharmacies have had to resort to alternative strategies in order to meet the demand of consumers.
At the Camaño pharmacy in Montevideo, for example, a distribution system was implemented that delivers cannabis at its points of sale twice a day, at nine in the morning and at four in the afternoon. However, despite the implementation of this strategy, the daily queues for the purchase cover up to four blocks and the quantity of available product is exhausted at the end of each day.
By 2018, one in every hundred Uruguayans already belonged to the legal consumption register, surpassing the 35,000 people authorized for the distribution of cannabis. However, this figure represents a sample of the 147,000 people the government estimates would consume marijuana in the country.
There are not enough producers
An explanation of the shortage of the product could be given that there are only 17 companies authorized for production and distribution, according to the reports delivered by the Uruguayan Investment and Exports Agency. In addition, according to official data, the growers would reach 6,000, which, although they have quadrupled their number from the first day of sale, would not be enough to cover the needs of the market.
The cannabis market has represented a new way of diversifying the Uruguayan economy. Although the authorized companies are small, investment in the market has reached USD $100 million, according to figures from the Medical Union of Uruguay. This implies that Uruguay's avant-garde attitude has culminated in a potential market, which, if it continues to receive investments and efficient quality control, will be able to create a strong industry, with the added value of science and research in the field.
To satisfy the current demand, the initiative was taken to create the Chamber of Medical Cannabis Companies (Cecam), which covers the new enterprises that would be in the process of certification of distribution and supports them towards the implementation of good practices in immersion. of the new market. In addition, by the beginning of 2019, 5 additional companies were invited and would be in the bidding process by the Uruguayan government to cover the required production.
Juan Andrés Roballo, Prosecretary of the Presidency of Uruguay, explains in a press conference in Montevideo that the Uruguayan government has taken these measures because the legal sale of cannabis does not cover the demand, and also adds that "since the legalization of the sale of recreational cannabis in pharmacies, a year and a half ago, the State has snatched at least 10 million dollars from drug trafficking".
Although the process of production, regulation and distribution of cannabis has occurred gradually in Uruguay, causing the scarcity of the product, the market continues to grow and strengthen. By the end of last year, more than 4,000 jobs related to the production of cannabis had already been generated , which would be expected to increase due to the immersion of the new distribution companies in the market.
Also read: Would you drink a Coca-Cola with cannabis?
In the same way, the government interest has been a key point to continue strengthening the industry through the support of the bids, research and quality control by the authorities.
On the other hand, countries like Canada have generated an approach since late 2018 to the Uruguayan government. This, with the purpose of creating bilateral relations that would help establish a joint market strategy for the legalization of the production and distribution of recreational and medicinal cannabis in both countries.
According to Monitor Cannabis, an agency dedicated to the collection and measurement of the implementation of the project, it would be a priority to expand coverage in the system, since it is a market that could exceed USD $85 million per year. In addition, the importance of market expansion for the total elimination of illegal markets, the insertion of new investments and immersion in scientific research related to the benefits of cannabis is also mentioned.
LatinAmerican Post | Alejandra Caballero
Translated from "Cannabis en uruguay: un mercado potencial"