Commentary: Uruguay’s Legalization of Cannabis by Michael McKinney

lab PhotoOn December 23, 2013 the South American country of Uruguay made global history as the first country to fully legalize recreational Cannabis (Romo, 2014). The move was meant to be an attack on the illegal drug trade through legalization and regulation. Although legalization of Cannabis in Uruguay will be occurring roughly around the same time as in states such as Colorado and Washington in the United States, their implementation of the movement is vastly different.

Starting in 2015 Uruguayans, 18 and older, will be permitted to grow up to six plants in their homes legally, after being registered, and can harvest up to 480 grams a month. Licensed buyers will be able to buy up to 40 grams per month (Uruguay Delays, 2014). Plants grown by the government in Uruguay will possess genetic markers to track the pot sales. This, coupled with the registration of every non-government owned plant, as well as radio frequency tags also placed in each of the government owned plants, would make it easy to trace marijuana and to see whether it was grown from a legally approved plant. Uruguay’s government is handling the entire sale process from the seed (or in this case, the clone) to the sale in order to run drug traffickers out of business, but their process has yet to be implemented entirely.

However, while Uruguay’s system may seem watertight, there are some issues they may fail to address. The Cannabis strains the government will grow are strictly a cloned population. This means that the crop would eventually become vulnerable to disease due to the lack of genetic diversity. Similarly, by growing only specific clones the number of strains the government can produce will be limited.

Yet, the most questionable aspects are the genetic markers within the cloned plants. Genetic markers would allow for identification of black market Cannabis, something Uruguay wants to eliminate entirely. While genetic markers already exist in Uruguay’s beef industry, those genes do not spread, as cattle can be contained (G, Yessica, 2014). Cannabis on the other hand is a wind-pollinated plant that can also pollinate through other vectors such as people’s clothes. This means that the genetic information specific to government plants could escape into other grows, incorrectly marking them as government plants. Cannabis plants can be male or female, but occasionally if the plants are under stress and lack males, as is the case in large grow operations, females can produce pollen as hermaphrodites and spread genetic material that way. This final complication means that Uruguay’s growing system will not be able to contain the genetic markers that signal official plants.

Cannabis will be tax-free in Uruguay, and very cheap. This is to ensure that the prices are low enough to undercut illegal sales. This underscores the heart of this Cannabis legalization movement: to stop drug trafficking and the crime it brings. However, this means that Uruguay’s potential revenue from marijuana sales is very low, and they may even be selling it at a loss (ICBC, 2014). This is in stark contrast to Colorado; taxes from the plant are some of the movement’s biggest supporters. In Colorado there is a 10% marijuana tax on top of the base 2.9% sales tax (Colorado Department of Revenue, 2014). This brings pricing to roughly $15.00 – $20.00 per gram where Uruguay will only charge $0.85 – $2.00 per gram (Romo, 2014). Clearly, the reduction of drug sales, and drug use are the main concern, not potential profit.

While Uruguay may be selling their Cannabis at a loss initially, it appears as though they are left without a choice, as black market sales are so cheap. Colorado and Washington in the Unites States have more freedoms with their sales and can produce a profit due to black market prices being high. Colorado, as of the end of May 2014 has made over 104 million dollars in tax revenue from 2014 sales alone (Office of Research and Analysis, 2014). From an American perspective, launching such an ambitious legalization campaign, as Uruguay’s, without visible profits seems unwise, as it is possible to turn a profit. This profit is especially visible in the form of tourism. Pot based tourism exists, and has helped fuel Colorado’s legalization. Uruguay will not be allowing tourists to purchase or consume Cannabis which draws attention to their disinterest in the economic side of the legalization movement, Marijuana born tourism represents a large, and untapped industry that could make Uruguay’s movement very profitable based on Colorado’s experience, yet it will not be allowed.

The move by Uruguay has had few effects internationally so far. While they have roused some complaints from the International Narcotics Control Board, most of the world, including the United States is watching and waiting to see the outcomes of this new marijuana policy. The most notable international effect is what the movement signifies. The change is an open admission by Uruguay that the war on drugs has failed, and a new approach is needed (Eddington, 2013).

However, none of Uruguay’s systems have yet to be implemented. Sales have been postponed until 2015, but whether this date is firm or not is still to be seen (Uruguay delays, 2014). As for the legalization itself, the world will see how well Uruguay’s system will work. In any case, Uruguay is making international history, and setting itself up as a trailblazer in the world of legal marijuana.

References:
Colorado Department of Revenue. Marijuana Taxes, Sales and Excise. 2014. 

Eddington, John. “Uruguay’s legalization of marijuana will provide international lessons” Global Times, 2014.

G, Yessica. “Uruguay Tracks Marijuana Export Genetically.” THC Geek. 2014.

ICBC. “Uruguay to sell Recreational Cannabis Tax Free.”International Cannabis Business Conference. 2014.

Office of Research and Analysis, Colorado.  Marijuana Taxes, Licenses, and Fees Transfers and Distributions. Colorado Department of Revenue. 2014.

Uruguay delays legalized sale of marijuana until 2015. RT News. 2014.

Romo, Rafael. New rules in Uruguay create a legal marijuana market. CNN. 2014.