Tiny Uruguay barely matches North Dakota in GDP, but with a few tweaks it could be the blueprint for the roll out of cannabis legalization in other nations.
A new policy paper released by the Brookings Institution shines the spotlight on the South American nation for a clearer look at the lessons that can be learned from the world’s first country to legalize and implement adult-use cannabis sales.
The country with a population of 3 million legalized cannabis in 2013 — starting sales in July 2017 — to head off a fervent black market flush with “brick weed,” or pressed cannabis, from Paraguay. The law hasn’t won many popularity contests, but it has survived two presidential administrations, researchers said.
“It’s always hard to go first, but it’s not as hard to go second and third,” said John Hudak, deputy director of the Center for Effective Public Management for the Brookings Institution, a Washington, D.C.-based research organization.
Hudak partnered with researchers from the Washington Office on Latin America to explore how Uruguay’s cannabis laws came to be, what’s played out since, and what changes could be made to ensure their effectiveness.
“There’s been a real commitment to the rule of law and to the continuation of policy that I think is quite impressive in Uruguay,” Hudak said.
Uruguay’s law was “bold and cautious” so as to accomplish the goal of combating drug trafficking while staying attuned to concerns that could arise from the international community, he said.
Skepticism about the state runs deep in many Latin American countries because of their histories with dictatorships and atrocities committed against society, he said.
“And government lists are something that scare Latin Americans … there is a real lasting memory of that sort of behavior across the continent,” he said. “I think there was some real concern early on about this system, but there has been quite a bit of uptake since.”
At the 30,000-foot level Uruguay’s law bears similarities to cannabis laws seen in U.S. states like Colorado and California. There are home-grow and commercial regulations, seed-to-sale tracking systems, initial supply shortages and banking difficulties.
The market also presents pronounced differences.
Uruguay doesn’t have medical cannabis, which is often the precursor to U.S. adult-use laws; it has only two authorized cultivators; the federal government sets price and purchase restrictions; and sales are limited to citizens. Additionally, the law has exclusivity provisions under which a citizen must choose the one of three ways to procure cannabis: growing it themselves, joining a cannabis club or purchasing it at a pharmacy.
Following months of research and an October 2017 trip to Uruguay, Hudak and fellow authors WOLA’s Geoff Ramsey and John Walsh saw areas of potential improvement in the nation’s laws.
The authors’ seven recommendations include:
- Access to banking: Develop solutions to allow access to financial institutions. That could be an internal fix of having local banks “play a game of chicken with U.S. financial regulators” or the creation of a partnership with bankers in Canada, which is expected to legalize adult-use sales this year.
- Increase education: Reduce education gaps in medical and law enforcement communities. Develop classes for medical professionals and fund research into the potential medicinal efficacy of cannabis. Hold department-level trainings for law enforcement officers to prevent unlawful seizures of products.
- Expand medical cannabis: Create a system for medical-specific uses of cannabis. The country has an infrastructure in place for this addition as Uruguay produces medical cannabis as exports to other countries.
- Reconsider the exclusivity of distribution: Address issues such as supply shortages and illegal sales by devising a system that allows people to access the product legally via more than one specific means.
- Create a dispensary model with viable revenue system: The price of cannabis is currently fixed at about U.S. $1.40 per gram. To increase revenue and the viability of the system, the government could consider subsidizing cannabis operations, either as private entities or government-run institutions.
- Legal sales to tourists: The government could consider implementing a pilot program by which tourists could legally purchase cannabis — perhaps at a higher cost.
- Readiness to correct future implementation problems: Increase the staffing and funding for the Institute for the Regulation and Control of Cannabis, the regulatory body that oversees the laws. In addition to reliance on in-house officials providing evaluations of the system, IRCCA should rely on independent, academic analysis about the positive and negative aspects of the law.