High prospects for Uruguay's legal marijuana business

Fri Dec 13, 2013 1:22pm EST
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By Malena Castaldi and Felipe Llambias

MONTEVIDEO (Reuters) - Uruguay's pioneering move to legalize the planting and sale of marijuana opens the door for a clandestine cottage industry of pot growers to transform into a legitimate business that could even export medical cannabis, a commodity in short supply.

More and more countries are setting up medical marijuana programs to help relieve the pain of terminally-ill patients and treat other health conditions, but there are few legal sources of the drug in the world and Uruguay could tap that tight market.

Uruguay's domestic marijuana output is expected to expand rapidly under a law that cleared Congress on Tuesday allowing its citizens to grow up to six plants a year in their homes and more in smoking collectives.

Many have been doing this secretly for years. Smoking marijuana - and indeed the private consumption of all drugs - has not been a crime in Uruguay since 1974, but the small South American nation of 3.3 million people is now the world's first to fully regulate marijuana from cultivation to consumption.

When the law is implemented in 120 days, Uruguayan residents will be able to buy 40 grams (1.4 ounces) a month over the counter at pharmacies licensed by the state, which will fix the price, tax the trade and issue permits for larger producers.

"The big difference is that we are no longer outlaws," said Alvaro Calistro, who has grown pot in his Montevideo backyard for 20 years. "This allows us to increase the scale of cultivation."

Calistro expects a rise of licensed entrepreneurs growing marijuana on small farms outside the city, though who will get permits to grow the drug for sale in pharmacies has yet to be specified in regulations the government is to draw up by April.

Licensed medical marijuana for export would have to be grown in greenhouses to pharmaceutical and security standards required by the health authorities of importing nations.   Continued...

Marijuana activist and indoor grower Juan Vaz, head of the Uruguayan Cannabis Studies Association, poses in his indoor garden in Montevideo, in this December 6, 2013 file photo. REUTERS/Andres Stapff/Files