Uruguay recently became the first country to completely legalize cannabis, and has big plans to create a recreational marijuana industry. This has lead to numerous other countries considering following suit. I think after other countries see how well it works, it will speed up the process of reform around the world. Hopefully the United States gets on that bandwagon sooner than later at the federal level.
A lot of people in the media and in the international community were shocked to see Uruguay make such a bold move. But I think the most shock came from the United States cannabis industry when it became known that Uruguay would be selling cannabis at such a low price – less than one dollar per gram. That price is considerably lower than prices in stores in Colorado.
It appears that Uruguay will be making another bold move with their cannabis policy – selling legal recreational cannabis tax free. Per Reuters:
Uruguay will exempt marijuana production and sales from taxes in a bid to ensure prices remain low enough to undercut competition from black market pot smuggled in from Paraguay, according to consultants advising the government on a legalization plan.
“The principal objective is not tax collection. Everything has to be geared toward undercutting the black market,” said Felix Abadi, a contractor who is developing Uruguay’s marijuana tax structure. “So we have to make sure the price is low.”
Uruguay will auction up to six licenses to produce cannabis legally in the next weeks. The government is also considering growing marijuana on a plot of land controlled by the military to avoid illegal trafficking of the crop.
One of the biggest selling points in the United States to reform cannabis laws and allow the industry to operate is that it will generate a significant amount of tax revenue. It seems that Uruguay is not as concerned with generating tax revenue. I think legalization combined with extremely low prices will catapult Uruguay to the status of ‘most cannabis friendly destination’ once sales start rolling out. How Uruguay will deal with an influx of foreign travelers is yet to be seen, but I think added tourism is ‘problem’ every nation would love to have.
Laura Blanco, President of Uruguay’s Cannabis Studies Association will be on hand at our conference in September to give attendees a first-hand account from the country making international waves by regulating cannabis sales. Join us in Portland, Oregon, as we bring together entrepreneurs, activists and professionals from across the globe to provide an international cannabis conference like no other.