Since it became the first country to legalize recreational marijuana in 2013, one astounding feature of Uruguay’s new legal regime has caught the attention of cannabis enthusiasts around the world—its price.
As one of South America’s most progressive countries, Uruguay has made a lot of headway in the liberal policy department under its former President José Alberto Mujica who gained international fame for being the most humble president in the world. He had forgone the pomp and frills of presidential life to live in a modest cottage outside the capital with a beat-up old Volkswagen Beetle and a three-legged dog. In his time in office, he brought about several reforms which won him the praise of the international community. Not least among them was the legalization of recreational marijuana.
As part of that new legal system, the Uruguayan government was given the right to regulate prices – as it does with many other industries like banking and healthcare.
The price Uruguay chose for its newly legal plant is the jaw-dropping equivalent of $1.30 per gram. 90 cents of each $1.30 gram goes to the two businesses chosen to cultivate marijuana. The rest is split between the pharmacies and the government, which will use its share to fund prevention programs. The marijuana comes in packages emblazoned with a seal of authenticity and warnings about the drug’s effects.
That low price has less to do with moving product than it does with combatting the black market where the average cost of a gram is $3 —a price that still might send Americans scrambling to book a flight to Montevideo. For Uruguayans with a median annual income of just over USD $2,000 that price drops about as many jaws as a $10 gram in Canada. But before you start booking your next vacation, it should be noted that only citizens of Uruguay can purchase cannabis, and that’s no accident.
When the country first legalized in 2013, the government came up against some serious opposition. Among their main concerns was that the country’s international reputation would be tarnished or that they might become the Latin America’s Amsterdam. In addition to these concerns Uruguay’s neighbors, who have a long and storied history with cartels, were also taken into consideration.
As a result, the country’s citizens are the only ones allowed to purchase marijuana legally, and even that can only be done in a pharmacy or by joining a licensed cannabis club. Consumers at the receive an identification number which records each purchase and only allows for 40 grams a month per person.
Those who register to grow at home are granted a permit and are only allowed a maximum of six plants, while those who want to form a club must meet a 45 member requirement and are allowed up to 99 plants. Authorities say nearly 5,000 people have registered as consumers allowing them to buy up to 40 grams per month using fingerprint recognition. About two-thirds of them live in Montevideo.
According to the most recent data from the country’s Institute for the Regulation and Control of Cannabis 13,555 have registered for personal consumption, 7,106 are self-cultivators, and 64 clubs have now been opened.
These extreme measures have been implemented to ensure that consumption is not encouraged while also attempting to eliminate the black market.
Other countries that have expressed a willingness to legalize have taken similar measures. Among them is Canada where a 2016 report from the Canadian Government’s Task Force on Cannabis Legalization and Regulation suggested that “Taxes should be high enough to limit the growth of consumption, but low enough to compete effectively with the illicit market.”
Whether these precautions can co-exist remains to be seen. After all, as law enforcement has figured out over 50 years of prohibition, it’s difficult to regulate something that sprouts from the ground.