The Marijuana Market in Uruguay Runs Into Supply Problem

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The legal cannabis market around the world has seen a large boom over the course of the past five years. One of the earlier international markets to come into the space was Uruguay, legalizing the use of cannabis as of five years ago in 2013. The law in Uruguay states that consumers can buy up to 1.5 ounces of the substances or 40 grams, but purchasing cannabis domestically has become a challenge in itself.

Laura Andrade, an Uruguay resident stated that in recent visits to dispensaries around her area, the majority of them have been out of a product. The issue here stems from the fact that individuals have been resorting to the black market to find ways to buy cannabis. Andrade states further that, “I work, I can’t come here every day. Today I’ll have to buy from an illegal dealer. I have no choice.”

The legal status of cannabis throughout Uruguay means that only licensed individuals can grow the substance, and these growers can also open “clubs” where they can share their product with the public. The government, however, is in charge of all cannabis that is grown for sale in pharmaceutical and more medical settings. Diego Olivera, the head of the Uruguay National Drugs Council stated that he is very aware of the current supply issue. He stated further that “the demand is greater than our productive capacity. We have to address that challenge.”

The two licensed producers of cannabis in the country currently can produce as much as 4 tons of the substance for sale throughout the nation’s pharmacies. This high capacity has only been a recent addition, however, and the producers look to continue upping their production in the near future. He continued to state that “there was no experience with farming on a large scale and it took a while to finally nail the technology, workforce, and the drying process.”

Those who have the legal ability to produce cannabis could potentially grow as much as nine tons of weed per year, but this does not nearly meet the high demand in the nation. The demand for Uruguay currently stands at around 25 tons of the substance per year, but this could be met potentially in the coming year as the government works to cement more suppliers.

An agronomy engineer and minority investor, Eduardo Blasina has been helping to work on the issue of cultivation throughout Uruguay and cites the inexperience of growers in the nation as one of the main reasons they are not able to reach full potential in terms of growth. He stated that “it’s a complex crop, and the investors behind these companies didn’t come from a culture of cannabis,” he said. “You’d tell them: You need to buy 50 fans, something that’s very necessary in some instances, and they’d look at you as if you were an alien.”

The effort for legalization in Uruguay has mostly been for the purpose of reducing the prevalence of the large black market in addition to the violence that comes with it. Shockingly, gang killings were responsible for more than half of the homicides during the first quarter of this year, thus the effort to try and curb this.

The black market has been an especially large motivator for countries and states to legalize cannabis, but the effort is still largely underway. The hopes are high that issues like this in such a new market can begin to be solved by those who know how to cultivate cannabis properly and on a large scale for the future of the industry.

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