Sept. 14 (Bloomberg) -- For decades, Uruguay has been best known for the tranquil beaches of Punta del Este and picturesque Colonia, a 17th century town on the Rio de la Plata. One of South America’s smallest nations, it may soon have another claim to relative fame as home to the world’s first government-run marijuana market.
Leaders in Mexico, Colombia, and other Latin American nations wracked by cartel violence are calling for a new approach in the U.S.-led war on drugs. Uruguay President Jose Mujica’s solution is to not just legalize pot but turn the state into the sole supplier, replacing dealers who often engage in turf wars as they move $30 million to $40 million of the drug illegally each year, according to Uruguayan government estimates.
Despite a divided public, the proposal has a strong chance of passage in Uruguay’s legislature, which the president’s party controls, Bloomberg Businessweek reports in its Sept. 17 issue. State involvement would “spoil the market” for pot dealers, “because we will sell it a lot cheaper than what they’re selling it for on the black market,” Mujica, 77, told CNN last month.
Marijuana possession for personal use has already been decriminalized in Uruguay, although distribution remains illegal. Under Mujica’s proposal, Uruguayans older than 18 would be able to register for a monthly pot ration of up to 30 grams (1.06 ounces), though sales to foreigners would remain prohibited.
Switzerland of South America
Sales would be taxed, with proceeds funding treatment for addicts of harder drugs. The government estimates there are about 150,000 marijuana users in Uruguay and that it, or a private contractor, would have to plant 150 to 200 hectares (370 to 490 acres) to meet demand.
The so-called Switzerland of South America, Uruguay, an offshore banking haven for investors from neighboring countries, is already in the pleasure business.
Along with the oil and landline phone industries, the government operates a whiskey distillery. It’s also more socially liberal than its larger neighbors. Mujica, once a Castro-inspired guerrilla revolutionary, was elected to a five-year term in 2009.
He commutes in a beat-up Volkswagen Beetle from the presidential palace in Montevideo, home to about half the nation’s 3.4 million residents, to a modest flower farm on the outskirts of town where he lives, tends roses and vegetables, and plays with his three-legged dog, Manuela.
No ‘Sure Thing’
Mujica began campaigning for the law in July, when crime was spiking, but he has yet to see results. In a recent survey by private pollster Cifra, 66 percent of respondents opposed legalizing pot sales.
The president has said he will bow to public opinion, but Secretary of the Presidency Alberto Breccia said in July that a new survey must be conducted once the full legislative language of the proposal is finalized and publicly available. “If I had to bet money, I’d say some version of this will pass, but it’s not a sure thing,” says Adam Isacson, an analyst at the Washington Office on Latin America, a human rights and social justice advocacy group.
Among the converts is Nicolas Cotugno, the archbishop of Montevideo, who said last year that he would support a move to get the cartels out of the pot business, if that would curb drug use.
“Holland already did it in the 1970s and in 40 years has managed to separate consumers of marijuana from those of other drugs, which are very different,” says sociologist Agustin Lapetina, who has studied the issue for 15 years at the social development nonprofit El Abrojo. The Netherlands, incidentally, is rethinking its marijuana policy, which became an issue in its elections this year.
The smell of burning weed wafts through the air in Montevideo on a Sunday stroll along the coast of the Rio de la Plata, and seeps through the stands at the Centenario soccer stadium.
In July, a group of connoisseur-activists held the country’s first-ever “Cannabis Cup” to determine who, among more than 70 entrants, grows Uruguay’s best buds.
Some users say it makes sense to establish the government as a stakeholder in the weed market.
“The system becomes more coherent, because it’s illogical not to punish me for smoking but to punish me for selling or cultivating marijuana,” says Eduardo Gonzalez, who manages a mini-mall in downtown Montevideo, while smoking a joint on his break.
“It seems risky to create a tourist destination for marijuana, but if the state has a record and controls it, I don’t think there would be problems,” he said.
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