Uruguay Awards Two Marijuana Permits to Investors

Updated on
  • Simbiosys, Iccorp win licenses to grow 2 tons a year of pot
  • Government will set retail price at just over $1 a gram

Uruguay has selected two companies backed by local and foreign investors to grow recreational pot for distribution in the South American country’s pharmacies.

Simbiosys SA and Iccorp were among a short list of 11 companies including Canadian medical marijuana producer Tilray that bid for licenses to grow as much as two tons of pot a year.

Simbiosys, whose investors are Uruguayans and Argentines, could invest as much as $2 million in its operations, Gaston Rodriguez, a company partner, said in a telephone interview Friday.

"It’s a historic change in a country that is very conservative in some aspects," said Rodriguez, a 43-year-old industrial design professor. "Uruguay has taken up the challenge of proposing a different way to fight drug trafficking."

The first offering of pot could hit pharmacy shelves in about eight months, Juan Andres Roballo, chairman of the National Drugs Board, said at a news conference Thursday.

Uruguay is among a group of Latin American and Caribbean nations that has moved to legalize marijuana as an alternative to the U.S.-led war on drugs. Jamaica approved a law earlier this year that decriminalized small amounts of pot and regulates medical marijuana, while Chile has approved the planting of marijuana for medicinal purposes. Marijuana is also now legal in some form in at least 23 U.S. states.

First Country

Uruguay became the first country to regulate marijuana for recreational, medicinal and industrial uses when its controversial cannabis law took effect in December 2013. Former President Jose Mujica, whose ruling party also legalized gay marriage and abortion during his term, pitched the law to his skeptical countrymen as a way to fight drug gangs.

Under local regulations, adults who register with a government database can legally obtain as much as 480 grams of pot a year in three ways: home growing, joining a cannabis club, and soon at pharmacies.

About 9.3 percent of Uruguayans, or 161,000 people, use pot at least once a year, according to a 2014 government drugs report.

“If Uruguay can remove the profit motive from the sale of cannabis and prevent the glorification of it through modern marketing techniques, it may have an overall beneficial effect in that the prevalence of use may not increase and could possibly decrease,” Thomas Babor, a drugs researcher at the University of Connecticut school of medicine, said in a telephone interview.

No Branding Please

U.S. marijuana dispensaries in Colorado advertise exotic sounding products such as Purple Haze and Kush that are fast becoming international brands. No such luck in Uruguay, where the law bans the branding and advertising of pot.

Registered users will be able to buy as much as 40 grams of pot a month, enough for about 60 joints, for a regulated price of just over $1 a gram at participating pharmacies, Augusto Vitale, chairman of marijuana regulator IRCCA, said yesterday.

Tourists looking for a cheap and legal high are out of luck as only Uruguayan citizens and residents 18 or older will be able to buy pot at pharmacies.