Uruguay: Uruguay – A Cannabis Paradise?

Last Updated: 13 December 2017
Article by Mark Teuten

Uruguay, famous for its legal battle with Phillip Morris, is expected to continue raising it's already strict tobacco restrictions, yet is moving the other way on cannabis.

Cannabis production and consumption in Uruguay is legal, although in a highly regulated form and one that is very sui generis.

Law No 19.172 was approved in 2013 and regulated by Decree No 372 in December 2014. But it was only in June 2017 that it's most visible provisions came into force.

In 2013, when the law was passed, public opinion was 66/24% against legalization. But, the government went ahead anyway.

Polls show the majority of Uruguayans are still against it, but there has been no public scandal and it will be interesting to see if the government can lead in forming public opinion in this area as it did with its tobacco restrictions.

Likewise, Uruguay's plans have been subject to much international interest. We are something of an experiment: if successful it could conceivably be copied in many other countries and if unsuccessful it could also lead to legalization plans being abandoned. 

What kinds of production and consumption are allowed?

The law creates different regimes for different groups of users:

  • Grow your own. Private individuals are allowed a maximum of 6 plants per household, with a maximum production of 480 grams per year and prior registration with the Instituto de Regulación y Control del Cannabis (IRCCA) part of the Public Health Ministry.
  • Growers Clubs. Interested individuals are allowed to form clubs for the specific purpose of growing cannabis and distributing it amongst the members subject to the following restrictions:
  1. The club must have a minimum of 15 and a maximum of 50 members.
  2. All members must be Uruguayan citizens or legal residents
  3. One of the members must act as the responsible person who controls the production and distribution to each member.
  4. Each member is entitled to a maximum of 480g per year.
  5. The club can have a maximum of 99 plants.
  • Buying in registered pharmacies.

This is where the law gets interesting! The government wants to make consumption legal, but also wants to take production away from the drug mafias. So, the government put production out to tender. Five companies have been selected to produce the cannabis at secret locations around the country.

These companies in turn are obliged to sell all their production to the government at a pre-established price. In this way the government hopes to also ensure the quality of the product being sold.

This part of the law has proved to be the most difficult to implement (in addition to being the most controversial). It has taken 4 years to get from approval of the law to the first sales in July 2017.

The sales process is as follows:

  1. The government sells the cannabis to final consumers through a pre-selected list of pharmacies. At the present time, only 15 pharmacies in the whole country registered to sell, mainly because the majority of pharmacies were simply not prepared to take on the sale of the product for a variety of reasons.
  2. The pharmacies sell only to pre-registered individuals, who must be Uruguayan citizens or legal residents. This means that each person has given all his personal data (including finger prints) to the government, although supposedly the database is confidential.

The fact that you must be a citizen or resident in Uruguay means, in theory, Uruguay will not be a market for cannabis tourism.

  1. The maximum amount which each person can buy per month is 40g.

What problems have there been?

On the buyer's side:

  1. Many concerns were raised about whether people would be prepared to give up their personal details to go on the register. Perhaps they would prefer to continue to buy illegally. But to date this does not seem to be an issue. So far more than 17.000 people have registered.
  2. Lack of supply. There has been so much interest that the government has simply not been able to meet demand, so registered pharmacies have often been unable to sell, and queues have formed outside pharmacies when people know they have product to sell.
  3. Product Quality. At first there were complaints that the level of 2% THC was insufficient. The government has now increased this to 9% THC and buyers seem to be happy.

On the seller's side:

  1. For those pharmacies which decided to participate there has been only one significant problem: banking. The problem the government did not foresee was the US Patriot Act, which makes it illegal for any US bank to have any contact with a foreign bank which could be dealing with money from drug transactions. It is hard to believe that the government did not foresee this difficulty before, but it would seem to be the case as this only came to light when private banks started to warn their pharmacy customers that they would have to close their accounts if they continued to sell cannabis.

The public banks took the same stance, when they were informed of the position.

A definitive solution to this problem is yet to come. But at the present time, the pharmacies seem to have found a way to continue selling.

What other restrictions are there?

  • Employment – No smoking is allowed in the workplace and one is not allowed to turn up to work whilst under the influence – which is taken as meaning a 0% level of THC. The public authorities can make unannounced inspections of workplaces at any time to control compliance.
  • Driving – Likewise one cannot drive whilst under the influence – which is 0% level of THC. This is similar to the 0% level of alcohol allowed for driving.
  • No publicity is allowed either directly or indirectly in any medium.
  • Grow shops are allowed and in fact there are numerous ones springing up throughout the country. They are though subject to the above restrictions on publicity.

What medicinal use is allowed?

  • This is an area which has not yet been regulated, either for private users to get a doctor's prescription for it or for businesses wanting to export market it. Many businesses have expressed interest in this market.

Conclusion:

So far, the law seems to have been a success, apart from the banking issue. The streets are not full of dope addicts, either Uruguayan or foreign and there has been no increase in crime. It is still early days and it will be interesting to see if sales of "illegal" cannabis drop and also whether sales of other drugs go up or down.  Time will show if the argument about cannabis being a starter drug for other more noxious drugs is correct or not.

If it continues to be a success, then hopefully the government will move quickly to regulate the medical use side, with its interesting business opportunities.

 DR. MARK TEUTEN

mail@teutenaboagdos.com

© 2017 TEUTEN ABOGADOS

Note: This article is for information purposes only and should not be relied upon as legal advice. Please consult with a lawyer as to your particular circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions