Uruguay: the cannabis industry is growing by leaps and bounds, and the government wants in on the action

A Spanish company will collaborate with Uruguay's National Institute for Agricultural Research (Inia) to develop cannabis varieties adapted to the country's climate and intended for medicinal use. The project represents an investment of 100,000$ and will provide the government with genetics suitable for future production. The cannabis industry is booming in Uruguay, and the government is obviously keen to capitalize on the situation.

Private-public collaboration

The Spanish company Innova Life and Inia will work together for two years. The vice-president of’Innova Life, Marcelo Cabrera, explains: «Here in Uruguay, in partnership with Inia, we're looking to develop three varieties of industrial hemp for medical applications and uses. We need to acclimatize and establish three varieties (...) that are rich in CBD». Before moving on to the production stage, the Spanish company will have to establish and register the cannabis varieties it will use for its crosses. Then it can begin the breeding and the first production cycles.

According to José Luis Repetto, President of Inia, conclusive results will surely be achieved within two years. «This date will go down in history as the first work that Uruguay, a country that has been at the forefront of cannabis regulation worldwide, is doing, perhaps a little late (...) on one of the most sought-after properties of cannabis, which are its possible benefits for human health», he asserts. The aim of the project is to integrate medical cannabis production into Uruguayan agriculture.

Uruguay is already struggling to keep up with the exploding demand for recreational cannabis: the number of consumers registered to buy cannabis in pharmacies has increased more than sixfold since the start of the year. the start of sales in 2017. In fact, the government will soon be appointing new producers.

Sales of medical cannabis in pharmacies have been authorized at the same time as sales of recreational cannabis, but so far only one product has been licensed, Epifractan. This is a cannabis oil that costs 70$ a bottle and contains only 2% of CBD. The drug has been approved in Switzerland and is produced by a local laboratory from imported cannabis.

Uruguay attracts foreign investment

José Luis Repetto recognizes that the project is of economic interest, speaking of a «distinct and interesting source of income». This political will to attract foreign investment was underlined as long ago as last October, when the Institut de Régulation et de Contrôle du Cannabis (IRCCA) and Uruguay XXI agency - whose mission is to attract foreign investment and ensure the competitiveness of Uruguayan companies -. have signed an agreement to facilitate access to the Uruguayan market for companies wishing to invest in cannabis. These projects cover cultivation, industry and research.

Since legalization in 2013, the government has already authorized 17 companies and five academic bodies to develop activities in the cannabis sector, whether for industrial hemp or psychoactive cannabis, for industrial, cosmetic or medical applications. For Juan Andrés Roballo, Secretary to the President of the Republic, «the regulatory law has also generated a great opportunity for the development of a broad agro-industrial complex that links innovation and research». Indeed, Uruguay is currently experiencing an explosion of cannabis-related investments and projects.

In addition to the projects already accepted, some twenty others are in development or in the process of being accepted. They represent a total of over $70 million in investments. Most involve CBD for medicinal use. A chamber of medical cannabis companies (cecam) has even been created. last October by 14 companies. It now counts 60% from companies in the sector. The invitation to the inauguration reads: «Uruguay faces a historic opportunity: the development of a sector focused on health and quality of life, with strong potential for investment, job creation, exports and scientific research».