Uruguay to authorize up to five new cannabis producers in early 2019

Uruguay was the first country in the world to legalize recreational cannabis in 2013. Since then, Canada and the Northern Mariana Islands have done the same, and other countries are about to do so, such as Mexico and Luxembourg. Uruguayan cannabis users can purchase it from pharmacies authorized to sell the product, from cooperatives, or by growing their own plants.

Uruguay currently has only two licensed producers authorized to supply pharmacies and Supply is struggling to keep up with demand. To address the frequent shortages, the Institute for the Regulation and Control of Cannabis (IRCCA) announced that it would issue a call for applications on February 11 to grant licenses to up to five new producers

Production is too low

Whether consumers purchase cannabis at a pharmacy, from a cooperative, or by growing it themselves, they have the requirement to register with the relevant authorities. Since 2017, Date when sales became legal, the number of people registered to purchase cannabis at pharmacies is on the rise. As of early December, Uruguay had 41,469 people registered for legal access to cannabis: 31,707 for purchases at pharmacies, 7,012 through personal cultivation, and 2,750 as members of a club. «With the number of registered users steadily growing, we have identified the supply problem as stemming from a lack of production,» said Martin Rodriguez, director of the IRCCA.

By legalizing marijuana, Uruguay sought to eliminate the black market, a goal that has been partially achieved, since this year, Legal sales exceeded illegal sales. «Uruguay is close to bringing all frequent cannabis users under the legal framework,» explains Diego Olivera, director of the National Council on Narcotics. However, this goal has been hindered by an irregular supply due to a gap between supply and demand. «Having more products available could also allow us to add retail locations and reach users in parts of the country that are currently out of our reach,» adds Martin Rodriguez.

Becoming a Producer in Uruguay

Like MJBizDaily summarizes it, To apply, participants must pay $5,000, plus licensing fees. They will then be awarded a contract to produce 2,000 kg of dried flowers per year. No other products are permitted. Each producer will be assigned a three-hectare plot in the same region on government-owned land, for which they will be responsible for external security. Cannabis must be grown indoors or in greenhouses equipped with systems to control temperature, light, and humidity. Only the two authorized varieties supplied by the government may be grown. Both are limited to 9% of THC.

Uruguay’s recreational cannabis program remains strictly regulated, and new producers will be required to comply with its requirements. Production must meet the quality standards of ISO 9001:2015 and must be verified by an independent third party. In addition, producers must have at least one pharmaceutical chemist, one agronomist, and one quality control expert on their team. Financial information, such as planned investments and the source of funds, must be included in the application.

The selected producers will be responsible for the internal security of their facilities and for delivering their products to pharmacies. One gram of cannabis sells for $1.30 at pharmacies, of which 90% goes to the producer. We do not yet know who the potential candidates are, but Aurora Cannabis has already established itself in the market with the recent acquisition of ICC Labs, one of the two recreational cannabis producers already authorized by the government.