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The takeoff of the marijuana industry makes Uruguay a world leader


Uruguay became the first country worldwide to legalize marijuana. It did it in 2013 and the Government has already managed to take 55% of the business from drug dealers. It also accelerated tax collection. And for the future it expects to enter 1,000 million dollars in exports. Achieving this would be massive, not only for the country but also for the world, which is increasingly interested in the cannabis industry.

Global trend

The Canadian Canopy Growth, the most important cannabis group in the world, has landed in Spain. It did it by buying Cafina, a small business with a growing license to expand its medicine unit in Europe.

The same Canopy received in August 2018 a capital injection of 3,371 million dollars by the US group Constellation Brand, owner of Corona beer.

The marijuana business also seduced the Californian influencer Dan Bilzerian. The well-known "Instagram King" founded Ignite, a company that markets oils and beauty products made with this plant.

On Wall Street, the companies that operate with cannabis are doing so well, and there are so many, that they even have an index of their own. North American Marijuana Index, which in 2018 was revalued more than 400% and this year it is again on the rise.

The fact is that the marijuana industry, legal cannabis, is fashionable. Especially since June of 2018, Canada became the first economic power to legalize the recreational use of this drug. However, the pioneer label does not correspond to the American giant, but to a small southern country: Uruguay.

Uruguay approved the legalization of marijuana for its citizens in 2013. The implementation of the norm, however, has been done progressively. Establishing a network of pharmacies authorized for sale. Organizing quality controls. Facilitating the land and cultivation licenses by the State. Implementing digital recognition systems for consumers, who are identified in a public registry.

The control of all this is in the hands of the Institute for Regulation and Control of Cannabis (IRCCA). This institution, dependent on the Government of Uruguay, has also been calculating the impact that the legalization of marijuana has had.

The use of marijuana has grown especially in some sectors of the population. Among those aged between 55 and 65, for example, consumption has tripled. Before only 0.6% of citizens of that age range used cannabis. Now, with the facilitated access, it is 1.9%, according to the 'Cannabis Monitor' report carried out by the Faculty of Social Sciences of the University of the Republic.

One of the most positive data to date is that 55% of marijuana users buy the drug legally and not on the black market. This means that the measure has taken more than half of the business from drug dealers, which is equivalent to 23 million dollars.

This, in turn, has generated collateral damage: violence. Homicides particularly. Deaths associated among drug traffickers, desperate because they are losing business.

In the first semester of 2018, which are the last official data published to date, in Uruguay the murders increased 66%. There were a total of 218, of which 98 are related to drug trafficking, according to the Interior Ministry.

While the government reinforces security measures, they continue to look to the future with optimism. Because in addition to taking away business from drug trafficking, they are getting more income for Uruguayans.

As more marijuana companies are operating legally, the country productive sector expands. Also the tax collection capacity of the State grows thanks to the greater fiscal contributions. It was 1.7 million dollars in 2018, according to official figures.

This business has also brought investments for Uruguay. The IRCCA has approved cannabis projects worth 57 million dollars since 2015. Currently, they are reviewing permits for 21 new projects valued at 40 million dollars.

According to a recent interview with the Bloomberg agency, US investor Jordan Lewis, director of Silverpeak Life Sciences Uruguay, is confident that the South American country will be the first in the world to reach 1,000 million dollars in annual exports "in just five years". This will depend, however, that "the pace of investment from North America to Uruguay accelerates."

In North America, with the business already legalized in Canada, the focus is on the United States. While in eight of 50 states the consumption, production and legalization are totally legal - in other 21 the use of medical marijuana is allowed - it is calculated that the industry is leaving in the country 10,000 million dollars.

This is true even with the government's restriction on banks, which prevents them from financing activities related to marijuana, since it is considered an illegal substance. However, given the boom that this industry is having, the Department of the Treasury has already opened the door to modify the standard.

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marijuana

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