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The Major Hurdles for Uruguay’s Marijuana Experiment

Pro legalization activists in Uruguay Pro legalization activists in Uruguay

After months of delay, Uruguay is finally on the verge of becoming the first country to regulate every aspect of the black market for marijuana. Getting the marijuana regulation bill through Congress required pressure from civil society and considerable arm-twisting within the ruling Frente Amplio (FA) coalition, but the hardest part for the government is yet to come.

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On the evening of December 10, the FA majority in the Uruguayan Senate passed the bill to regulate marijuana in a 16 to 13 vote. President Jose Mujica will likely sign it into law before the end of the year, and authorities have said its implementation could begin as soon as April 2014.

The measure will authorize cultivation for personal consumption of up to six plants per household, and commercial production of marijuana will be carried out by private entities licensed by the state. The commercially-grown marijuana will be sold in pharmacies to Uruguayan residents only, who can buy up to 40 grams per month. All of the above will be overseen by the Institute of Regulation and Control of Cannabis (IRCCA), and unauthorized forms of marijuana cultivation, distribution and sale will be penalized.

Uruguay - Marihuana

Or at least, that is the plan. But even as the government moves forward with the measure, the future of marijuana regulation in Uruguay is murky. Polls suggest the majority (61 percent) of the population remains against the bill, and opposition politicians have vowed to repeal it. With the political climate less than ideal, the government has been careful to frame the bill as an experiment. In a recent interview with Argentine news agency Telam, Mujica said he would not hesitate to "turn back" from the plan "in case the reality shows us that we are wrong." National Drug Secretary Julio Calzada, who heads the administration's drug policy agency, echoed this in a December 9 interview with EFE, although he was careful to add that future changes would not mean "returning to the path" of marijuana prohibition.

SEE ALSO: Uruguay News and Profiles

If this test is to succeed, it will need to overcome a number of obstacles, both long- and short-term. While the short-term challenges are political threats to public confidence and the immediate goal of getting the bill up and running, the long-term obstacles will have the most impact on the country's historic experiment.

The Short Term: Over the Next Year

Public Opinion - This is by far the most over-hyped threat to the bill. While it is true that the majority of those polled say they are opposed to the initiative, the Frente Amplio has a proven ability to pass unpopular legislation without negative consequences. This was illustrated in June, when only 8.9 percent of the electorate participated in an opposition-organized vote to trigger a mandatory referendum on the FA's abortion decriminalization measure. Prior to the law's passage in October 2012, public opinion surveys suggested that 49 percent of Uruguayans opposed abortion decriminalization. A Cifra poll published ten days before the referendum, on June 13, showed that 51 percent of respondents said they would "probably" or "definitely" turn out in the vote. The fact that the turnout fell far short of this showed that polls are not always the best indicator of what the Uruguayan public deems politically acceptable.

A Referendum - Despite the FA's success with abortion, opponents of marijuana legalization have vowed to organize a referendum on the issue. In order for them to do so, however, they will need to move quickly in the coming weeks to provide election officials with signatures from two percent of the electorate (roughly 52,000 people). If this is received, a preliminary vote on the measure would be convened within 45 days, as occurred with the abortion vote. If -- unlike abortion -- over 25 percent of the electorate participates in that vote, a mandatory referendum would be held within 45 days following primary elections on June 1. This means there is a chance that the marijuana regulation law could face a referendum in July 2014. Still, the odds of this happening are very slim, especially considering that opposition to the measure is relatively flexible. According to an October survey by local pollster Factum, the vast majority -- 78 percent -- of Uruguayans say they prefer users of marijuana to have access to the drug through the state, compared to just five percent who say they would prefer it to be sold on the illegal market.

Election Season - Uruguay will hold general elections on October 26, 2014. This is the biggest risk to the law in the short term. Fortunately for drug reform advocates, opinion polls suggest that the Frente Amplio continues to hold an advantage over the two opposition parties. A Cifra voting intention survey published last month shows 44 percent for the FA, 27 percent for the National Party and 15 percent for the Colorado Party. Ex-President Tabare Vazquez, the likely winner of the FA's June 2014 primary, is the most popular politician in Uruguay. His victory in 2014 is all but guaranteed. The National Party's Jorge Larrañaga, who will likely be Vazquez's main adversary, has already positioned himself against marijuana legalization, releasing a list of 20 reasons why he opposes the bill. Because public opinion is (at least superficially) on his side on the issue, Larrañaga can only gain from using the bill to attack his opponent. This will raise pressure on Vazquez -- whose endorsement of marijuana regulation in August came as a surprise -- to distance himself from the initiative if it becomes a threat to his election.

A Court Battle - A new threat to the bill emerged just as the Senate Health Committee was finalizing its hearings on the issue in late October. The opposition challenged its legality, invoking a constitutional ban on legislation creating newly-funded institutions one year before a general election. However, the government has maintained that it is within the bounds of the constitution, as it is in fact a private entity licensed to carry out certain public functions, like the National Institute of Seeds (INASE), an organization responsible for ensuring quality control and genetic variety of farming seeds in the country. Additionally, the opposition has claimed the addition to the bill of a requirement for drug awareness education in schools -- added to ensure the vote of holdout FA lawmakers in the lower house -- infringes upon the autonomy of the public education system. Even if neither of these arguments is successful in court, a high-profile legal battle would surely fuel public doubt about it, potentially creating an opening for its critics.

Cracking Down on Unlicensed Growth - While widespread public opposition to the marijuana law is unlikely to result in its immediate repeal, this does not mean that Uruguayans will have endless patience for it if it is poorly implemented. There will be an incentive for the government to demonstrate zero tolerance for illicit cultivation, especially on a scale that amounts to trafficking. Because the IRCCA currently only exists on paper, it is still unclear how it will ensure that those who obtain home cultivation licenses stick to six plants per household. Will authorities carry out periodic checks? Will individuals be left to self-regulate? How strictly will those who violate IRCCA regulations be punished? These are all questions that are not answered in the text of the law, and will have to be determined by Uruguayan officials in the coming months.

The Long Term: Over the Next Five Years

Defining "Success" - Assuming that the Uruguayan government gets through all of the above, it will face the difficult challenge of presenting the bill to the public as a success. This is much easier said than done. Ever since Mujica first proposed marijuana legalization in June 2012, the government has framed the measure as a way to reverse rising insecurity and criminal activity in the country. While local human rights groups and drug policy reform advocates like the Regulacion Responsable coalition have also stressed the health and education benefits of marijuana regulation, the administration has stuck to its security-based narrative. Regulating the most widely-consumed illicit substance in the country, according to officials, would undercut a $20-$40 million per year black market, and the criminal groups profiting from it would take a big hit.  But the public remains unconvinced by this argument (See Transnational Institute's excellent breakdown of the workings of the law below). A July survey by Cifra found that just 27 percent of Uruguayans believe the bill would reduce the country's drug trafficking problem, compared to 33 percent who said it would stay the same and 31 percent who said it would increase. This means that if the government continues to frame the law as a blow to drug trafficking and crime, it will need the statistics to back it up. If homicides or other violent crimes actually increase, authorities will find themselves in an extremely awkward position.

Uruguay WEB infographic2.resized

SEE ALSO: Uruguay: Marijuana Organized Crime and the Politics of Drugs

International Pressure - If the law is to remain in place, the government will have to find ways to justify it to the international community. Uruguay has already come under significant pressure to back away from legalizing marijuana from neighboring Brazil and Argentina, not to mention the UN International Narcotics Control Board, which sees it as a breach of Uruguay's international treaty obligations. While the international climate is easier now that two US states -- Washington and Colorado -- have legalized the drug as well, the bill will still invite criticism from the country which remains the biggest proponent of the "war on drugs."

Finding a Balance - To properly regulate Uruguay's marijuana market, officials will have to strike a difficult balance. The state must make sure that enough is produced to satisfy domestic demand, while avoiding producing too much and having excess amounts of the drug in storage. Either a shortage or surplus or marijuana would invite censure from critics, who will no doubt be looking for any signs that the initiative is not having its intended effect. Additionally, the government will have to determine whether it will agree to demands from some marijuana activists for a cultivation model that incorporates economic development, or if it will involve only a handful of experienced growers that already have the capital and technology to produce the crop in a reliable, more traceable way. From a regulatory standpoint, the latter may be much easier to manage, although it could cost the government allies in civil society, as well as the FA's left-wing base.

Setting a Price - The government will have to establish a price for the drug in pharmacies that somehow undercuts the black market and covers the operational costs for private growers at the same time. The initiative was also sold to the public as a potential source of revenue, and if the government has to subsidize marijuana cultivators' costs it will take a toll on the credibility of the law. While international and local press have breathlessly reported the $1 per gram price as a concrete fact, this is subject to change depending on future variables. Ultimately it will be up to the IRCCA to determine the final price, which will have to incorporate associated production and distribution costs. It will also have to resist political pressure to raise taxes to generate more revenue, which would boost the price and make it less competitive with Paraguayan marijuana.

If Uruguay manages to implement the law successfully, it could have implications beyond its borders. After years as the main theater in the war on drugs, Latin America is emerging as the epicenter in the search for new alternatives. The 2012 Summit of the Americas in Cartagena, Colombia, was a major turning point for the region. There, leaders like Colombian President Juan Manuel Santos and Guatemala's Otto Perez Molina called for a regional debate on drug legalization and decriminalization. In the months and years since, decriminalization initiatives have gained traction in Colombia, Ecuador and Mexico.

SEE ALSO: Coverage of Drug Policy

As alternative drug policies like these pick up steam around the region, policymakers will no doubt look to Uruguay's experience for guidance. In Mexico, where legislators are considering a bill that would open marijuana dispensaries in Mexico City, some are already talking about the "Uruguayan model" as a potential path forward. Ultimately, however, whether it is a cautionary tale or a definitive source of inspiration will depend on the government's ability to adopt a regulatory model that adequately meets the needs of Uruguay's market.

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