Uruguay Legal Marijuana to Cost $1 Per Gram

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Officials in Uruguay say the cost of marijuana under the country’s bill regulating cultivation and sale of the drug will be $1 per gram, a price likely to provide stiff competition to criminal groups dedicated to the trade.

According to Julio Calzada, the secretary general of the National Drug Council (JND), a gram is equivalent to one large joint or two or three smaller ones, reported El Pais. The price was set to compete with the illegal market, which is dominated by Paraguay, one of the largest producers of marijuana in the western hemisphere.

According to Calzada, the system of state-regulated marijuana sales — which will require users to register themselves in a private national database and put a 40 gram per month cap on personal use — should begin operating by the second half of 2014.

Meanwhile, the marijuana bill, which still awaits approval by the Senate, is facing a new challenge from the opposition over the budget of the Institute of Regulation and Control of Cannabis (IRCCA). The Constitution prevents the passing of a bill that requires a budget within a year of elections, which are to be held next October.

InSight Crime Analysis

Currently, around 80 percent of marijuana used in Uruguay comes from neighboring Paraguay, South America’s top producer. Proponents of Uruguay’s marijuana bill believe regulation will help cut profits of criminal organizations selling marijuana — estimated at around $30 to $40 million per year — and subsequently allow the government to focus resources on more serious security problems.

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

However, for this to happen, the government will have to ensure that the shift from illegal to legal marijuana consumption take place on the streets and not just on paper. One of the main concerns in this regard was the price, as if criminals could seriously undercut legal prices the black market would likely remain.

With the $1 a gram price tag comparable to illegal prices, it appears the government is effectively planning for this. However, several obstacles remain, and, as InSight Crime has noted, if the law is to be effective it should be coupled with tight monitoring of cultivation and severe penalties for illegal distribution.

The latest maneuvering by the opposition is a reminder that the bill also faces numerous political obstacles. While the government has so far shown no sign of panicking over attempts to scupper the bill, its position remains somewhat precarious until it becomes law. If it does not pass before the end of President Jose Mujica’s term it would likely spell the death of the law, as considerable political and popular opposition mean it is unlikely to be revived by a new set of leaders.

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