Getting regulation right

Assessing Uruguay's historic cannabis initiative
Geoff Ramsey
Washington Office on Latin America (WOLA)
November 2016

After close to three years, the final element of Uruguay’s historic cannabis law is set to be implemented in the coming weeks, as commercial sales are expected to begin soon. While advancements have been slow and deliberate, Uruguay is not alone in taking such a cautious approach. The U.S. state of Maryland, for instance, approved a medical cannabis program in 2013, but a series of careful adjustments has postponed sales until 2017.

application-pdfDownload the report (PDF)

Now that the commercial sales element of the law is about be phasedin, the government of President Tabaré Vázquez is facing a key moment ofopportunity. With the basic structures created by the law soon to be upand running, the government should ensure a robust system of monitoringand evaluation is also in place, to assess whether the cannabis law isin fact achieving its goals, identify problems that may arise, andindicate where and how the new regime may need to be revised.

This report, “Getting Regulation Right: Assessing Uruguay’s Historic Cannabis Initiative,” lays out the progress that Uruguayan authorities have made in rolling out the law to date. It also examines current monitoring and evaluation efforts underway, as well as opportunities for Uruguay to respond to potential obstacles thus far. Uruguay’s government makes no pretense that its law should be a model for others. But Uruguay’s leaders also know that, as the first nation to legalize and regulate every level of the cannabis market, their new system will be coming under close scrutiny, at home and abroad. As citizens and leaders elsewhere ponder whether and how to legalize and regulate cannabis in their own countries, the lessons to be learned in Uruguay can help inform cannabis policy well beyond the country’s own borders.

On Implementation:

The implementation of Uruguay’s historic cannabis law has moved forward at a cautious pace. This has allowed authorities to think through the implications of each element of the law. At time of writing, two of the three methods of legal access to cannabis (home cultivation and cannabis clubs) have begun operating, and the third (commercial sales) will begin in the coming weeks. In Uruguay today, there are over 5,300 registered home growers, and 22 licensed cannabis clubs.

As a result of a newly approved five-year government spending plan, the projected budget for the law’s main regulatory agency, the Institute for the Regulation and Control of Cannabis (IRCCA), is expected to grow from roughly US$650,000 in 2016 to nearly US$1.2 million in 2020. However, serious challenges to implementation remain. While it will receive new funds under the new budget, the relatively small size of the IRCCA staff could hamper the agency’s ability to demonstrate its regulatory capacity, and thus the government’s ability to properly regulate the legal cannabis market. Moving forward, the government will also need to ensure that public education campaigns are smartly crafted and adequately funded.

As implementation has proceeded, it has become clear that some elements of Uruguay’s cannabis experiment may need to be reworked. For instance, there is reason to question the government’s plan to sell commercial cannabis at a single price of roughly US$1.20 per gram, regardless of its potency. Polls also show evidence that Uruguayan cannabis users may be reticent to fully stick to the regulations restricting them to one of the three methods of legal access (home-growing, cannabis clubs, or commercial purchase). The future of Uruguayan cannabis clubs, at least as currently allowed by the law, is also complicated by restrictive financial and organizational rules.

The implementation of the law so far has been hampered by a lack of coordination and information-sharing among the institutions associated with cannabis regulation, as well as with the public. Although the structure of the IRCCA was meant to bring together a wide range of technical expertise to approach bureaucratic problems, it has occasionally resulted in bottlenecks.

On Monitoring and Evaluation:

The government of Uruguay has expressed a serious commitment to monitoring the impact of a legal, regulated cannabis market. Since his election in October 2014, President Vázquez has promised that the law will be subject to a careful monitoring and evaluation process. To this effect, a special research unit in the Ministry of Health will submit annual reports to Congress, which will track the law’s effects on a series of indicators previously outlined by an appointed “Scientific Advisory Committee.”

In practice, however, the Vázquez government can do more to honor this commitment. Official efforts to monitor and evaluate the law thus far have not been made public, hampering civil society and academic efforts to carry out monitoring and evaluation. Researchers complain of not only a lack of access to official data, but also that officials have been slow or uncooperative in approving important research on cannabis-related issues. This has made it unnecessarily difficult for authorities to benefit from independent analysis of cannabis trends and policy in the country.