Pubdate: Thu, 20 Jul 2017
Source: Wall Street Journal (US)
Copyright: 2017 Dow Jones & Company, Inc.
Author: Taos Turner


MONTEVIDEO, Uruguay-Tiny Uruguay embarked on an ambitious social
experiment Wednesday by becoming the first country to regulate and
oversee the sale of marijuana, a policy that has enthralled pro-pot
activists and smokers abroad but has lukewarm support at home.

Under tight restrictions, the only establishments licensed to offer
marijuana are pharmacies, 16 of which began to sell here in the
capital. Pot connoisseurs lined up and then gushed about both buying
marijuana legally and the product's quality.

"It tastes great," said Daniel Souza, 48 years old, a hospital worker
who lighted up in front of city hall. "This kind of weed is great for
creativity. It will be good for my guitar playing."

The new policy comes as much of Latin America, Canada and numerous
U.S. states have legalized marijuana partially, even as several
countries continue to have tough interdiction policies against the
cocaine trade.

Some leaders in the region on the front lines of the U.S.-backed war
on drugs have increasingly voiced fatigue with those hard-line
policies. But so far, Uruguay has most decidedly broken with the
prohibitionist approach, making this country's experiment a test case
that is being closely watched by governments and activists on both
sides of the drug-legalization debate.

The move has also encouraged businesses, like Vancouver-based
International Cannabis Corp., which has a license to harvest and
export the marijuana it is producing in Uruguay.

"We are ready to start exporting to more than 12 countries, and we
will do it with a seal of quality from the Uruguayan Health Ministry,"
said Alejandro Antalich, chief executive of the company.

Uruguay moved to legalize marijuana in 2013 under then President Jose
"Pepe" Mujica. A former Marxist guerrilla, Mr. Mujica's approach aimed
to hit drug traffickers where it hurt most, in their pocketbooks. Mr.
Mujica gave the state a monopoly on the market by offering pot prices
so low it would undercut street vendors and give regional drug cartels
less incentive to operate in Uruguay.

His successor was an unlikely proponent of pot, President Tabare
Vazquez, an oncologist and antitobacco crusader. But under him,
Uruguay now has done what no other country has even tried, controlling
the production, distribution and commercialization of recreational

Supporters include Sebastian Suarez, 22, a window cleaner who smoked
pot a friend had bought on Wednesday. "This definitely has an effect,"
said Mr. Suarez after having a smoke. "I won't be smoking it before I
hang outside buildings to clean their windows."

That plan, though, has never had strong support here, even though
Uruguay has long been socially liberal, legalizing abortion,
recognizing gay civil unions and adoption by same-sex couples. Indeed,
62% of Uruguayans oppose legalization, while only 29% support it,
according to an Equipos poll published this week.

"If people want to smoke pot, fine," said Sara Casalla, 88. But she
said pharmacies shouldn't be selling it. "They should be selling
health-care products. I don't like this."

Pharmacists, to be sure, have been the most unnerved, saying selling
pot could put them in competition with illegal pot dealers or that
smokers might try to steal their pot stash.

"You have to worry about street vendors, like those we have here
around the corner," said Javier Ponce, 61, who works at Farmacia Yaro.
"We're in here all day, exposed, and turning them into competitors
isn't necessarily a good idea.

Martin Alvarez, head of San Roque, one of Uruguay's biggest pharmacy
chains, noted that the government-set price of $1.30 per gram barely
covers operating costs. "There is nothing profitable about any of
this," he said.

The government, to be sure, is doing everything to keep this country
of 3.4 million from becoming a pot mecca-and making it tough for these
companies to make much money from this tiny market. Only Uruguayan
citizens or permanent residents can buy. And those who buy have to
register their names in a national database and scan their
fingerprint. Sales are capped at 10 grams a week per person.

The regulations, plus concerns about registering with the state, have
meant that fewer than 5,000 of Uruguay's estimated 160,000 cannabis
consumers had signed up to buy pot.

Those who see greater possibility, though, are International Cannabis
and a second firm, Simbiosys, a homegrown pot producer. They are
entrusted with producing up to four tons of marijuana annually for
consumers here. International Cannabis, though, is growing far more
for export.

The global medicinal market will grow to almost $56 billion by 2025,
according to Grand View Research. International Cannabis, which has a
16,000-foot facility to extract medicinal oil from hemp flowers, plans
to produce 160 tons annually for medicinal purposes, practically all
for export.

While International Cannabis is producing now for the pot users here,
Mr. Antalich, International Cannabis's chief executive, said, "our
longer-term aim was to enter what we see as the medical market of the
future, which is medicinal marijuana."