July 9, 2021

Uruguay is on the Cusp of Legalising and Commercialising CBD Edibles

4min read

The Uruguayan government is considering proposed changes to regulations which, if approved, will result in the legalisation of edible non-psychoactive cannabis products.

Hector Gomes, LATAM Analyst, Prohibition Partners
9th July 2021


 

Once a pioneer, always a pioneer: That certainly seems to be Uruguay’s motto. A small country in terms of landmass but a nation with big ideas and a history of making bold moves, Uruguay is the first country in Latin America to be considering the legalisation of edible cannabis-infused products, among other regulatory changes, aimed at stimulating the country’s cannabis industry.

In 2021, as the world continues to deal with the ‘new normal’ and tries to recover economically from the COVID-19 pandemic, we are witnessing the diversification of the global cannabis industry; regulation changes, a permeation across continents, product innovation, and all the while getting better at identifying growth opportunities along the entire supply chain, as discussed in our recent Extraction Report webinar.

Countries in Latin America are not willing to let this opportunity pass. Colombia and Argentina are trying to adapt to domestic and international market demands, Ecuador and Peru are adapting to a new legal scenario, the Brazilian domestic market is growing despite some challenges, and Mexico, at last, voted on its pending cannabis law and legalised adult-use cannabis last week.

Progressive Legislation 

While these are the current situations in neighbouring Latin American countries, in Uruguay the cannabis discussion is more advanced, as you would probably expect for a country that legalised adult-use cannabis 8 years ago – becoming not only the first country in Latin America to do so, but also the first country in the world, in turn cementing its status as a pioneer of the global cannabis industry.

Last month, the Uruguayan government’s intentions to legalise edible non-psychoactive cannabis (CBD) products came to light. The proposed changes to current regulations would allow the production of edibles for both domestic and international sales. Exports, in particular, are a vital element of the country’s cannabis industry, with Uruguay already having exported to several countries around the world including Germany and Australia, as highlighted in The Latin America and Caribbean Cannabis Report: Second Edition.

Other major changes would include the participation of Mutualistas, a type of collective and affordable health insurance according to Carlos Lavaca, head of the country’s new National Medicinal and Therapeutic Cannabis Program. Nicolás Martinelli, the government’s official adviser on the cannabis industry, aims to propel Uruguay to the forefront of the global industry once again, just as it did back in 2013 when adult-use cannabis was legalised.

New Commercial Opportunities 

Other goals include making financial transactions easier for cannabis businesses, as well creating a hemp-related project and potentially also becoming an Industrial Free Trade Zone in the future, signalling the Uruguayan government’s clear commitment to boosting the country’s cannabis industry.

This move comes at a time when global demand for CBD and other cannabis-infused edibles are rapidly growing, particularly since the start of the COVID-19 pandemic, and some markets in the segment are maturing, as highlighted in the CBD Consumers Report. We estimate that the global over-the-counter CBD market will be worth USD$6.79 billion by 2024.

In Uruguay, there is currently no date set for the approval of the proposed regulation change for edibles, but local sources are optimistic that it could come sooner rather than later. Uruguayan companies, sources say, are ready to take on the challenge and provide the world with both high-quality medical cannabis and, hopefully soon, cannabis-infused drinks, sweets and other edible products that can both enhance the cannabis user experience and provide ample commercial opportunities to stimulate growth of the industry.

Expert Interview: Rodolfo Perdomo Rodas (Perdomo Abogados)

Dr. Rodolfo Perdomo Rodas is Head of the Foreign Trade Commission of CECAM (Chamber of Medicinal Cannabis), which brings together companies in the cannabis industry. He is also a legal expert, a Director of law firm Perdomo Abogados, and a long-time adviser to the cannabis industry in Uruguay.

Prohibition Partners: Shortly put, what are the main proposed changes to current regulations?

Rodolfo Perdomo Rodas: We’re still not sure of its official wording, but, as has been announced, the changes would be of enormous importance, positioning the country at the forefront of the world once again.

The new regulations would allow the production and registration of a huge number of edible products containing CBD as an ingredient: From chocolates to chewing gum, cookies to soft drinks, gummies, and even coffee, herbal teas and wine. And the list grows every day.

The potential for growth and added value is as long as our imagination and science allows.

Prohibition Partners: How likely is it that the regulatory changes will get approved, and when could they come into effect?

Rodolfo Perdomo Rodas: There is a sense of determination and growing synergy between the public and private sectors in the cannabis industry in Uruguay. The companies in the sector have well-founded hopes that the new regulations will be approved in a very short space of time and will come into effect immediately after approval, since it’s merely a modification of some decrees and, in principle, legal modifications are not necessarily required.

I am convinced that Uruguay will not miss this historic opportunity.

Prohibition Partners: Does Uruguay currently have the manufacturing capabilities and capacity for exporting cannabis-infused edibles and beverages to international markets? 

Rodolfo Perdomo Rodas: Uruguay undoubtedly has the capabilities to do so. Productivity-wise yes, and above all the human resources. Logically, if the new regulations are approved in the terms I imagine, this would almost directly merit an increase in Uruguay’s manufacturing capacity, and an enormous advance in the industry.

Certainly, I understand that these changes can have an important impact on the Uruguayan economy, promoting the addition of value by existing companies, and attracting many foreign investments to Uruguay.

Prohibition Partners: Regarding the mutual healthcare funds (Mutualistas), what would be the main changes for Uruguayan citizens who want to use CBD or cannabis to treat ailments or health issues?

Rodolfo Perdomo Rodas: I understand that the objective there is to facilitate access to cannabis medicine to patients who require it, and to collaborate with their health professional, which in itself would be quite a change.

I understand that, due to its relevance, the regulations will surely be the subject of conversation and analysis with the Mutualistas in Uruguay, which have a long tradition of professionalism.

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Uruguay is on the Cusp of Legalising and Commercialising CBD Edibles

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