Modern cannabis production in Uruguay
The confusion of bureaucratic procedures, as well as the resulting corruption component, when a public official has to make a decision depending on his or her vision of the situation leads to the fact that the procedure of granting the relevant permits is extremely slow and therefore only a dozen companies have been granted the right to work in this area of business for several years.
On the pages of the specialized electronic edition of Ukrainian hemp growers separate strokes described the situation in the country, which was a pioneer in the field of medical and recreational use of cannabisa. The problems of cannabis growers in Ukraine partly echo the difficulties faced by our colleagues in Uruguay. Understanding the reasons that hinder the development of cannabis production in Uruguay helps us to understand what exactly hinders the development of the national cannabis industry and what Ukrainian technical cannabis producers may face in the near future.
Why Uruguay is considered a good place to grow cannabis
Uruguayan climatic conditions allow to grow industrial sowings of technical hemp on the open ground almost without risk, in the presence of significant key resources for this business – land, ox, traditional technologies of cultivation, agricultural know-how implemented
The other undoubted advantage is the institutional stability in the country. Despite regular changes of governments, the rules of the market’remain stable for both local and foreign companies working in the field of modern horse breeding. Among other things, the country's legislation protects foreign investments, including in hemp business. Foreign specialists involved in the hemp industry can start working almost immediately after crossing the border, there are no discriminatory rules that prevent foreign hemp growers from working and developing hemp business from being hired or coming to build a business from scratch. Unlike the established thresholds for tetrahydrocannabinol in Europe and North America, Uruguay allows for the cultivation of industrial crops of low-drug hemp, where the level of THC does not exceed 1%.
There are companies in the country that specialize in seed production, as well as companies that grow plants for hemp fibre production. In other words, Uruguayan hemp growers are only partially dependent on foreign seeds and seek to create closed production chains with high added value in the field of industrial hemp production.
All Uruguayan hemp companies grow and process hemp products with an export focus. The country's domestic market cannot recoup the investments made in the industry. A number of the country's hemp companies enter into contracts to export hemp products to the United States and Europe (primarily Germany and Switzerland), but there have been no industrial transactions so far. During 2018, several small deliveries of therapeutic hemp leaves and inflorescences to Switzerland (the number of THCs did not exceed 1%), as well as to Spain.
Legislators and law enforcement and regulatory agencies distinguish between psychoactive and low-drug crops.
Country problems
As compared to other South American countries, Uruguay is a small country in size, so large-scale industrial seeding of technical cannabis in this area is not possible.
The licensing documentation governing the legality of cannabis cultivation and processing in the country has a rather complicated procedure for obtaining approval from the relevant government agencies. At the initial stage, in the Ministry of Agriculture, where representatives of hemp companies go first, it is necessary to provide a huge amount of absolutely unnecessary information – it is necessary to justify the agronomic project related to the cultivation or processing of cannabis, the origin of resources and much more. If a company is planning to work with cannabisa leaves and inflorescences, it is necessary to obtain a permit from the Ministry of Health, where again it is necessary to provide a huge amount of information that is not directly related to the cannabis business. The complexity of bureaucratic procedures, as well as the resulting corruption component, when a government official has to make a decision depending on his or her vision of the situation, leads to the fact that the procedure for granting the appropriate permits is extremely slow and, therefore, only a dozen companies have been granted the right to work in this area of business for several years.
Based on Uruguay's hemp industry innovation, the country's growers face a lack of any industry standard, which leads to significant differences in the performance of products produced by different producers. Another key challenge for the industry is the lack of knowledge, as well as the lack of professionals in the industry who are able to deal effectively with the recurring challenges. Lack of modern technologies of growing and processing of therapeutic cannabis is also one of the difficulties that constantly arise in this category.
Another problem is the lack of access to financial resources for entrepreneurs specializing in the development of cannabis production in the country due to the impossibility of financing such businesses, which is still based on federal bans initiated by the U.S.
In the field of legal medical use of psychoactive cannabis, the biggest problem is the lack of quality technical cannabis with a therapeutic focus. In particular, the catalogue of EU plant varieties that can be cultivated as industrial crops does not contain technical hemp varieties of therapeutic orientation. That is, there are no varieties that provide the opportunity to grow "outdoors" technical varieties of cannabis with a high content of cannabidiol. The Ministry of Health of the country equates cannabidiol with a drug, so the procedure for registering products containing any drug-free cannabinoids is extremely complicated and confusing.