Uruguay jumps ahead of pack, bets on exports of medical pot
NUEVA HELVECIA, Uruguay — When he was younger, the only thing that Enrique Morales knew about marijuana was that you smoked it to get high.
Today, the former driver for a dairy company is a horticulturist on a cannabis plantation about 80 miles west of the Uruguayan capital of Montevideo and he says drops of marijuana oil have been key to treating his mother’s osteoarthritis.
“My perception has now changed. It is a plant that has a lot of properties!” he said.
The company that owns the plantation, Fotmer SA, is now part of a flourishing and growing medical cannabis industry in Uruguay.
The country got a head start on competitors in 2013 when it became the first in the world to regulate the cannabis market from growing to purchase, a move that has brought a wave of investment.
For Uruguayan citizens or legal residents over 18 years old, the law allows the recreational use, personal cultivation and sale in pharmacies of marijuana through a government-run permit system, and officials later legalized the use and export of medical marijuana to countries where it is legal.
No company has yet begun large-scale export operations, but many say selling medical cannabis oil beyond the local market of 3.3 million inhabitants is key to staying ahead of the tide and transforming Uruguay into a medical cannabis leader along with the Netherlands, Canada and Israel.
“The Latin American market is poorly supplied and is growing,” said Chuck Smith, chief operating officer of Denver-based Dixie Brands, which recently formed a partnership with Khiron Life Sciences, a Toronto company that has agreed to acquire Dormul SA, which has a Uruguayan license to produce medical cannabis.
Khiron has said it should be able to export medical marijuana from Uruguay to southern Brazil under regulations of the Mercosur trade bloc, marking a milestone for Uruguayan marijuana companies focused on exports.
Fotmer, based in the small town of Nueva Helvecia, also employs 80 people and is investing $7 million in laboratories and 10 tons of crops that it hopes to ship to countries including Germany and Canada, which is struggling to overcome supply shortages in its cannabis market.
Fotmer’s 35,000 marijuana plants are sheltered in 18 large greenhouses, where workers such as Morales change into special clothing, wash their hands with alcohol, and wear gloves and surgical masks to avoid any contamination.
Helena Gonzalez, head of quality control, research and development for Fotmer, said the precautions are important in producing a quality product.
The first crop of prized flowers will be harvested for their cannabis oil in March. The oil containing THC and CBD will be extracted in its labs to eventually manufacture pills, creams, ointments, patches and other treatments for cases of epilepsy and chronic pain, among other ills.
Competition is arriving as well. In December, Uruguayan President Tabare Vazquez inaugurated a $12 million laboratory owned by Canada’s International Cannabis Corp., which aims to produce and export medicine from hemp, a variety of cannabis that contains CBDs but has no psychoactive effects.
Despite the momentum, experts say there is one key problem: Countries including Ecuador, Cuba, Panama, El Salvador and Guatemala continue to prohibit both the recreational and medicinal use of marijuana and exports of cannabis products are subject to a complex web of international regulations that is still being developed.
Diego Olivera, head of Uruguay’s National Drug Secretariat, said Uruguay’s comprehensive cannabis law, along with its strong rule of law and transparent institutions, gives it a head start.
“Uruguay today has a dynamism in the cannabis industry that is very difficult to find in other sectors,” he said.