New Ancillary Marijuana Industries Taking Root In Uruguay

With all the news surrounding the U.S. cannabis industry lately, it can be easy to overlook the changing policies and growing marijuana-related markets around the world.

Consider Uruguay, for example: in 2013, former president José Mujica made history by passing legislation to completely legalize marijuana cultivation and consumption in the South American nation, making it the first country in the world to create a regulated cannabis market. Under this new law, individuals must register as self-growers and are limited to six marijuana plants apiece. They may also purchase up to forty grams of marijuana from pharmacies each month, but pharmacy sales have not started yet.

Now, thousands of Uruguayans are growing their own plants and joining cannabis clubs. This has created an entirely new industry for aspiring entrepreneurs – growing products.

Growers Need Tools

Cannabis growers need tools, and enterprising start-ups like Sedina, Urugrow, and Your Garden as well as more established players like Yuyu Brothers are rapidly creating and distributing new lines of merchandise to fill that need. Some of the products that have seen a recent uptick in demand include:

– Soil optimized for cannabis cultivation
– Humidity gauges
– Pruning shears
– Books about cultivating cannabis
– Irrigation systems
– Rolling papers
– Plant food

As with all other industries, many entrepreneurs find themselves challenged to keep their companies competitive. A big part of this is establishing market presence.

“This is just the beginning. The market is wide open to everyone,” said Marcelo Cabrera, owner of Your Garden. “The margins are small.”

Who’s Buying Their Products?

Locals and tourists alike are flocking to these retailers for souvenirs, gifts, and kits to begin growing their own cannabis plants. According to the Cannabis Studies Association (AECU), there are currently 20,000 home growers in Uruguay. There are also fifteen active cannabis clubs, each of which is permitted to cultivate 99 plants.

Pharmacy sales’ slow start is a big part of the reason why home growing has become so popular. Although the law passed in 2013 stated that pharmacy sales are legal in the country, this part of the law has seen considerable backlash from critics. One prominent critic, current president and former oncologist Tabare Vazquez, has been openly opposed to pharmacy sales. There is currently no date set for the sales to begin and many feel they might not while Vazquez is in office.

More than Just Marijuana

There’s a bigger picture to consider regarding Uruguay’s cannabis legalization. The hemp harvested from these plants can be used for textiles, biofuels, food, and other consumer products. Many investors are watching the industry’s development for this reason – even to countries where marijuana remains illegal, the export of hemp products is a lucrative business prospect. Fabio Bastos, founder of Sedina, has already sold all of his anticipated January 2016 harvest – half for fiber production, half for medical research.

“Everyone wants hemp, everyone wants cannabis products. We are witnessing the birth of a global weed market,” he said of the burgeoning cannabis industry in Uruguay.

Photo Credit: StarsApart

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