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Uruguay Lures Foreign Investors with Cannabis Opportunities

By: Belén Marty - @belenmarty - May 29, 2014, 5:58 pm

EspañolJulio Calzada, general secretary of Uruguay’s National Council on Drugs, revealed in a recent interview that various companies and entrepreneurs from Canada, the United States, New Zealand, and Great Britain have arrived in the South American country to find investment opportunities with non-recreational cannabis use.

According to Calzada, the businessmen are looking to invest in industries such as textiles and medicine. They might also be interested in hemp-paper production, when the laws regulating the production of marijuana plants take effect.

After informal meetings between hundreds of small and large investors and government officials, Calzada foresees initial investments in projects in Uruguay, such as therapeutic treatments with marijuana, before the end of the year.

In April, President José Mujica said in an interview with the Wall Street Journal that cannabis was a plant that could give rise to a multitude of industries, and he broached the promise of legal marijuana-related businesses.

On May 5, Mujica signed the presidential decree that lays down the rules, regulations, and penalties related to the growth, consumption, production, distribution, and commerce of the plant. Under this legislation, the state will produce up to 22 tons of cannabis per year, and the crops will be guarded by the same military officers that had once been in charge of destroying them.

These rules allow for an individual to grow and harvest up to 480 grams of marijuana every year for personal consumption, and licensed drugstores will also sell it at roughly US$1 per gram. Further, in late 2014, cannabis users in Uruguay may be able to legally purchase the substance from private growers, as the government plans to issue them sales licenses in June.

Regulations governing the industrial and medicinal use of marijuana may not yet ready, but Calzada plans to publish the new rules within 2 to 4 months, respectively. The secretary also left the door open for a change in the plant’s export ban, although if permitted it would only concern non-recreational uses.

On-the-Job Cannabis Controversy

Meanwhile, some 20 Uruguayan companies across different industries have petitioned President Mujica to reform Decree 120/2014 regulating the use, production, and distribution of marijuana, since it prohibits employers from punishing employees who are caught under the influence in the workplace.

Section 43 of the decree does provide for “non-invasive checks” on workers, and a bipartisan job security panel will decide if an employee is to be recommended for addiction treatment. Despite the ban on punishment, the regulation does prohibit the use of cannabis during the workday.

So controls will be enforced ​​”without disciplinary sanctions if the worker has not committed any concrete punishable acts emerging from contractual obligations, regardless of whether or not it was caused by cannabis abuse.”

For lawyers Diego Durand, Pablo García, Martín Carrasco, and Nicholas Barquet, who drafted the petition, Paragraph 8 of Article 42 is “illegitimate,” as it does not meet objective law criteria. They attest that it was promulgated with a different objective, since it “invades the contractual employment relationship between individuals, reducing the employer’s reach and putting the worker’s life and physical integrity at risk.”

Durand complains that it is “totally illogical” that Uruguay’s government forbids marijuana-related penalties on employees, while at the same time it enacts laws that will sanction employers for failing to provide safe working conditions.

“A worker can become reckless or negligent under the influence of cannabis and can even be a danger to his employer. This is why it is totally illogical that the company’s owner can’t punish that person,” he said.

Translation by Daniel Duarte.

Belén Marty Belén Marty

Belén Marty is the Libertarian Latina, a journalist based in Buenos Aires, Argentina. She has lived in Guatemala, Jordan, the United Arab Emirates, and the United States and is a former candidate for local office with Argentina's Libertarian Party. Follow @BelenMarty.