Uruguay Plans to Impose Price Cap on Legal Marijuana at $1/Gram

Uruguay is on its way to becoming the first country in the world to legalize marijuana and it’s taking a unique approach. The country’s drug czar, Jose Calzada, told a local newspaper on Sunday the national government plans to set up a regulatory agency for overseeing the sale and distribution of marijuana at roughly $1/gram.

vaporizors_/Flickrvaporizors_/FlickrAccording to Calzada, marijuana sales will likely start in the middle of 2014. Unlike Colorado and Washington’s approach of taxing the drug for revenue, Calzada said the state will impose a price cap in order to undercut the black market, where pot sells for roughly $1.40 (30 pesos) per gram.

"The illegal market is very risky and of poor quality," Calzada said. The state "is going to offer a safe place to buy a quality product.”

As the AP reports: That's an eighth or less of what marijuana costs at legal medical dispensaries in some U.S. states.

However, before Uruguay’s pot distributors can (legally) sell anything, the Senate first needs to approve a legalization bill that is coming up to vote later this year. The bill is expected to pass, as Uruguay’s lawmakers generally support drug policy reform. President José Mujica has campaigned for legalization on the grounds that it will dramatically cut cartel violence. And Senate leaders have said they have a “comfortable majority” willing to vote in favor.

The legislators’ main hurdle is the public, 64% of whom oppose the bill. Many are worried that legalization could open the door for harder drug use and that it could turn the country into a hub for marijuana tourism.  

If the bill does pass, Uruguay will set up an Institute for the Regulation and Control of Cannabis and implement provisions regulating the purchase and production of recreational marijuana. A few of the provisions, according to RT:

Uruguayan citizens will be required to register in a private database… and will be restricted to 40 grams each per month.

Citizens will legally be allowed to cultivate six marijuana plants per head or band together and organize a club of up to 45 members with the possibility of growing 99 plants. 

The law will also limit sales to residents, which should be a boon for Uruguayans concerned about pot tourism and a disappointing drawback for said potential pot tourists.  

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  • Hugh Akston||

    Price caps! Why didn't I think of that? You guys that's like the solution to all of the world's problems. We'll just cap food prices at a dollar so that poor people can afford to eat. We'll make doctors charge no more than a dollar for their services so that everyone can afford medical care. We'll force Apple to sell iPhones for a dollar and I'm absolutely certain that they will continue to produce high-quality electronic devices. Because!

  • Stormy Dragon||

    Price caps might actually work better than prohibition. The resulting shortage will make it impossible for anyone to actually find the now legal marijuana.

  • Scarecrow Repair||

    ... except in the new reformed and revised black market.

  • Austrian Anarchy||

    Why would they need a new black market when the old one was working just fine?

  • Stormy Dragon||

    I was being facetious.

  • Austrian Anarchy||

    This is Jerry Rubin's dream come true, just $1/gram more than his target price.

  • ||

    Do these people not have history books or a connection to the internet? Because I'm pretty sure that they can find endless examples of the utter failure of price caps, and no examples of a success for price caps.

    But why learn from history? It doesn't matter, wishful thinking matters. Right?

  • AlmightyJB||

    Only feelings matter

  • Jquip||

    True, the answer is obviously more regulation then. A $1/gram price cap and a $1/gram sin tax. That'll stop the black market cold.

  • OldMexican||

    Calzada said the state will impose a price cap in order to undercut the black market, where pot sells for roughly $1.40 (30 pesos) per gram.


    Because price controls have shown not to encourage black markets and artificial scarcity, ever.

    The legislators' main hurdle is the public, 64% of whom oppose the bill. Many are worried that legalization could open the door for harder drug use and that it could turn the country into a hub for marijuana tourism.


    Such poll numbers should tell you that the Uruguayan public school system achieved the desired [I guess] goal of turning more than half the population into unthinking imbeciles prone to bouts of emotion-driven irrationality.

  • PD Scott||

    Maybe they just really hate jam-band music.

  • ||

    Maybe they hate Peruvian pan flute bands

  • OldMexican||

    Uruguayan citizens will be required to register in a private database... and will be restricted to 40 grams each per month.


    Oh, jeez. If the Uruguayan people reacted to that instead, with the same sense of wariness they show towards the idea of simply legalizing pot, I would never think that more than half the population are unthinking imbeciles who are prone to bouts of emotion-driven irrationality.

  • Austrian Anarchy||

    They stole that from the aspirin module in Obamacare 2.11

  • Dave Krueger||

    The U.S. would never do anything to undercut the black market. We have a prison industrial complex to support. Think of all the DEA neanderthals, tough on crime DAs and judges, prison guards, and drug treatment "professionals" that would have to go out and find real jobs if it weren't for the "crime" generated by the black market (in all kinds of stuff).

  • OldMexican||

    Re: Dave Krueger,

    We have a prison industrial complex to support.


    Jobs programs for illiterate morons. We need to have those! Think of the children!

  • fortuenti||

    Counting heads and turning keys, flying around in helicopters or traipsing through the forest looking for plants growing from the ground, shuffling papers in order to steal people's property and ruin their lives...all careers that contribute much to our economy and America's heritage of "liberty and justice for all," eh?

  • Acosmist||

    In what sense is this legalizing? Words have meanings.

  • OldMexican||

    Re: Acosmist,

    In what sense is this legalizing?


    In the sense that it is the government doing it, ergo it becomes legal. Haven't you learned from our question-begging friends on the left?

  • OldMexican||

    Citizens will legally be allowed to cultivate six marijuana plants per head or band together and organize a club of up to 45 members with the possibility of growing 99 plants.


    Oh, I am foreseeing a circus on defining a "plant" in regards to size and number of leaves.

  • Hyperion||

    No matter how imperfect what they are doing is, it is still a thorn up the arse of the US WOD, and that is good thing.

  • SIV||

    Well, Uruguay could always decide to re-illegalize it and then they'd have a handy doper database so they'd know whose dog to shoot. The US could get behind that in a big way.

  • Hyperion||

    Could, but it ain't happening, bro.

  • Sigivald||

  • Sigivald||

    Unlike Colorado and Washington’s approach of taxing the drug for revenue, Calzada said the state will impose a price cap in order to undercut the black market, where pot sells for roughly $1.40 (30 pesos) per gram.

    "The illegal market is very risky and of poor quality," Calzada said. The state "is going to offer a safe place to buy a quality product.”

    If the State is actually going to offer "a safe place to buy a quality product", and the competition is dangerous and sells bad weed, why do they need a price cap?

    They'll simply outcompete the black market, if they can sell a good product at a lower price.

    This is why there's no black market in Everyday Consumer Goods in the first world; there's nothing artificially inflating the prices* and competition solves the rest.

    (* Enough to make a black market to get around them worthwhile, at least. All sorts of everyday regulations and such inflate prices, but rarely enough to produce a black market.)

  • Sevo||

    "If the State is actually going to offer "a safe place to buy a quality product", and the competition is dangerous and sells bad weed, why do they need a price cap?"

    For the same reason Obo needs the IRS to force people to buy his shit insurance: He (and they) are lying.

  • Paul.||

    People don't appreciate just how complex the regulations are in Washington. I still suppose it's better than illegal marijuana, but it's a system the Breshnev-era Soviets could only admire:

    Retail stores would be allocated by population and accessibility, in a system similar to the one used for defunct state liquor stores. That system sought to have stores within a 15-minute drive for 95 percent of the population.

    Production limits, allocation of stores per state-projected demand based on population centers. The only thing missing is the collective farm with large social-realist pictures of the Governor overlooking the fields.

  • shamalam||

    $1.00 per gram is $28.50 per ounce, $460 per pound. A free market price for pot would probably be considerably less than this (I am guessing between $10 and $20 per pound), so there is room for the black market to compete with this price.

    If the Urugayans are really concerned with the black market, the best approach would be to simply legalize it entirely and let the market determine a fair price. The only ones left in the market would be people making a simple profit.

  • sloopyinca||

    Uruguayan citizens will be required to register in a private database... and will be restricted to 40 grams each per month.

    "Good news! It's been announced that chocolate marijuana ration is to be increased to 25 35 grams per week month!"

  • Austrian Anarchy||

    Bad news, Soylent Green ration is cut back to one kilo per month.

  • Hyperion||

    They are going to get one hell of a lot of tourism increase from Brazil and Argentina. Done told you, you can argue with that, and you will be proved a fool.

  • Paul.||

    Tax us! Regulate us! Set us free!

  • Sevo||

    "Uruguay is on its way to becoming the first country in the world to legalize marijuana and it’s taking a unique approach. The country’s drug czar, Jose Calzada, told a local newspaper on Sunday the national government plans to set up a regulatory agency for overseeing the sale and distribution of marijuana..."

    "Legalizing" = "regulating"

  • BakedPenguin||

    "No way am I selling for less than $12 a gram. They can buy all the shitty mall dope they want for a dollar a gram."

    /Ricky

  • Eric Bana||

    I don't think it's wise to expect huge differences in cartel related violence through marijuana legalization (even if it were legalized right). The vast majority of money driving the cartels comes from cocaine trafficking.

  • ||

    Just looking at that picture is making my eyes red.

  • JidaKida||

    Dude does not like that at all man, not at all.

    www.AnonWonders.tk

  • Alice Bowie||

    Cashing in the 401K
    Buying a one way ticket to Uruguay
    Not coming back.

  • fortuenti||

    ``The legislators ... are worried that legalization ... could turn the country into a hub for marijuana tourism."

    What's the problem with that? That would be good for their economy by creating new jobs and business opportunities.

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