Authors
Anabela Aldaz
Josemaría Motta
Table of Contents
Table of Contents. 2
General legal framework. 3
Permitted Activities. 4
Cannabis Products. 4
Cannabis Licenses. 6
Import/Export Regime. 7
Bank Regulation Situation. 8
Conclusion. 8
General legal framework
On January 7th of 2014 through Laws N° 19.172[1], Uruguay became one of first countries of Latin America to allow and regulate the use of recreational cannabis and for medical and research purpose. In this sense the Government create a legal framework for cannabis by creating the Laws N° 19.172 and modifying the Law N° 14.294[2] knows as the Narcotics Law. These Laws are regulated by three relevant Decrees: Decree No. 120/014[3] that refers to the recreational use of cannabis, Decree No. 372/014[4] that refers to hemp and Decree No. 46/015[5] that refers to medical or research use of cannabis. Two new laws were approved in December 2019, Law 19.845[6] regarding Scientific Investigation of Cannabis and Law 19.847[7] on Medical and Therapeutic Cannabis. In order to control the compliance with the legal framework, Law Nº 19.172 created the National Institute for the Control and Regulation of Cannabis (hereinafter the “IRCCA”) connected with the Executive Branch and the Public Health Ministry (hereinafter the “MSP”), among other authorities. IRCCA’s purposes include regulating the activities of planting, cultivation, harvesting, production, processing, collection, distribution and sale of cannabis, in the framework of the provisions of the regulation in force, as well as monitoring its compliance. It is also aimed to promote and propose actions to reduce risks and damages associated with problematic cannabis use, in line with the policies defined by the National Drug Board in coordination with national and municipal authorities. IRCCA often enacts Resolutions that set guidelines for activities related with cannabis, but these usually regulate specific aspects that are already broadly regulated in the general legal framework which remains unchanged.Permitted Activities
Law No. 14.294 establishes the general prohibition of planting, cultivating, harvesting and distribution of any plant that can be extracted from narcotic drugs and other substances that determine physical or psychological dependence. However, as an exception the Law allows the use of cannabis in production, storage, industrialization, commercialization, distribution, importation and exportation, for the following purposes: i) Scientific research or for development of therapeutic products for medical use; ii) Psychoactive cannabis; iii) Non-psychoactive cannabis (hemp); iv) Pharmaceutical use; v) Domestic psychoactive cannabis plants for personal or shared use in the home; and vi) Member’s Clubs of psychoactive cannabis plants All those permitted activities are subject to obtaining the corresponding authorization or license from the competent authorities.Cannabis Products
The Cannabis legal framework distinguishes between different types of cannabis products (e.g., high or low concentrations of THC, that is, psychoactive and non- psychoactive cannabis respectively). And depending on the use given to cannabis, distinguishes among medical or research use (it can either be psychoactive or non-psychoactive cannabis); recreational use (psychoactive cannabis) and; hemp (non-psychoactive cannabis for other uses different from the previously mentioned). Psychoactive Cannabis is defined as a flowery branch end with or without fruit of the cannabis female plant, excluding the seeds and leaves separated from the stalk, but including oils, extracts, and any preparations with potential pharmaceutical use, which natural THC equals or exceeds 1% of its volume. Non-psychoactive Cannabis (hemp) is defined as plants or parts of plants of the cannabis genus, leaves and flower tips, containing no more than 1% THC, including derivatives of such plants and parts of plants. Pharmaceutical Specialty is defined as any simple drug or compound based on cannabis (psychoactive and non-psychoactive) with a registered name before the MSP of a declared qualitative-quantitative formula, manufactured industrially and with verifiable therapeutic properties, which is commercialized in certain sale units. Vegetable Specialty is defined as “a cannabis herb or cannabis herb mixture (psychoactive and non-psychoactive)” used for medicinal purposes. Scientific Research is defined as those activities directed to the development of research projects that contribute to the knowledge and production of scientific evidence regarding the use of cannabis (psychoactive and non-psychoactive). As for the type of products that can be elaborated with Cannabis (E.g., edibles, vaping, tinctures, food additives, etc.) the Uruguayan legal framework does not establish any specific prohibition. Therefore, any product properly authorized by the corresponding governing body is allowed. Products that have already been authorized by the authorities, include cosmetics, gels, yerba mate with added non-psychoactive cannabis and medication. Regarding the retail sales of any cannabis products, they are allowed by the legal framework, but they can be restricted for a specific retail channel depending on the product:-
Pharmaceutical specialties or vegetable specialties based on psychoactive cannabis can only be sold by pharmacies of first or second category.
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Psychoactive cannabis for personal recreational use can only be sold in first category pharmacies and in community pharmacies, which have obtained the license from IRCCA.
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Other products, such as yerba mate, have no restrictions as to the establishments in which they may be sold.
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Medical products prescribed under master formulas elaborated by Pharmaceutical Chemists can be sold only by duly authorized pharmacies to such effects.
Cannabis Licenses
In order to carry out any activity related with cannabis in Uruguay it will be necessary to obtain a license or authorization issued by the corresponding authority. This process can take between six months and one year depending in the type of licenses. Entities can request the following licenses from IRCCA: i) Cannabis cultivation license for medical use; ii) Cannabis Products Industrialization License; iii) Scientific Research License; iv) License to operate in free zones and other customs areas; and v) Authorization for Cannabinoid Analytical Laboratories Licenses are not only obtained with the authorization of IRCCA, other state agencies are involved during the authorization process. In the case of an authorization for activities that involves cannabis for medical use and scientific research, the license will be granted by IRCCA and MSP. Further the National Secretary for the Fight against Money Laundering and the Financing of Terrorism (hereinafter the “SENACLAFT“) will have to issue a resolution for the license to be approved. For Recreational Cannabis the licenses are controlled by IRCCA and by SENACLAFT (except when it comes to self-cultivation and cannabis clubs). On the other hand, activities with hemp are controlled by IRCCA, the Ministry of Livestock, Agriculture and Fishery (hereinafter the “MGAP”) and SENACLAFT. As can be seen, for the majority of licenses, it will be necessary to obtain a favorable decision from SENACLAFT. The main task of SENACLAFT is to monitor compliance with the rules for prevention of money laundering and financing of terrorism, by broad powers of investigation and supervision. In the matter of cannabis licenses, SENACLAFT will analyze the shareholding structure, senior staff, and origin of the funds of the entity requesting the license.Import/Export Regime
Uruguayan legal framework allows importing and exporting certain cannabis products:- Seeds, plants, finished or semi-finished products for medicinal or scientific research purposes;
- Hemp and seeds; and
- Seeds or cuttings for the cultivation of psychoactive Cannabis plants for producers of psychoactive Cannabis for Pharmacies, self-growers and Cannabis Clubs.
