On Thursday May 5th, 2022, the Chambers of Deputies of the Argentine Congress passed the law regulating the medicinal cannabis and industrial hemp industry (hereinafter referred as the “Law”).

The objective of the Law is to establish a regulatory framework for the cultivation, production, distribution, and commercialization of cannabis, its seeds, and its derivatives intended for medicinal and industrial use.

The Law complements the act No. 27.350 of 2017 that set a regulatory framework for scientific and medicinal research of cannabis and approved its medicinal use in the Argentine Republic.

The Law grants licenses to each segment of the production chain and establishes the legal formalities for granting them. It also establishes the control mechanisms to be exercised over licensees.

For such purposes, the Regulatory Agency of the Hemp and Medicinal Cannabis Industry (ARICCAME) is established, which will be the governing and organizing agency of the cannabis production chain and will oversee the multiple regulatory bodies involved. The ARICCAME may create regional or provincial delegations to ensure swift and broad compliance with this new Law.

Primary functions of the ARICCAME include:

• Regulating the import, export, cultivation, industrial production, manufacture, commercialization and acquisition of cannabis and its seeds and derivatives.
• Monitoring the storage, transportation, and distribution of cannabis seeds and plants along with other public agencies.
• Establishing regulatory standards for best practices in planting and cultivation with the aim of coinciding with the relevant international regulations of the cannabis industry.
• Inspecting the producers’ facilities to ensure that they have been duly authorized and are complying with the regulatory standards.

Specific rules providing for the traceability will be promulgated by the National Seed Institute (INASE), a body regulating seed production and circulation under the Ministry of Agriculture.

To further the Law’s objective of promoting the scientific study of cannabis, the ARICCAME will establish joint research programs with public universities and national and provincial science and technology organizations.

The Law also creates the Federal Council for the Development of the Hemp and Medicinal Cannabis Industry. Its membership will be comprised of a representative from each province of Argentina, a representative from the city of Buenos Aires, and a representative for the country at large.

The council will meet monthly to develop regulations and advise the ARICCAME on how best to advance the industry. It will also suggest criteria for the distribution and granting of licenses and authorizations to new producers. These authorizations are based on an administrative element and an operative element.

To ensure compliance with its regulations, the Law creates a sanctioning system to penalize non-compliance. The sanctions are established on a scale: the least serious consequence is a warning and the most severe is complete disqualification from operating for a period of time. Other sanctions may include fines and suspension or expiration of the authorization.