A new report on Uruguay’s legal recreational cannabis efforts reveals several interesting data points and trends.
To start, since the recreational market officially kicked off last year, almost 35,000 people have registered with the government to buy cannabis legally from pharmacies and marijuana clubs, as well as grow cannabis at home. Most are buying their cannabis from the pharmacies for now (about 23,000), but I suspect that more will be growing as time goes on. More pharmacies are expected to come online in the near future as well, which should increase the number of people registered overall.
Another interesting stat from the new report shows that only 17% of those registered are over the age of 44, which could account for what seems like a low number of total registrants (about 1% of Uruguay’s total population). For some reason – whether it is a cultural/religious stigma or something more – older people in Uruguay are not flocking to legal marijuana the way older folks in the U.S. have been.
Another reason for the apparent slow growth of the legal recreational market in Uruguay could be something I talked about extensively last year: heavy government involvement in the industry.
“…here is what is going to happen: since the government has no incentive to grow quality marijuana – with no competition, consumers have nowhere to turn to for legal marijuana if they are unhappy with what is at the pharmacies – the quality of legal marijuana will always remain low compared to what can be grown by someone with a mild competency in cultivation,” I wrote last July. “And since the government decides how much will be grown regardless of demand, there will likely be constant shortages. If the fixed price of $1.30 a gram is below what would be a fair price worked out by the laws of supply and demand, this will exacerbate the shortage problem even further. The government will then increase supply in an effort to keep up with demand, which will lead to a surplus of marijuana that needs to be stored properly, leading to waste. The government will forever be adjusting the levels to keep up with a shifting and growing market, all while fighting the black market and the importation of higher quality marijuana from other countries.”
How correct this theory is remains to be seen, but low quality marijuana at pharmacies would certainly drive up the number of people who opt to grow their own or continue to buy on the black market. The difficulty and expense of home-growing will dissuade many from undertaking the effort, leaving consumers in Uruguay to decide just how they want to obtain their cannabis from a few mediocre options.