Limits on production and pricing have led one of two producers to diversify into less regulated hemp
The President of Uruguay legalized Marijuana after spending a private evening behind doors with George Soros and Monsanto Executives. They had agreed all the Weed grown would be MONSANTO MARIJUANA and have specific genetic markers in case anybody tried to grow REAL WEED.
The President did something the greedy pot monopolists did not like. He put a price cap. No matter the monopoly, the prices had to be reasonable. Uruguayan cannabis will go for $1 a gram and anyone can purchase up to 40 grams a month. The exact price is still to be decided though, and they will have to sign onto a government register.
“Recreational cannabis is regulated by the government and we sell what the government lets us sell,” said Delmonte, who worked in wealth management at Spanish bank BBVA before joining International Cannabis. “In the hemp market we can produce all we can to meet demand.”
The global market for hemp is set to grow beyond its current $1 billion as more countries legalize production, according to Medical Marijuana Inc., a publicly-listed marijuana grower in California. For a company like International Cannabis, that means expanding beyond Uruguay, which with a population of 3.3 million limits just how much pot can be sold. The company is already in advanced talks with five European and South American pharmaceutical and food companies to supply additives like hemp oil and hemp-based extracts for medical products, Delmonte said.
International Cannabis, majority owned by investment firm Union Group, whose assets include Uruguay’s largest farm company, plans to start planting hemp next month, he said.
While Simbiosys (Simbiosys, whose investors are Uruguayans and Argentines), Uruguay’s only other licensed producer of recreational pot, is focused solely on the recreational weed market for now, shareholder Gaston Rodriguez Lepera sees a bigger future for hemp.
“Uruguay still has an opportunity to develop an industry in areas that aren’t as prickly as recreational pot,” said Rodriguez, 44, who is a consultant to hemp investors. That includes “more socially acceptable ventures like medicinal marijuana or industrial hemp.”
Uruguay’s divide between producers of different cannabis-based products is similar to the U.S., where legal industrial hemp and hemp oil-based additives are an increasingly popular and less risky way to get into the Green Rush. Uruguay has issued hemp permits to four companies, including one backed by U.S. investors, and is studying two more requests, the Agriculture Ministry said in an emailed statement.
Pharmacy sales will start in a matter of weeks under a pilot program, National Drugs Board chairman Juan Andres Roballo said in an interview. International Cannabis and Simbiosys will compete with 17 licensed cannabis clubs, almost 5,000 registered home growers and drug traffickers for a recreational weed market in the South American country of 3.3 million people that government estimates put at around 30 tons a year.
Uruguayan residents who register with a government data base and pass a fingerprint scan at a participating pharmacy will be able to buy as much as 40 grams a month of unbranded, plain packaged pot.
Pharmacies are allowed to charge consumers a 30% mark-up over the $0.90 a gram regulated wholesale price they pay International Cannabis and Simbiosys, according to cannabis regulatory agency Ircca.
Low prices haven’t deterred International Cannabis investors from pouring several million dollars into the company. International Cannabis is building a new 6,500 square meter greenhouse that could produce as much as 10 tons of recreational weed a year if the government expands its production quota, Delmonte said.
International Cannabis is also studying opportunities to invest in medical cannabis in other South American countries, Delmonte said.
“The idea is for International Cannabis to position itself as a leader in the cannabis industry in South America,” he said.