Uruguay led the world in legalising marijuana a decade ago, but its dream of building a medical cannabis and hemp powerhouse employing thousands of people with US$1 billion in exports is facing a harsh reality check.
Shipments abroad have totaled less than US$30 million since 2018 as anemic sales, red tape and miscalculations now fuel a business exodus. Uruguay's abysmal experience, including just 750 jobs, exemplifies challenges investors face globally in building out an industry subject to intense regulatory scrutiny or outright bans in many places.
From the US to Europe and elsewhere in Latin America, the global pot business has lost some of its cachet since the gold rush days of the late 2010s and the Covid pandemic. But the downturn in Uruguay — a country of 3.4 million between Brazil and Argentina where cows outnumber people — stands out given its pioneering steps, business-friendly environment and history of building multi-billion-dollar industries like tech and forestry almost from scratch.
In the past year and a half, major cannabis producers and service providers in Uruguay like Pharmin, Global Cannabis Holdings and Boreal closed, while pharmaceutical company MedicPlast exited the business.
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