Market Revenues and Economic Opportunities in the Legal Cannabis Market in Uruguay
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Date
2025-08-12
Open Access Location
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
LSE Press
Rights
(c) 2025 The Author/s
CC BY 4.0
CC BY 4.0
Abstract
Background: The regulated cannabis market in Uruguay has received international attention as an alternative to profit-maximising cannabis legalisation models. However, relatively little is known about how this market has been operationalised. The goal of our policy commentary is to identify the key actors with a role in the legal regulated cannabis market, provide estimates of the annual revenues, discuss the existing market opportunities, and consider the implications for the economic aspects of social justice.
Methods: Our commentary is informed by a review of key relevant literature and other documentary sources, as well as insights from qualitative fieldwork in Montevideo.
Results: Licensed production companies and pharmacies are key for-profit organisations involved in the recreational cannabis market in Uruguay. With prices, products, and market size controlled by the government, the entrepreneurial decisions of licensed producers are limited, resulting in a focus on cost reduction. The production sector is characterised by a small number of companies that operate at economies of scale, illustrating a ‘commoditised’ cannabis market model. The pharmacy-only retail framework has created new revenue for community pharmacists but may hinder the participation of small-scale legacy players. The not-for-profit Cannabis Social Club (CSC) sector has lower entry barriers and fewer requirements regarding products and prices, but only a few key individuals may benefit financially due to the sector non-profit regulation. Estimates of annual revenues in the licensed production (4–4.8 million USD), pharmacy point-of-sale (1.1–2.2 million USD) and CSC sectors (8–17.7 million USD) are provided.
Conclusions: Despite not being designed to pursue economic objectives, the state-controlled cannabis market in Uruguay has created commercial opportunities for several actors. Our analysis suggests that this regulation may represent a compromise from an economic and social justice perspective.
Description
Keywords
cannabis industry, legalisation, government monopoly, cannabis retail, non-profit, market
Citation
Rychert M, Pardal M, Queirolo R. (2025). Market Revenues and Economic Opportunities in the Legal Cannabis Market in Uruguay. Journal of Illicit Economies and Development. 7. 2. (pp. 25-38).