Uruguay is opening its medical cannabis market for entrepreneurs through a deal with Innova Life, a Spanish agricultural company based in Malagá, worth $100,000. Innova will partner with Uruguay’s National Institute of Agricultural Research, INIA.
As the first mover in cannabis deregulation, decriminalizing all drugs in 2013, the country lagged behind other nations in setting up a robust medical cannabis scheme and continues to grapple with shortages in pharmacies.
The current setup is designed to transform Uruguay’s medical market by investing in research and development to create country-specific strains. The teams hope to develop three varieties of medical cannabis with less than 1 percent of THC.
“We here in Uruguay, what we propose together with INIA is the development of three varieties of industrial hemp for applications and medicinal uses,” Innova’s Vice President, Marcelo Cabrera, explained to EFE, a Spanish news agency.
This announcement comes after Uruguay granted additional medical cannabis licenses in February 2019 to expand medical production capabilities.
Transforming cannabis investments in Uruguay
The deal, approved for two years with the possibility of extension, is a “research, development, and innovation project,” says INIA.
Currently, Innova is waiting on final permits from Uruguay’s cannabis regulatory agency, IRCCA. They are in their final stages, both groups report.
INIA’s offices in Las Brujas, in Southern Uruguay, are the base of operations for the scheme.
Innova and INIA will each retain ownership of one of the three strains in this joint venture style project. Both entities contribute to the research process, and both receive the fruits of their labor.
After genetic development, before full-scale cultivation, INIA and Innova will register the strains with INASE, Uruguay’s seed registry.
The deal represents a significant shift in Uruguay’s cannabis market.
While other countries, specifically Colombia, are encouraging investments, innovation, and genetic research, until 2019, Uruguay only permitted two medical cannabis licensees. That number increased in early 2019 to seven but has effectively stifled much innovation until now.
“Uruguay was a global vanguard on the subject of regulating the use of medical cannabis, and today we are in a very advantageous situation with respect to genetic materials that can drive and attract foreign investors,” Repetto indicated about the future of investments in Uruguay.
Significantly, INIA and the Uruguayan government seek to empower local entrepreneurs and growers from this research project implying that once the strains are registered and full-scale production begins, the government and Innova may call on local cultivators to boost cultivation yields.
This shift in focus for Uruguayan cannabis is a boon for investors who want access to additional southern, South American markets such as Brazil.
Using genetics to boost the market
If successful, this research scheme should propel Uruguay onto the research stage and invigorate a semi-stagnant market. The goal is for Innova to help change that stagnation.
“The cannabis market is growing every day. It is a very dynamic market. Innova Life is looking to develop genetics and provide consultancies,” Cabrera said about the company’s potential contributions.
“There is a clear area from an agronomic point-of-view, which is to adapt genetics that best serve us and the cultivation conditions [in Uruguay],” the president of INIA, José Luis Repetto, indicated about the significance of the work.
Using genetics to produce strains especially adapted to grow in Uruguay could make cultivators’ jobs easier.
“INIA will focus on the evaluation and cultivars and participate in the genetic improvement and development of agronomic components, denoting a milestone in the institution which, for the first time, will contribute to the value of research in cannabis for medicinal use,” the Institute reported.
With five new companies permitted to enter the medical marijuana market, due to a six-fold increase in registered medical users since 2017, and with this new deal, Uruguay is priming the stage for new investors and further innovation in their cannabis marketplace.