The outlook for Uruguayan hemp: Q&A with Sergio Vazquez of Uruguay’s agriculture ministry

(Editor’s note: Sergio Vazquez will appear at the MJBizDaily Latin American Cannabis Symposium, Sept. 30-Oct. 1, in Bogota, Colombia.)

While Latin American countries generally have yet to see the formation of anything close to a real hemp market, some areas will begin to see an export stream next year.

Even in Uruguay, the first country in the world to legalize recreational marijuana more than five years ago, hemp trading remains weak.

However, there are projections for the start of exports from Uruguay next year.

To find out more about hemp cultivation, transformation and commercialization in Latin America, Hemp Industry Daily talked to Sergio Vazquez, head of the Technical Advisory Department for the Ministry of Livestock, Agriculture and Fisheries (MGAP) of Uruguay. In this role, he serves as an adviser of Agricultural Services along with evaluating and auditing of low-THC cannabis production projects in Uruguay.

Why isn’t there a “real” hemp market in Uruguay and Latin America?

Today in Uruguay there isn’t a market. What we have are sales and negotiations between individuals.

In Latin America in general of course, there isn’t a real hemp market either.

From a commercial viewpoint, the negotiations involve too little volume. They are done to test quality, safety, and industrial yields both in flower and grain.

What are some of the characteristics of the Uruguayan hemp market?

From an institutional viewpoint there aren’t any type of limitations in Uruguay for hemp products. The time periods (for licensing to grow hemp) can see delays, depending on the societal structure and where the funds are coming from. If it is just from one person, (licensing) does not take longer than 60 days. But a very complex company could take a year.

Uruguay describes hemp, known in Spanish vulgarly as ‘canamo’, as ‘non-psychoactive cannabis’ with up to 1% THC. Varieties with higher THC are ‘psychoactive’ cannabis.

At what stage of development is the Uruguayan hemp market and when could more significant export streams begin?

We project that for next year (in Uruguay), once a period of testing has been completed, the start of an exporting stream could begin. Uruguay needs an export market. The local market is too little, and it won’t absorb hardly anything.

Are there any advantages of Uruguay for hemp exports in relation to other countries?

One advantage of Uruguay when it comes to hemp is that hemp can be exported at any phase of the production chain – be it as biomass, flower, isolated CBD, medicine or as animal fodder.

Uruguay has advantages and disadvantages in relation to other countries. There are logistical advantages. The soil in Uruguay is suitable for agriculture. Roads are easy to access and this is very important for logistics.

Another advantage for the country is its reputation, which is also important in relation to certification.

We have the disadvantage that the costs for services remain high in comparison (to other Latin American countries). Energy, fuel and labor make up the bulk of the costs.

In Uruguay farmers that grow in open air can have up to two harvests per year.

What must happen for the Uruguayan hemp market to advance?

What is now missing in the current situation is technical information such as the behavior of cultivars and varieties in the region.

What we need (for the hemp market to develop in Uruguay) is more extraction capacity. We need companies that can extract the resin, which is where the CBD is.

The investment in an extraction industry is important.

Small plants are no cheaper in Uruguay than USD$150,000-$200,000. Bigger ones can cost a lot more.

How big is the Uruguayan hemp industry and how could we best measure it?

When it comes to hemp in particular production can vary, so measuring the industry in terms of (authorized) hectares may not be accurate.

In Uruguay permits have been granted to grow hemp in a total of 1,100 hectares (about 2,720 acres). However, of the total authorized, it is never executed at 100%. The reduction can be up to a half.

How is this year’s hemp production looking compared with previous years?

This year we should not have a problem of excess rain. Last year we had excess rain during November, December. Then in 2017 and 2018 there was a drought. This year we do not anticipate drops as big as last year. We are likely to remain around 1,000 hectares (about 2,500 acres). We will know for sure in the last two months of the year.

This interview has been edited for length and clarity.

Renzo Pipoli can be reached at [email protected]