When Uruguay starts selling state-grown marijuana next year, the stuff is going to be cheap—the government, the only entity which will be allowed to sell marijuana, plans to charge only $1 a gram. That compares to an average street price of roughly $20 in the US.
But that might not actually be cheap enough.
Drug lords in neighboring Paraguay, one of the region’s largest producers of marijuana, (pdf) and heavy contributors to South America’s budding underground drug trade, may be capable of producing and selling it for a lot less. A kilo of marijuana grown in Paraguay currently sells for $60 in the country and $300 across the border in Uruguay, according to the head of Paraguay’s National Anti-drugs Secretariat Luis Rojas. (link in Spanish) That’s $0.06 a gram and $0.30 a gram, respectively.
The prospect of a gap that significant has Paraguayan officials pretty worried. Much of Uruguay’s illegal weed is already believed to come from Paraguay—some of it through Brazil, which is believed to be the first destination for as much as 80% of all marijuana produced in Paraguay. But once the drug is legal, Uruguayan consumption presumably will go up, and cheaper illegal Paraguayan weed will compete favorably with the pricier government-sanctioned ganga. “We are more than convinced it is going to stimulate internal consumption and thus the trafficking of marijuana towards there,” Rojas said.
Paraguay has been steady in its criticism of Uruguay’s landmark marijuana legislation. Back in August, Rojas warned that legalizing the drug would do little to curb the regional drug flows into the country. “The Uruguayan market is going to receive the marijuana that it produces and they’re not going to stop receiving the marijuana produced in Paraguay,” he said at the time. It’s a scenario that Uruguay is more than likely aware of, as well as concerned about. While dirt cheap weed isn’t the end of the world, a continued presence of illegal drug flows could be challenging, especially if it means more of the drug-related violence that prompted Uruguay to push through marijuana legalization in the first place.