Legal marijuana in Uruguay: example or cautionary tale?

Uruguay blazed a trail worldwide in the legalization of marijuana. Under the left-wing administration of former President José Mujica, the tiny South American nation of 3.5 million people allowed the recreational use of cannabis in 2013. Four years later, it went on to be the first nation where the sale of the drug is also legal.

The system, however, is tightly regulated — with consumers having to register with the authorities and being limited to purchasing 10 grams a week (enough for roughly 20 joints). Regulators also control the permitted levels of THC — the main psychoactive component of cannabis — which is mixed with CBD, the second-most prominent active ingredient in the drug.

With 37,000 people registered as home-growers or marijuana consumers, the local cannabis market blossomed into a USD 100-million industry, creating at least 4,000 new direct and indirect jobs. Official data claims that the illegal drugs market lost over USD 22 million since the change in legislation.

“The government wanted to dry up gangs’ main source of revenue, as marijuana sales accounted for...