June 21, 2012 12:29PM

Uruguay Aims to Legalize Marijuana: The Good, The Bad and The Ugly

The good: José Mujica, Uruguay’s president, announced that he will send a bill to Congress to legalize the production and sale of marijuana. Consumption was already decriminalized in the South American nation. If the bill is approved, and it seems to have enough support in Congress to pass, Uruguay would become the first country to fully legalize marijuana.

The bad: The bill stipulates that the government will be in charge of the production and sale of marijuana. Even though having a marijuana state‐​owned monopoly is better than prohibition, it would be far better to have the private sector run the business under an appropriate tax and regulatory regime. Governments should not be involved in the drug business.

The ugly: Marijuana users who want to legally purchase the drug would have to register with the government. Moreover, they would be limited in the number of cigarettes they can buy per month. However, there are good reasons to believe that not many people will rush to a government agency to register as a marijuana user. And imposing a limit on the amount of joints that a person can buy legally just means that any extra consumption will by provided by illegal sources. Thus, I doubt that in practice the bill will be very effective at achieving its goals of getting rid of the black market and fighting street crime.