Paraguay Debates a Regulated Transition Toward Cannabis Legalization

Paraguay is exploring a regulated transition toward the legalization of adult-use cannabis, with a legislative proposal to amend current THC limits. The initiative, driven by the Industrial Cannabis Chamber of Paraguay (CCIP), seeks to remove the current cap of 0.5% THC and establish a legal framework for the adult-use cannabis market. The proposal, currently under review by the Senate’s Commission on Combating Drug Trafficking, mirrors successful models in countries like the United States, where regulated dispensary systems have generated substantial economic benefits.

Marcelo Demp, president of the CCIP, highlighted that Paraguay already has the foundational infrastructure for this transition, with 25 authorized dispensaries operating nationwide. These dispensaries could streamline the adoption of a regulated system for cannabis varieties with higher THC levels, ensuring a controlled rollout of adult-use products.

Economic projections from the CCIP indicate the transformative potential of this initiative. Legalizing just one-third of the estimated 30,000 hectares currently used for illegal cannabis cultivation could generate significant tax revenue through an 18% Selective Consumption Tax on adult-use cannabis products. Furthermore, this shift could create thousands of formal jobs, providing a boost to the national economy.

Paraguay has already demonstrated its potential in the cannabis industry through international milestones. Recently, the country completed its first export of industrial cannabis flowers to Switzerland, utilizing the “Kuñataî” strain developed with support from the National Service for Plant and Seed Quality and Health (Senave). This achievement underscores Paraguay’s technical capabilities and potential as a key player in the global cannabis market.

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However, not all stakeholders fully support the initiative. Enrique Duarte, president of the Paraguayan Industrial Union (UIP), emphasized the need for a thorough evaluation of the proposal’s social, regulatory, and economic implications. He cited challenges faced by countries like Uruguay, Canada, and certain U.S. states, where implementing effective regulatory frameworks required overcoming significant obstacles.

The proposal aims to deliver not only economic benefits but also social improvements, such as reducing crime by formalizing the cannabis sector. By establishing a system for regulated production and industrialization, Paraguay could ensure safe and legal access to cannabis products while positioning itself as a global hub for cannabis production and trade.

El artículo en español aquí.