The Only Country Where Marijuana is Legal

April 11. 2018. 6 mins read
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Marijuana as an investment theme continues to gain momentum as people increasingly view the magical herb as less about “drugs are bad, m’kay” and more about a plant that can be grown at scale and marketed in any number of ways to a prime demographic at varying price points, some with very high margins. Then there are other benefits like tax revenues that can be used for improving infrastructure, a reduction in victim-less crimes, and a better selection of options for cannabis smokers. For those of you watching on the sidelines, it may seem like marijuana is now being legalized across the entire globe but that’s far from the truth. Turns out there’s only one country in the world where marijuana is completely legal – from production to distribution – and it’s not “Amsterdam”.

It’s a country with the longest national anthem in the world at 5 whole minutes, and the people who claim that anthem as their own are actually outnumbered by their cows, four to one. With one of the highest literacy rates in the world at 98.5%, this country has free and compulsory education where every child has been given a free laptop and Wi-Fi since 2009. Between 2010 and 2015, the president of this country was called “the poorest president in the world” as he donated 90% of his income to charity with his biggest asset being an $1,800 blue Volkswagen Beetle:

Yes, the country we’re talking is Uruguay, and the man you see in the above picture on the left, José Mujica, is responsible for making Uruguay the only country in the world where marijuana is legal. That event took place on December 20th, 2013 when this bill was passed which legalized recreational cannabis making Uruguay the only country in the world to fully legalize marijuana – from production to distribution to smoking it anywhere you can smoke cigarettes. The following year they also made it legal for citizens to grow marijuana and purchase it in cannabis clubs. As of last year, Uruguay citizens can even buy marijuana in pharmacies.

Now you might have come across this article because you wanted to travel somewhere to get high for your holiday, in which case you think Uruguay might be that place. Save your airfare and instead go to another Spanish speaking country called Spain and visit Barcelona. It’s a whole lot easier than getting high in Uruguay. That’s because in order to enjoy marijuana in the world’s only country where it’s legal, you’ll need to be a resident. The only loophole is having someone give you some as a gift, so you’ll need to start making some friends as soon as you land.

Since we always have a healthy stash of cannabis on hand to keep our MBAs blissfully unaware of their below-market compensation, we’re not interested in smoking a bowl of Bodega Bubblegum with some Uruguayans but instead, we want to know if there is money to be made here. As it turns out, there is at least one opportunity for retail investors to get some exposure to marijuana in Uruguay.

About ICC Labs

With a market cap of around $127 million, ICC Labs Inc. (ICC.V) is a company that trades on a Canadian stock exchange called the “TSX Venture Exchange”. Our story starts in October of 2015 when two companies were given licenses to grow 2 tons a year of recreational marijuana – Simbiosys and Icc International Cannabis Corporation (now known as ICC Labs Inc.). On July 19, 2017, the company began non-medical cannabis sales by distributing their products via an approved pharmacy distribution network in Uruguay. Fast forward to a March 7th, 2018 news release by ICC Labs and we can see just how much has been sold:

Since July 19, 2017, ICC Labs has sold 66,512 packages of recreational cannabis consisting of five grams per package through licensed pharmacies approved by the Ministry of Health and IRCCA. To date, the Company has produced more than 1,000 kilograms of recreational cannabis for the Uruguayan domestic market.

So that means they’ve sold 332,560 grams which works out to $299,304 in revenues at the government dictated price of 90 cents a gram. If they have produced 1,000 kilos so far, then that means that they should have about 667,400 grams of inventory waiting to be sold not to mention over 24,000 plants that are being grown right now:

A flowering room in ICC labs

If we do some back-of-the-napkin calculations, the numbers don’t really sound all that great. ICC is licensed to produce two tons of recreational cannabis (they’ve applied now to raise that to five). That’s 1,814,370 grams of recreational marijuana that they will receive at least 90 cents a gram for. That’s only $1,632,933 in yearly revenues and we haven’t even considered how much it will cost to produce all this marijuana. Even if we take into account that the government raised the sale price by 6.5% in January of this year, we’re still only talking about $4.35 million in yearly revenues from selling recreational cannabis to Uruguayan pharmacies that looks like this:

Source: ICC Labs

That’s why ICC is looking at the export market.

In February of this year, ICC “applied to the Government of Uruguay for approval to commence the assembly of a 1 million square foot greenhouse on government land” which they anticipate will have “an annual yield of 120 million grams of dry flower” for export to “various countries including Germany, Canada, and Australia“. At 90 cents a gram, that’s over $100 million in yearly revenues, but that’s not what this weed is being used for. ICC has a license to sell low-THC extracts called cannabinoids (CBDs) which don’t get you high but can be used for medical applications. The same press release goes on to say:

ICC Labs expects to commence the assembly of the new greenhouse as soon as it receives regulatory approval which is anticipated in May 2018. The assembly of the greenhouse is then expected to take approximately eight months.

It makes sense that the only country in the world where marijuana is legal would be growing a isht load of it for export. ICC must be pretty confident that they’ll be getting approval since they’re already pre-selling CBDs in Brazil, Canada, and Mexico.

When it comes to competition, there are other companies that are licensed to grow low-THC marijuana that can produce CBDs. One of these is Inverell, which recently had 80% of their shares acquired by Cannabis Wheaton. We also see that the previous CEO of ICC Labs left the company in June of 2017, shortly before they began selling recreational cannabis. He’s since popped back up at Organigram Holdings as “the President of its new international division”. As for the new CEO of ICC Labs, he told Bloomberg last year that ICC Labs wants to “become a pharmaceutical company” which also helps to explain the company’s name change. That same article goes on to talk about a $10 million CBD extraction laboratory that will be completed this month, and how it will contribute to future revenues:

ICC should breakeven or even turn a profit in fiscal year 2019 on sales of about $80 million, said Antalich, who expects the CBD extraction business to generate about 85 percent of revenue that year. In its marijuana business, ICC plans to produce 5 tons next year and as much as 10 tons in 2019 with any surplus pot sent to the extraction laboratory to be processed for medicinal purposes, he said.

Turns out that the big story for ICC Labs isn’t recreational marijuana at all, but the production of CBDs in their new greenhouse that’s pending approval. As we said earlier, an approval decision is expected next month and if successful, will be completed by January of 2019 in time for the company to realize the $80 million in revenues they expect that year. It’s also worth noting that as of February 2018, ICC has licenses to grow both THC and CBD marijuana in Colombia. According to ICC, that makes them “the first public Canadian company fully licensed for the production and distribution of cannabis in both Latin American countries that allow it“.


As we’ve said before, any investor who is starting out needs to avoid marijuana stocks in favor of “safe” investment strategies that focus on diversification and dollar-cost-averaging. The easiest way to invest is to plunk down some coin every month into a robo-advisor like Betterment or for the more ambitious, get into dividend growth investing as we have and watch your yearly income grow without having to suck up to any MDs.


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