In this article, Hemp Benchmarks analyzes exclusively obtained data on shipments of CBD hemp flower exported from Uruguay to Switzerland. The data provides a picture of a developing international hemp industry, as well as how prices for CBD hemp flower produced in South America compare to domestic U.S. prices for analogous product.
Uruguay legalized an adult-use cannabis market in 2013, the first country in the world to do so. It has been exporting low-THC cannabis – or hemp, according to U.S. and European standards – for at least a year. A half-ton of high-CBD flower was shipped from Uruguay to Zurich, Switzerland in July 2020, a deal that was reportedly the first export of Uruguayan hemp to Europe. That event coincided with officials easing Uruguay’s export regulations for both hemp and high-THC cannabis. At the time Uruguay’s President Lacalle Pou signed two orders: encouraging the development of the medical cannabis and hemp industries, while also encouraging exports.
Those changes, in turn, made it easier to export hemp and high-THC cannabis from Uruguay, by eliminating the requirement that cannabis plants be registered first as medicine. Uruguay had already been exporting cannabis, but removing the step of having to register the plant as medicine opened up the potential of exporting hemp flower and other hemp derivatives.As a Prohibition Partners report noted in July, government officials appear intent with their “aims to propel Uruguay to the forefront of the global [cannabis] industry once again.” In an interview with Prohibition Partners, Dr. Rodolfo Perdomo Rodas, Head of Uruguay’s Foreign Trade Commission of CECAM (Chamber of Medicinal Cannabis), said new regulations are being considered that would “allow the production and registration of a huge number of edible products containing CBD as an ingredient.”
A Hemp Benchmarks review of Uruguay’s export data shows that, between June of 2020 and June of this year, 123 hemp exports of varying sizes had been filed by 14 different Uruguayan companies.
Switzerland was the destination for all of the documented exports of hemp flower, which totaled more than 12,000 kilograms over the past 12 months. Many of those Uruguayan hemp shipments came in at less than 100 kilograms and appear to have been test deliveries. For shipments in excess of 100 kilograms, prices generally declined as the cargo size increased.
According to the data, the largest export from Uruguay to Switzerland was made by Cplant, a multinational cannabis and hemp biotech company, with the company’s largest single shipment of 2,260 kilograms to Switzerland made last August. In total, Cplant has been responsible for 7,200 kilograms being shipped to Switzerland over the past 12 months, making up about 60% of Uruguay’s total exports over the past year.
Given this momentum and government support, Uruguay is expected to become a high-profile exporter of hemp in the coming years. In both the hemp and high-THC cannabis sectors, increasing numbers of businesses have shown interest in establishing production operations in areas of South and Central America, as well as Africa, where weather and other conditions are amenable to cultivating the plants and costs of production are low.
The data above suggests that American hemp farmers may be hard-pressed to compete on price with their counterparts in Uruguay. Even the most expensive prices for Uruguayan CBD hemp flower shown in the chart above are lower than Hemp Benchmarks’ assessed price for smokable CBD hemp flower in the U.S. as of August.
Earlier this year, Hemp Benchmarks reported that Swiss buyers were paying a premium for U.S.-produced smokable CBD hemp flower, relative to domestic prices. While international buyers reportedly value the quality of American-grown hemp flower, significantly lower prices for analogous product may be difficult to pass up. As production of hemp and high-THC cannabis continues to develop in Uruguay and other South American, Central American, and African countries, U.S. hemp producers who are already engaging in the international export market will find increased competition from producers abroad.