Uruguay, which has legalized marijuana, will also exempt pot production and sales from taxes. The move is designed to keep prices low enough to undercut black market cannabis, according to government advisers on the legalization.
“The principal objective is not tax collection. Everything has to be geared toward undercutting the black market,” Felix Abadi, a contractor who is developing Uruguay’s marijuana tax structure, told Reuters. “So we have to make sure the price is low.”
Despite global criticism, in December 2013 Uruguay became the first country in the world to make it legal to cultivate, sell, and consume marijuana. Earlier in May, authorities signed regulations accompanying the law, specifying that every Uruguayan will able to buy in licensed pharmacies up to 10 grams of pot a week for just about US$0.90 per gram.