Retail sales of the plant are slated to begin in June 2016.
Two companies have obtained licenses from the Uruguayan government to cultivate marijuana, the country's National Drug Board said Thursday.
"Twenty-two proposals were presented ... and two licenses for production and distribution were given out," Juan Andres Roballo, head of the National Drug Board, said at a news conference.
Roballo said the move represents a "fundamental step" toward the implementation of Uruguay’s landmark 2013 law legalizing marijuana, which at the time was heavily criticized by proponents of the drugs. Since then, three states in the United States have legalized the retail sale of marijuana.
The two companies, Simbiosis and Icorp, are expected to produce up to 2 tons of marijuana a year.
Marijuana sales in licensed pharmacies across Uruguay will begin in June 2016, with the price expected to be around US$1.20 per gram. According to Augusto Vitale, the president of the Institute for the Regulation and Control of Cannabis (IRCCA), that low price was set with an eye toward undermining the black market.
The measure legalizing marijuana was passed during the administration of left-president Jose Mujica and should have come already come into effect by now. However, current-President Tabare Vazquez, though coming from the same party as Mujica, was skeptical of the policy change back when it was first debated. "Marijuana causes as much damage, or even more, than tobacco," he said in 2012. He seems to have moderated his view, however. In March, he announced he was delaying implementation of the law, with the country’s chief drug regulator saying the purpose was to ensure the program was successful.
Supporters of legalization argue that state control over the production and distribution of marijuana can be an effective strategy to regulate its use and cut profits for drug cartels. The law passed in 2013 requires users to register with the government and limits their consumption to one ounce per month.