Earlier this month, we discussed the approval of a new regulatory framework for hemp and medical cannabis by Argentina’s legislature. At the time, we focused our attention on those who, reflecting antiquated thinking on cannabis, voted against the bill. Today we finally turn to the substance of what is officially known as the Regulatory Framework for the Development of the Medical Cannabis and Industrial Hemp Industry (Marco Regulatorio para el Desarrollo de la Industria del Cannabis Medicinal y el Cáñamo Industrial). Yes, it’s a mouthful.

The new regulator

The recently passed law establishes the Regulatory Agency for the Hemp and Medical Cannabis Industry, or ARICCAME (Agencia Regulatoria de la Industria del Cáñamo y del Cannabis Medicinal), a part of the Ministry of Productive Development (Ministerio de Desarrollo Productivo). The agency “will be the competent organism to regulate, control and issue administrative licenses with respect to the use of cannabis seeds, cannabis and its derivate products.” Based in Argentina’s capital of Buenos Aires, ARICCAME is empowered to establish branch offices across Argentina.

Advising the regulator

A Federal Council for the Development of the Hemp and Medical Cannabis Industry (Consejo Federal para el Desarrollo de la Industria del Cáñamo y Cannabis Medicinal) has also been created. This council will serve as an advisory body to ARICCAME. Its composition (one representative of the national government and one for each of Argentina’s provinces) appears geared to amplify the voices of Argentina’s less populated provinces when it comes to hemp and medical cannabis policy. Among its tasks is recommending to ARICCAME of policies that encourage the “harmonious development of the industry in each region.”

Licensure and social equity

Under the new framework, ARICCAME is responsible for issuing licenses to import, export, cultivate, industrially produce, manufacture, market and acquire cannabis seeds, cannabis and its derivate products. The agency is explicitly required to establish objective criteria for applicants.

In exercising its licensure function, Argentina’s new regulator is to “have special consideration toward applications oriented to contributing to the development of regional economies and promote the activities of cooperatives and agricultural SMEs.” In addition, ARICCAME must consider “the inclusion of gender perspective and diversity” when issuing hemp and medical cannabis licenses.

Penalties

The new law establishes penalties for regulatory violations. These include the cancellation of licenses when the holder does not engage in the authorized activities.

Interestingly, the cost of a liter of diesel is set as the unit of payment for fines, with one liter equaling a single “Fixed Unit” or UF (Unidades Fijas). Fines range from 100 to 300,000 UF. At the time of publication, information from Argentina suggests the UF is equivalent to just under 1.00 USD. Presumably, the legislators are trying to avoid a situation where a devaluation of the Argentine peso defangs the effectiveness of the penalty regime.

Next up

The approval of the new framework is only the beginning. ARICCAME now needs to be built up as an actual agency. It is possible that the new agency will prioritize the promulgation of application requirements, even as it is still figuring out where the light switches at its new digs are located. However, we are not counting on that, and would not expect any meaningful pronouncements until late this year, if that.

Big picture, one thing to keep in mind is that Argentina will hold presidential elections in October 2023. This may not be much of a factor in how ARICCAME proceeds, but it could be important in terms of overall policy direction.

Argentina’s New Hemp and Medical Cannabis Regulator on Harris Bricken Sliwoski LLP.