Paraguay Eyes Billions with Cannabis Legalization, but Stakes Run Deeper

Paraguay’s Chamber of Industrial Hemp (CCIP) projects that legalizing cannabis for adult use could generate up to 22 billion dollars in tax revenue by 2030.

The proposal foresees a 22 percent tax on cannabis products sold only in licensed pharmacies and dispensaries, under strict state oversight. The country already regulates hemp with less than 0.5 percent THC, authorized since 2019.

That framework has produced more than 150 approved products, from oils and supplements to cosmetics and functional foods, distributed through over twenty licensed outlets.

Paraguay also exports hemp seeds, flowers, and CBD oils to the United States, Europe, and Asia. In January 2025, authorities confirmed the first hemp flower export to Switzerland.

The new plan would expand into high-THC cannabis, aiming for 30,000 tons of dried flowers by 2030. Officials estimate that more than 20 billion dollars in tax revenue could be collected within the first five years if production and sales meet projections.

The plan would include family farmers and indigenous communities, allowing each household to cultivate up to one hectare, with yields averaging one ton per harvest cycle.

Supporters calculate that each family could earn around 200 million guaraní per hectare annually. The push comes as Paraguay remains one of the largest cannabis producers in South America, with much of the crop flowing into illegal markets.

By creating a regulated system, the CCIP argues that the state could capture revenue now lost to smuggling, ensure consumer safety, and bring small-scale farmers into the legal economy.

The legislative path is not straightforward. In May 2025, the Senate rejected a separate bill that would have decriminalized limited home cultivation and possession.

Lawmakers remain divided between community-based proposals and a structured, state-supervised commercial model. The debate exposes the larger story: Paraguay is not just considering new tax streams.

It is weighing whether to transform a shadow industry into a legal sector that could reshape its fiscal base, empower rural producers, and reduce the influence of illegal trade.

The choice will decide whether the country’s cannabis future belongs to regulated pharmacies or the black market.