"Uruguay being the first nation to engage in legalization and alternative drug policy could be kind of a tipping point," says Nathan Jones, a post-doctoral fellow at Rice University's James Baker Institute for Public Policy in Texas.
He says that Uruguay's move challenges "those international treaties that kind of hold the whole drug prohibition regime together."
On Wednesday, Uruguay's House of Deputies voted 96 to 50 in favour of a bill to legalize the production, commercialization and distribution of pot.
The bill still has to move through the Senate, but with a government majority in the upper house it is expected to pass at some point in the fall.
Once passed, the legislation would make the small South American country the first in the world to completely legalize marijuana.
Uruguayan President Jose Mujica has said he hopes the legislation will neutralize drug-smuggling gangs in his country, adding: "We know we are embarking on a cutting-edge experiment for the whole world."
Alternative to the war on drugs
Uruguay's move brought instant condemnation from the UN's International Narcotics Control Board, the body that monitors international drug treaties, to which Uruguay is a party.
Pope Francis also spoke out strongly against the liberalization of recreational drugs during his visit to Brazil last week. But observers say Uruguay's proposed law is part of a slow but steady liberalization in drug policy throughout the Americas, particularly in countries where incarceration levels or drug-related gang violence has been a huge problem.
Last fall, Colorado and Washington State both voted in favour of legalizing recreational marijuana use.
Another significant development was a report produced by the Organization of American States (OAS) earlier this year, says Juan Carlos Hidalgo, a Latin America policy analyst at the Cato Institute in Washington, D.C.
The OAS report proposed four alternatives to the war on drugs.
The proposals were legalization; greater cooperation between nations on security and enforcement; community-building, which would involve establishing more treatment facilities and using sport to divert idle youth from falling into the drug culture; and "disruption," in which countries take a laissez-faire approach to drug smuggling and simply focus on violent drug-related crimes.
Countries such as Uruguay, Colombia and Guatemala have argued in favour of legalization, while Brazil and Peru, for example, remain against it. But both sides agree that the current zero-tolerance strategy has not met its aims.
"At this moment, Latin America is having a very lively debate on what to do," says Hidalgo. "There is a wide consensus that the war on drugs is a failure – even defenders of the policy admit that it is not working well."
Launched in 1971 by then U.S. president Richard Nixon, the so-called war on drugs has been predicated on a heavy-handed enforcement strategy that has created dubious alliances with Latin dictators and paramilitary groups. It has also cost upwards of one trillion dollars and, critics say, accomplished very little.
Even so, the U.S. remains resistant to any alternative, says Hidalgo, a fact that was on display during the recent OAS meeting in Guatemala. Responding to the growing favour for legalization among some Central and South American leaders, including former Mexican president Vicente Fox, U.S. Secretary of State John Kerry said the challenges "defy any simple, one-shot, Band-Aid" solution.
The anti-legalization sentiment is echoed by a group of former U.S. Drug Enforcement Administration chiefs who are urging President Barack Obama to use his authority to sue Colorado and Washington to force them to repeal their legislation.
One of the arguments made about legalization is that it will put drug suppliers, like the notorious Mexican drug cartels, out of business.
That's an unlikely scenario, says Rice University's Jones.
If Mexico were to legalize pot it would have little effect on the cartels, he says, because their main objective is exporting drugs — largely cocaine and heroin – to other countries, most notably the United States.
However, Jones says most analysts believe that if marijuana were to be legalized across the hemisphere, it would cut into drug cartel profits by about 30 per cent.
The Uruguayan model
Under its legislation, Uruguay will allow its residents, 18 and over, to buy up to 40 grams of cannabis a month at licensed drug stores, or grow up to six plants at home.
Mark A. R. Kleiman, a professor of public policy at UCLA and the co-author of Legalizing Marijuana: What Everyone Needs to Know, believes the initial outcome will be mostly positive.
"The immediate consequences are likely to be decreased crime, decreased arrests, decreased illicit activity, increased state revenue -- and increased drug abuse," he says.
Kleiman says the crucial factor will be the market price for cannabis. If it's too low, he says, it might compel more people to use, and if it's too high, it may create a black market. The Uruguayan government will need to decide "whether the sales process is designed to maximize sales or protect public health," says Kleiman.
Once the Uruguayan legislation is implemented, anyone who wants to grow, sell or merely purchase marijuana will have to be included in a national registry, "which I think creates certain privacy concerns," says Hidalgo.
"I can see people being skeptical [about] registering as a drug user in a government registry," he adds.
Hidalgo hails the Uruguayan vote as a "positive step," but says broader liberalization across the Americas requires greater buy-in from the U.S.
"So far, Washington is trying to pretend this is not taking place," he says. "But sooner rather than later, they're going to have to engage in the debate."