For decades, Uruguay has been best known for the tranquil beaches of Punta del Este and picturesque Colonia, a 17th century town on the Río de la Plata. One of South America’s smallest nations, it may soon have another claim to relative fame as home to the world’s first government-run marijuana market.

Leaders in Mexico, Colombia, and other Latin American nations wracked by cartel violence are calling for a new approach in the U.S.-led war on drugs. Uruguay President José Mujica’s solution is to not just legalize pot but turn the state into the sole supplier, replacing dealers who often engage in turf wars as they move $30 million to $40 million of the drug illegally each year, according to Uruguayan government estimates.