Mexico’s eventual cannabis legalization could create immense change for citizens, global market  

| Andrew Ward

Mexico’s Supreme Court-mandated passage of adult use cannabis continues to see delays. Now on its third extension, lawmakers have until April 30, 2021, to pass a bill that would legalize, among other parameters, use and possession.

The delays hindered some excitement–following a similar path New Zealand went down in 2020 when it rejected a ballot initiative on the issue. Whenever Mexico passes, it is expected to become a dominant player in the North American and global markets–possibly becoming the world’s largest. In the meantime, advocates say that the eventual passage of a bill will be a near-immediate change in the landscape for scores of communities that use and cultivate the plant. 

As Mexico awaits the mandated passage of cannabis laws, experts tell StratCann what the nation and the global market could possibly see once it comes online. 

Note: Mexico also recently published info on their medical cannabis regulations.

Significant Steps Towards Reversing Course On Mexico’s Drug War

Mexico currently allows cannabis for limited legal uses. The decriminalization of small possession passed in 2009. Nearly a decade later, in 2017, the country passed a medical bill permitting the use of products containing up to 1% THC. 

The Supreme Court provided its share of substantial reform efforts along the way. Most recently, the Court’s 2018 ruling deemed recreational cannabis prohibition unconstitutional. The 2018 determination carried immense significance, marking the fifth Supreme Court ruling of its kind. In Mexico, a fifth similar ruling by the Court sets a precedent obligating lawmakers to pass regulations to meet the decision. 

The bill passage hasn’t come about just yet, with lawmakers receiving extensions for various reasons ranging from regulatory disagreements to COVID-19. The country is still anticipated to pass its law in 2021. When Mexico opens its marketplace, some expect it to become a revenue and production leader.

Cannabis data analytics firm Headset is one of many outlets predicting that the nation becomes a global leader in time. However, the firm noted that the growth would be gradual, with first-year numbers not expected to come close to California’s 2018 sales alone. In total, Headset expects Mexico to generate US$850 million during its first year of operation. While there are potential benefits, some urge caution with the bill.  

Jorge Rubio, an external advisor for the Mexican Senate on cannabis regulations, said a bill passage would lead to the next step in the process, creating rules to make the market operational. Rubio, a representative for Mexico’s state Durango, cautioned that quick implementation of the law could create problems for both the medical and adult use supply chains. 

“The integration of the states [in] the planning process is important because they will also be an important part of the implementation, compliance and investment,” said Rubio, who added that there are substantial opportunities to integrate micro cultivators into the supply chain as well. 

Rubio doesn’t believe Mexico will become a leading cannabis market. Instead, he said it would be the “biggest experiment in the world” for legal cannabis–noting that no one knows if the bill will succeed in its goals for justice, access, economic development, transparency, health and other critical areas of concern. 

Mexico City-based public policy and social justice organization Instituto RIA Co-founder Zara Snapp tells StratCann that the law’s impact on the citizens would be immense, especially for currently illicit cultivators. Calling the eventual passage a paradigm shift, Snapp said, “It would mean the thousands of communities that currently cultivate illegally would be able to transition to a legal market.” She noted that the law won’t entice every illegal operator to the legal side, but would serve a significant purpose. 

Snapp said that “Our goal in passing this bill is that there [are] sufficient affirmative actions for communities that cultivate,” which include ensuring that resources and revenue generated in the market would be distributed evenly spread through those communities.

In addition to the community cultivators, experts predict that the passage of adult use laws will help end the ongoing drug war between the government and cartels. 

The Impact on North American Cannabis Once Mexico Legalizes

While there is a good deal of belief that Mexico could become a significant global market player, sources highlighted areas where the currently discussed bill may hinder such growth. Snapp noted that the current regulations in the discussion do not contemplate imports and exports of THC. However, she notes that Mexico’s market outlook could improve with the U.S.’s stance on cannabis. 

She added, “However, if and when the United States regulates at the federal level, I would hope that Mexico has consolidated its domestic market in order to become the main exporter of cannabis products to the United States.”

Snapp said it would be interesting to see how Mexico and Canada hash out trade negotiations once her home country passes its bill. She predicted that all three North American nations would have a federally regulated market within the next two years. 

Rubio touched on hemp’s potential to become a significant opportunity for Mexico. He noted the importance of creating local and international opportunities in the hemp space, including Mexico creating its own specific cultivars and patented products. 

“I see an opportunity to create a strong agricultural regional hemp hub with the integration of small- and medium-scale growers and other industries,” he said. Rubio also called on hemp’s inclusion in global trade pacts like the North American Free Trade Agreement (NAFTA). 

Despite the market’s opening, he anticipates CBD and THC products’ smuggling, with less of an emphasis on flower, between Mexico and the U.S. to continue for some time. 

He highlighted illegal activity in Mexico City among the Unión de Tepito and Tláhuac cartels as an example.

Next Steps for Mexican Cannabis Legalization

Despite the rounds of setbacks, both Snapp and Rubio see the bill passing before the April 30 deadline. Rubio noted that amendments are expected to occur at some point after the session’s start on February 1. He believes a refined bill could come about if amendment discussions begin in February. However, delayed talks could result in a politicization of the bill, with Mexico holding midterm elections in the summer of 2021. 

While confident of its passing, Rubio said his latest discussions with groups of deputies in Congress indicate that there isn’t a consensus on the current bill.