Mexico’s lower house approves landmark cannabis legalization bill

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Mexico’s Chamber of Deputies approved a bill in general to lay the legal foundation for regulated marijuana and hemp industries, but the pending law still has hurdles to overcome and it could be years before a flourishing industry emerges.

Lawmakers in Mexico’s lower house on Thursday voted largely in support of the bill, with 316 votes in favor and 129 against. There were 23 abstentions.

Next, the Senate needs to review and approve the bill’s revisions before it heads to President Andres Manuel Lopez Obrador for his signature.

After the law is enacted, Mexico will join Canada and Uruguay as the only countries to legalize an adult-use cannabis industry.

However, the scope of the industry and available business opportunities will be largely carved out by the regulations in support of the law.

Those regulations, yet to be developed, will limit opportunities in some cases and open the door to others.

“A boom of interest in this industry is already visible,” Jose Alberto Campos Vargas, an attorney with Mexico-based law firm Sanchez DeVanny, told Marijuana Business Daily.

“However, it is necessary that potential investors understand that many of the activities and related services and products surrounding the industry are still pending to be regulated and will require some time for its implementation and the actual possibility to initiate operations.”

Campos Vargas also noted that, “likewise, due to the novelty of the industry, it is very likely that federal, state and municipal authorities require some time to understand the actual challenges and requirements of the industry and issue the necessary authorizations that may be required.”

The bill approved by the lower house was stripped of a requirement to create a specialized regulatory body – called the Mexican Institute for the Regulation and Control of Cannabis – which would have been in charge of issuing regulation and giving out permits.

Instead, the National Commission Against Addictions would be the main regulatory body.

That could have unforeseen implications for businesses and investors.

The Senate approved its version of the marijuana legalization bill in November, sending it to the lower house.

Mexico’s lawmakers are racing against the clock.

They are contending with a Supreme Court-imposed spring deadline.

The court earlier ruled that the absolute prohibition of recreational marijuana was unconstitutional, setting in motion the process to establish a formal law.

The lawmakers have already missed numerous deadlines.

The current target to comply with court mandate is the third extension since the original deadline in October 2019.

Mexico has elections planned for June.