Smooth ride expected for Mexico’s cannabis legislation, experts say

Mexico’s move to legalize medical and recreational marijuana could create a market “at least three times larger” than Colombia’s, according to industry executives and analysts, who do not expect the proposed law to see significant resistance from lawmakers.

Olga Sanchez Cordero, who will serve as interior minister in the incoming president’s cabinet, last week filed a bill – the General Law for the Regulation and Control of Cannabis – to legalize marijuana in all forms.

If approved, the law would make Mexico only the third country to legalize recreational cannabis nationwide, following the lead of Uruguay and Canada.

“This is the most important news of the moment in the cannabis industry worldwide,” Khiron CEO and co-founder Alvaro Torres said. “We don’t expect much resistance to the bill in the Congress.

“Khiron will do everything legally allowed in Mexico, including cultivation, to create jobs and development there.”

Torres predicts Mexico’s market will be at least three times larger than Colombia’s.

Former Mexican President Vicente Fox – who sits on Khiron’s board – expects the law to be approved in the first half of 2019.

“The new Mexican government has publicly announced its willingness to work fast on the cannabis recreational use approval,” he said in a statement to Marijuana Business Daily.

The bill

The proposed law looks to balance a public health approach with commercial interests, finding a middle ground between total prohibition and a free market.

To achieve these goals, the law would create a regulated market for medical, recreational and industrial cannabis that, among other things, prohibits advertising.

The Mexican Institute of Regulation and Control of Cannabis would be created to regulate and implement the law.

The Institute would:

  • Prioritize public health and harm reduction over commercial interests.
  • Regulate, monitor and evaluate the implementation of the law.
  • Draft guidelines for the granting of licenses.
  • Register home growers and cannabis clubs.
  • Determine maximum and minimum THC and CBD limits.
  • Establish quality standards.
  • Determine the type of products that will be allowed.
  • Establish the maximum number of licenses nationwide and per state.
  • Set the maximum number of retail stores a single person or company will be allowed to own.
  • Create regulations regarding retail stores, including zoning restrictions and opening hours.

Home growing would be allowed under the new regulations, with a limit of 20 plants and a maximum annual production of 480 grams. Home cultivators would be required to register.

The legislation also would allow for cannabis cooperatives with a minimum of two and a maximum of 150 members, created exclusively to produce cannabis for its members. Members would be allowed to receive 480 grams per year.

Licenses

All licenses would be granted for five years, except cultivation licenses for pharmaceutical purposes, which could be granted for 10 years.

Under certain circumstances, licenses could be renewed. Those with a criminal record involving organized crime, money laundering or “high social impact” crimes wouldn’t be allowed to obtain licenses.

Proposed licenses include:

  • Six cultivation categories (personal, scientific, therapeutic, recreational, pharmaceutical and industrial).
  • Production licenses for personal, therapeutic, pharmaceutical, recreational and industrial products.
  • Transport for commercial purposes.
  • Sales for therapeutic, pharmaceutical or industrial purposes.

Still early days

Jose Alberto Campos Vargas, a lawyer with the Mexico-based law firm Sanchez DeVanny, said the legislation is just the first step in what will likely be a long process.

“Once it is formally passed by Congress, additional provisions and amendments to existing legal provisions are required whether for recreational, medical, pharmaceutical or industrial use,” he said.

“Such provisions must be closely monitored and understood by individuals or legal entities interested in investing directly or indirectly in this new industry.”

If the bill passes, supporting regulations must be finalized – likely by the Mexican Institute of Regulation and Control of Cannabis – within 180 days.

President-elect Lopez Obrador and his cabinet take office Dec. 1.

Together with its coalition partners, Obrador’s party – the National Regeneration Movement – will control more than half the Senate and Chamber of Deputies.

The newly elected representatives and senators took office Sept. 1.

Alfredo Pascual can be reached at [email protected]

Matt Lamers can be reached at [email protected]

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2 comments on “Smooth ride expected for Mexico’s cannabis legislation, experts say
  1. Johnathan Aluitious Hempseed III on

    The U.S. will be surrounded by non-prohibition states! Does that mean there will be a new market for smugglers and ridge runners? And how will the new laws effect tourism? Will there be an influx of pot tourism?

    Reply
  2. Larry Hoffman on

    Would a Mexican approval for a medical Marijuana distribution outlet enable the opening of a similar enterprise in another country that allows the operation of medical marijuana outlets?

    Larry

    Reply

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