Mexican lawmakers were just months away from opening up the largest cannabis sector in the world, but after missing the 30 April deadline, the country will have to “start from scratch” in its reform of cannabis legislation.
In 2018, the Mexican Supreme Court ruled the country’s ban on consuming cannabis unconstitutional. Since then, the county’s lawmakers have been considering the legalisation of the drug.
With orders from the court to make reforms to existing policies, the Mexican senate and congress began to set plans in motion to amend the cannabis policy.
The original deadline for the legalisation of cannabis was set for October 2019, but lawmakers have requested a number of extensions over the past three years.
In March this year, Mexico’s Chamber of Deputies, the lower house of congress, finally approved a bill to allow the production of cannabis for industrial, medical and recreational use. The bill was then passed over to the Mexican Senate for approval.
All eyes were on the South American country as it appeared that Mexico was just months away from becoming one of the world’s largest cannabis markets.
If approved, the bill would allow adults to grow a small number of plants and carry up to 28 grams of cannabis flower. The revised legislation would also allow companies to apply for licences to cultivate, produce and manufacture cannabis-based products.
However, after months of deliberation, Mexican lawmakers have now missed the Supreme Court’s 30 April deadline to end cannabis prohibition and have not requested a further extension.
Although presidential elections take place every six years in Mexico, local elections for the country’s congress, senate and lower house occur once every three years. With the next election due to take place in June, lawmakers are now considering a special legislative measure later in the year.
“At the beginning of March, there was a big buzz about Mexico approving a full legal bill,” said Felipe Sanchez, vice president for Latin America at SōRSE Technology – a US company that produces water-soluble emulsion technology for the cannabis sector.
“There was a lot of hope, and speaking with people in Mexico, everybody was pretty assured that it was going to be approved,” he added.
“But we will have to start from scratch in July with a new set of people in the senate and lower house. They will start the discussion again because the other guys didn’t finish the job.”
If the bill was approved, Mexico would have joined one of very few countries in the world that permit recreational cannabis. But, despite the anticipated liberalisation of cannabis laws, the bill also proposed a number of restrictions that may have created hurdles for the emerging sector.
For example, the importation and exportation of psychoactive THC would not be permitted, along with online sales and telesales. The promotion of cannabis products would also have been against the law if the bill was passed.
“It’s good that the country wants to make sure that it doesn’t get out of their control, but on the other hand, it [would] be challenging for companies to market their products,” Sanchez said.
“However, it would be better to have that law than nothing, because right now, in Mexico you cannot do anything [outside of] medicinal cannabis.”
Sanchez believes that when Mexico does finally legalise cannabis, it should learn from the mistakes and experiences of other countries in Latin America that have legalised the drug – Uruguay and Colombia.
The latter approved a bill to legalise cannabis in 2013 and by 2015 had invested millions of dollars to establish Colombia as a leader in the global sector.
But according to Sanchez, complex regulations and restrictions led to confusion amongst cannabis companies.
Last year, Colombia exported less than $6 million worth of cannabis to the rest of the world, far less than its potential.
“That’s not an industry, and that is what I believe could happen to Mexico if we don’t learn from previous experiences and make things too complicated for small companies,” said Sanchez.
“You are then in a situation where people feel they might as well carry on with illegal activities which are a lot faster and have better margins than trying to be legal and comply with a lot of restrictions that will just make them not viable.”
Despite its illegality, cannabis is grown across Mexico where illicit cultivators benefit from the country’s suitable climate for growing the plant. According to Sanchez, the country has the potential to produce several harvests per year.
Although this would come with opportunities to yield taxes and create new jobs for the country, many are concerned about what legalisation would mean for illegal cannabis farms dotted across the country.
“The primary concern that I see is about small companies and communities where cannabis has been growing for years illegally. What the law needs to take into account – and tries to – is legitimatising these crops and converting them from an illegal to a legal world.
“That is something that has to be thoroughly thought through; you want to hopefully convert illegal growers into potential legal businesspeople.”
Although investors and entrepreneurs may be disheartened by Mexico’s failure to meet the deadline, many of the country’s citizens will be happy to see recreational cannabis remain illegal. One recent poll, for example, found that two-thirds of people disapprove of cannabis legalisation.
“There is still a high percentage of Mexicans that have, unfortunately, stigmatised cannabis. In my view, there is a big lack of information, a lack of communication and there is still stigmatisation of the plant that we need to work on,” Sanchez said.
“Unfortunately many people think that legalising cannabis would mean marijuana would be on every corner, but as business people, that’s not what we are aiming for.
“Activists who have been fighting for this law come across as people who just want to be stoned every day, and that’s unfortunate because this could be a great industry and the country could grow because of it.”
Mexico is a country marred by drug wars that have, according to the Council of Foreign Relation, taken an estimated 150,000 lives. Legalising cannabis is not going to eliminate organised crime in Mexico, however Sanchez argues that it could reduce it.
“There is no doubt in my mind and many people’s in the industry, that we see this as an opportunity to reduce or eliminate part of the organised crime that is related to this product,” Sanchez said.
“We know there are other substances and there are other organised crime activities; this is not the only one. If we legalise cannabis, organised crime will not stop; that is not the case. But, it will certainly take cannabis away from organised crime and it will be an opportunity for Mexico.”
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