The federal legalization of marijuana in Mexico is on the horizon. With it comes new ground for the Mexican government and potentially significant implications for the rest of North America. Understanding what’s going on with federal legalization in Mexico will allow operators there to make the most of this emerging market.
At Higher Yields Cannabis Consulting, we like to keep a close eye on how cannabis is fairing south of the border. In fact, back in 2019, we even helped establish the framework that guides Mexico’s medical marijuana program. Now, we eagerly await the legalization of cannabis for recreational use.
Here’s what you need to know about the cannabis legalization efforts in Mexico.
Legalization of Marijuana in Mexico
Since October 2019, Mexican legislators have been working toward a bill to legalize adult-use cannabis at the federal level. On November 19, 2020, the Chamber of Senators — Mexico’s upper legislative house — voted to approve a bill legalizing recreational cannabis. All that remains for the bill to become law is a vote from the lower house, the Chamber of Deputies. Once all is said and done, President Andrés Manuel López Obrador will likely sign the bill into law sometime in the spring of 2021.
Although the bill still faces hurdles, the future looks bright for marijuana in Mexico. Since the Mexican government chose federal legalization over decriminalization, a solid and consistent framework can easily be rolled out. Rather than having a variety of different regulations and requirements in each state, as is currently the case in the United States, every operator in Mexico will know exactly what they can and cannot do.
Furthermore, federal legalization allows for additional in-country support, cooperation, and collaboration across Mexican states. In fact, this legislation could even open the door for federally-funded research into the benefits of cannabis use.
Implications for the Rest of North America
Since Canada opted to federally legalize cannabis in 2018, the success of legal marijuana in Mexico would notably leave out one major North American player: the United States. Legalization in Mexico may possibly give American legislators a fear of missing out and serve as a catalyst for passing some 420-friendly legislation of their own.
In fact, Mexican legalization may lend the historic MORE Act some momentum in the United States Senate. Unlike legislation in Mexico and Canada, the MORE Act focuses on decriminalization rather than federal legalization. In the United States, each cannabis-friendly state regulates the industry on its own. Federal legalization would shift the onus to the federal government and could potentially disrupt cannabis markets across the nation. By taking the route of decriminalization, the MORE Act would create opportunities for small businesses, research, and the expungement of cannabis-related criminal offenses.
If both the United States and Mexico join Canada, then the entire North American continent would become cannabis-friendly. Homogeneity across the continent would open the door for an international cannabis trade, giving operators the freedom to import and export products as necessary. Additionally, as cannabis markets continue to grow and improve, they may begin to put pressure on the black market. Eventually, the competition presented by these illicit markets could be eliminated altogether.
Watching Out for What’s to Come
With federal legalization on the horizon, marijuana in Mexico presents a multitude of opportunities for operators. In the beginning, demand will be high and supply will be low. If you’re one of the first cannabis businesses to get to market, then you’ll see the rewards of having an in-demand product with relatively low competition. As time goes on, though, supply will increase and demand will decrease. Get up and running as soon as possible in order to reap the rewards of the new market.
Additionally, the legalization of marijuana in Mexico brings the North American continent one step closer to being completely cannabis-friendly. Such a breakthrough may potentially allow for international cannabis trade, which would create even more opportunities for large and small operators alike.
We’ll be keeping a close eye on marijuana in Mexico over the coming months and will certainly let you know of any new developments.
Are you considering operating in Mexico’s emerging cannabis market? Contact us today for a consultation, and we’ll help you get started.