How Big? How Far? How Fast?
Regulation of the legal production, sale and use of cannabis in Mexico is advancing at a strong and steady pace. Although the precise timeline and legal framework remain to be seen, interested parties are exploring ways to participate appropriately in a market of approximately 130 million people.
Once banned and subject to stringent enforcement, cannabis and its derivatives, supported by strong science (R&D) and innovation, are rapidly becoming mainstream products across North America. In the United States, while the possession and use of cannabis remains a federal offense, two-thirds of the individual states already permit the medicinal use of cannabis while eleven have now legalized cannabis for recreational use and active consideration of such legalization is underway in others.[1] At the federal level, hemp has been removed from the Schedule I controlled substances list, making it an ordinary agricultural commodity (with regulations still being developed by USDA), allowing for rapid development of a new market in CBD-related products. Canada nationally authorized medicinal use of cannabis in 2001 and recreational use in 2018. In Mexico, the Supreme Court has ruled in favor of access for personal use, and the administration of President Andrés Manuel López Obrador (AMLO) has indicated it also favors comprehensive regulation of cannabis use and consumption as part of its strategy to address the drug trafficking issue. Legislation to legalize and regulate production and use of cannabis products in Mexico may be adopted as soon as late 2019. Furthermore, increasing commercial interest in all parts of the supply chain and ancillary products used in its production and consumption creates business opportunities worthy of exploration. This newsletter provides a review of the current legal status of cannabis and its derivatives in Mexico, including the status of licenses issued under the prior administration, and describes prospects for legislative action later this year.
We are also pleased to announce Monarch Global Strategies and Privus Capital have formed a strategic collaboration to help investors and industry participants navigate the exciting opportunities ahead. More information on this joint effort can be found at the end of this report.
[1] Cannabis is still classified as a Schedule I controlled substance by the U.S. Drug Enforcement Agency, and, as such, it remains a federal crime in the United States to grow, sell, possess, distribute and/or use cannabis, regardless of any U.S. state law that may decriminalize such activity under certain circumstances. Accordingly, there remains a conflict between federal laws that criminalize cannabis and the laws of U.S. states that have legalized cannabis. Even though federal enforcement policy may at times defer to state laws that have legalized cannabis, please be aware that compliance with state law in no way assures compliance with federal law, and there is a risk that conflicting federal laws will be enforced. Any content contained in this newsletter is not intended to provide legal advice nor to assist with the violation of any state, provincial or federal law in the United States, Canada, or Mexico.
Full Report: Cannabis in Mexico – October 2019
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