Gabriel Cavazos Villanueva

Mexican Supreme Court Declares Prohibition on Use of Cannabis Unconstitutional: Ball Back in Congress’ and Government’s Court

June 29, 2021

Supreme Court Ruling

On June 28, 2021, the Supreme Court of Mexico (Suprema Corte de Justicia de la Nación or SCJN) decided by a vote of 8 to 3 to issue the outstanding Declaratory Judgement on Unconstitutionality (Declaratoria general de inconstitucionalidad) declaring unconstitutional the prohibition on the recreational and adult use of cannabis in Mexico. This is only the second time that such a judicial mechanism has been used.

At issue are five specific articles in the General Law on Health (Ley General de Salud).

Background

The saga began over three years ago when, after a series of legal complaints from citizens that produced a critical mass of five consecutive court decisions on the same subject, the Court first declared that these articles violated the constitutional principle of the free development of personal identity. The Court subsequently informed Congress that the health law would need to be amended, agreeing to provide Congress time to make the necessary changes in an orderly way. The general political consensus has been that this was a unique opportunity to not simply delete the offending articles from the General Law on Health, but rather to design and implement a fulsome regulatory regime by means of a new cannabis law. The objective would be to create a new cannabis-related economic sector and govern not just use, but production, marketing and sale of cannabis and cannabis-derived products for adult and recreational use.

Three years on and despite three successive extensions from the Court, however, the Congress has not been able to finish this legislative work. In the face of this inability to meet an order of the judicial branch, the Supreme Court has retaken control of the process, prescribed several key elements of an authorization regime in the absence of a regulatory framework adopted by Congress, and upped the ante again for the legislative and executive branches.

In a press release describing the background and main elements of its June 28 decision, the formal text of which will be published in due course, the Court declared:

“The Court explained that with this declaratory judgement the legal obstacle is removed so that the Ministry of Health, through the competent body, authorizes activities related to the personal consumption of cannabis and THC – how to plant, cultivate, harvest, process, possess and transport –, for recreational use, respecting in this way the right to the free development of personal identity.

Furthermore, in determining the outcomes of the ruling, the Court specified that the Ministry of Health must issue those authorizations only to adults and for the personal consumption of cannabis and THC, but not for other substances. In addition, it specified that COFEPRIS [the Federal Commission for the Protection against Sanitary Risk under the auspices of the Ministry of Health] must establish guidelines and ways in which to obtain seeds, on the understanding that the authorization will not be able to include under any circumstances permission to import, sell, supply or any other act of transfer of ownership and/or distribution of such substances.

It was also indicated that, in issuing the authorizations, COFEPRIS will have to specify that the right to personally consume cannabis and THC for recreational use can under no circumstances affect third parties, so it must not be exercised in the presence of minors nor in public places where there are persons who have not been granted their authorization. In addition, it must be indicated that it is not permitted to drive vehicles or operate heavy machinery under the influence of these substances or, in general, undertake any other activity under the influence of these substances that can put at risk or harm third parties.”

What’s Next

The declaration has the effect of creating a potentially chaotic legal situation regarding cannabis in Mexico in the short term. Congress is in recess until September. There had been talk in early June about the possibility of convoking an extraordinary session of Congress following the June 6 elections to the Cámara de Diputados (the “House”), to be held as early as the end of June, but so far there has been no confirmation of any such session. There are a number of urgent pieces of unfinished legislative business. The recent elections changed the political complexion of the House so it is hard to predict how that Chamber might consider the current draft law on the recreational adult use of cannabis should it be returned there by the Senate once Congress again sits.

Assuming that there is still a broad view in Congress, the Presidency, and the government more widely that an orderly and systematic regulation of the cannabis sector is in the best interests of the country, then Congress will have to take up the recreational use cannabis bill as a priority (among many) as soon as possible, under pressure of the Supreme Court’s action and despite the lack of a political consensus about the issue. In the absence of a regulatory regime, the legal situation defaults to a kind of constitutional No-Man’s Land. This seems unsatisfactory and unrealistic as a matter of public policy.

The legal and political situation created by the Supreme Court’s Declaratory Judgement will not satisfy the cannabis advocacy community, which also expects to see measures to deal with citizens currently jailed for cannabis-related charges in a new legal environment where such prohibitions are unconstitutional. It will not satisfy the business community interested in seeing a new cannabis sector where growing, processing, marketing and sale of cannabis products is regulated in a clear way. It will not satisfy proponents of sound public policy.

The Supreme Court has forced the issue to a head.

In summary, the passage of a new cannabis law now seems even more likely than ever and, when taken together with the already regulated and existing medical use space, the time is right to explore how best to enter the cannabis market in Mexico. Monarch and Privus are here to help guide you through the process.

Full Report: Cannabis in Mexico - June 2021

Open in New Page                         Download File

Regulation of Recreational Cannabis Use in Temporary Legislative Limbo: An Update

May 7, 2021

Overview

By the close of its most recent Ordinary Session on Friday, April 30, 2021, the Mexican Congress had still not passed the new law regulating the production, marketing and sale of cannabis and its derived products for personal recreational use. The Congress, therefore, entered into a state of non-compliance with an order of the Supreme Court of the Republic to appropriately regulate legal cannabis use by April 30, creating an awkward legal situation. The April 30 deadline had followed three previous extensions of past deadlines missed by Congress.

The draft cannabis law is now orphaned in a kind of legislative limbo.

Context

The situation is the product of a marked difference in approach to the draft cannabis law between the two chambers of Congress. Last December, the Senate sent to the lower-chamber Cámara de Diputados (the “House”) its original final draft version of the legal text for consideration, approximately 80% of which was subsequently amended by the House in roughly 175 separate changes and passed on March 10, 2021. The House version that was then returned to the Senate as the originating chamber for final consideration bore little resemblance to what the Senate had approved originally, prompting an angry response from the Senate leadership. Reports suggest that the Senate had at least 16 fundamental objections to the House version. Relevant Senate committees that reviewed the House bill agreed on a very tight vote in early April to refer the bill on to the plenary of the Senate for final vote to maintain momentum in view of the Supreme Court deadline. But then progress stopped.

Claiming broad lack of consensus among Senators from different political parties regarding the House version, key leaders of the Senate, especially MORENA Senator Ricardo Monreal Ávila, President of the Senate’s Political Coordination Bureau (Junta de Coordinación Política), began around April 8 to plant the idea that they would request again a further extension from the Supreme Court until the next Ordinary Session, which begins in September 2021. A request for such an extension, however, does not appear to have been made. The poor political optics of yet again seeking an extension, which would have been the fourth in a row, could have been a consideration.

What’s Next?

On Friday, April 30, 2021, as the Court-imposed deadline passed, both Senator Monreal and Eduardo Ramírez Aguilar, the “Speaker” of the Senate and also from the MORENA party, suggested that the law on recreational use of cannabis (“fixed” by the Senate of course) should be taken up at an extraordinary session of Congress later this summer, after the national legislative elections for the Cámara de Diputados scheduled for Sunday, June 6. The Mexican political class and media pundits are widely discussing the idea of such an extraordinary session, but it is not yet a certainty in terms of timing, format and agenda. A possible timing could be at the end of June or beginning of July.

The new House that would consider the cannabis law yet again could look very different after all 500 members are either re-elected or changed, which could alter the dynamics in unpredictable ways.

Both Senators Monreal and Ramírez have declared recently that the cannabis law must “be a good law” that reflects the interests and needs of all interested parties. At the same time, they have also said that the cannabis bill should be passed, or, at minimum, returned to the House for final approval. As Ricardo Monreal summarized on April 30: “We have to move it [the bill], even if that means returning the draft to the Chamber of Deputies. I am convinced that it is important to approve this federal law that regulates the use of cannabis.”

Along with the law on recreational use of cannabis, other pieces of important legislation were not passed by the end of the congressional session. The principal challenge facing the cannabis bill is not whether it will eventually be passed, which seems almost assured after several years of legislative activity, but rather whether it will be prioritized in the face of many other political considerations and priority issues in Mexico at this time, some more controversial politically than the regulation of cannabis. The agenda of an extraordinary session of Congress, should it take place, will be charged.

Technically, there is also some debate about the constitutionality of considering draft legislation in an extraordinary session that was not passed in an ordinary session of Congress, a quirk of the Mexican Constitution that could become relevant. There is equally a view among some political commentators and other observers that the Mexican Congress finds itself in some form of contempt of court, or at least non-compliance with an order of the Supreme Court, for not having put in place the regulation of the legal recreational use of cannabis by the deadline of April 30. It is an awkward and rather confusing situation, but the likelihood of the Court pursuing sanctions of some kind is slim given that it has other priorities and is currently at the center of a political controversy concerning the extension of the term of the Chief Justice of the Court.

We will continue to watch the evolution of the situation related to the regulation of the recreational use of cannabis in Mexico. How exactly the next steps will play out is unknown at this time, but it will become clearer, and we will report again.

Regardless of this delay, the legal medical use sector in Mexico has been formally open since January 12 of this year, and there is much opportunity in that space.

The time is right to explore how best to enter the cannabis market in Mexico. Monarch and Privus are here to help guide you through the process.

Full Report: Cannabis in Mexico - May 2021

Open in New Page                         Download File

Legalization of Medical Use of Cannabis in Mexico Opens the Door to Opportunity

As anticipated, the Government of Mexico legalized and regulated the medical use of cannabis and its byproducts on January 13, 2021.

This is a key step in creating a new legal space for the use of cannabis in Mexico and sets the stage for the impending legalization of cannabis for recreational use, expected to be finalized and approved by April 30, 2021, at the latest during the upcoming session of the Mexican Congress. These regulations governing the medical use of cannabis are issued formally under the authority of the existing General Law on Health; the anticipated legalization of recreational use will be the subject of a new law.

We have been following closely the creation of a new cannabis economy in Mexico over the past several years and analyzed earlier in considerable detail the medical use regulations when they were in draft form (see our Cannabis in Mexico Report dated October 21, 2020). We have also highlighted over the past months that, in addition to being commercially valuable in its own right, the medical use sector presents an important opening to establish a presence in Mexico in advance of the larger opportunity to come in recreational use (see our Cannabis in Mexico Report dated December 17, 2020).

The final regulations on medical use of cannabis that were published officially on January 12, 2021, are effectively the same as those that had been out for public consultation last autumn as a working draft. The official text adds precision regarding some of the administrative procedures, especially related to the importation of raw materials, pharmacological derivatives, and medications into Mexico, and is the result of a final legal scrub of the text for clarity and presentation. The key substantive modifications include:

• the removal of references to prior certification of seeds by the Servicio Nacional de Inspección y Certificación de Semillas (SNICS), implying a more flexible approach to the use of different seed varieties in cultivation;
• the regulations no longer govern molecular compounds at all, implying that scientific research into this category is to be regulated elsewhere by existing and appropriate laws and regulations; and
• the final text generally reinforces further the need for defined quality control systems, phytosanitary measures, and best practices.

The regulations govern all aspects of the value chain from cultivation to point of sale for cannabis-based medications and provide a detailed explanation of the import-export regime for medical-use cannabis and its byproducts. Taken together, they provide a comprehensive roadmap for the development of and entry into this new cannabis space in Mexico.

In summary, with the passage of the medical use regulations, the time is right to enter the cannabis market in Mexico.  Monarch and Privus are here to help guide you through the process.

Full Report: Cannabis in Mexico - January 2021

Open in New Page                         Download File