Mexico’s Cannabis Legalization D-Day is Quickly Approaching (What Does it Mean for Global Markets?)
On October 23rd this year, the “90-day time frame” established by the Mexican Supreme Court would come to a conclusion. For those unfamiliar with this story, the Mexican Supreme Court ordered government officials to make the rules on the legal cannabis in Mexico, which should take no longer than 90 days to conclude. That day is October 23rd.
While many thought that this would mean that Mexico would have legal cannabis laws on the books, there is a catch. Currently, there are 10 bills floating around in Congress and while there is a lot of support, politicians don’t have to have the “entire plan” developed by October 23.
In fact, they could technically vote on only a singular bill that establishes “some rules”, removing the pressure from the Supreme Court, while still giving themselves time to elaborate the laws. Nonetheless, there is one Bill in particular that stands a good chance of winning, which would provide some guidance to how the potential Mexican cannabis market will look like.
The Bill that Might Pass
One of the bills is from the Morena Party, the current ruling party in Mexico. The reason this stands a good chance of going through is that they hold most of the power. The Bill essentially states that it’s legal to buy, own, smoke, grow and so forth, but you’d have to request permission from the Health Department in Mexico.
This bill does include the right to sell as well, however, the rules on how that would work are not written in the bill. Essentially the Bill makes it law, but it doesn’t provide the avenues on how it could be achieved. This could take years to complete as well.
Most Probably Next Year
While one bill will definitely pass this year, establishing the legal right to consume, grow, buy and sell, the rules of engagement and the industry will probably only start budding next year. Some analysts believe that within the first two quarters of 2020, Mexico could be the third country in the world to legalize cannabis nationally.
With foreign investors already eyeballing the market, Mexico’s current cannabis market is estimated to be a $ 2 billion dollar market. However, considering that Mexico is one of the best-situated countries for the “American Cannabis Trade”, literally acting as gatekeepers between North and Central & South America. If any cannabis product (in the future) is transported by land from South to North or North to South, it will pass through Mexico.
Some major Canadian companies are realizing that the US might take longer to jump into the game, and will be looking towards Mexico to expand their efforts – International Cannabis Trade.
Why Mexico is such Fertile Cannabis Ground
I’m not talking in the literal sense, which it totally is. Mexico has some very fertile earth. Rather, “fertile” in this sense relates to the industry. Mexico has very cheap labor and cheap land costs. For the same cost of a Canadian grow operation, you’d be able to sustain five in Mexico. Furthermore, Mexico is a very large country compared to Colombia or Jamaica.
The sheer wealth of production you can get for very cheap makes Mexico an ideal place to grow base materials such as Cannabis and Hemp. Of course, the current standards of Mexican cannabis cultivation isn’t remotely in the same level as that of the US and Canada, however, with foreign investment, this is poised to change.
Additionally, over the past few years, we have seen an increased interest from Mexicans themselves in getting involved in the Market. In Mexico City, you can virtually buy any product you can in any LA dispensary, usually for much cheaper. With events like EXPO WEED increasing in attendance every year, we can see that from there is a lot of support for cannabis.
What will Mexico Mean for the World?
Mexico has the ability to become a world producer of cannabis if they can get the infrastructure right. It is believed that Mexico will follow a hybrid Colorado-Canada style legalization, where some of the cannabis is run by the government, while others will be licensed for independent players. This will create a free market situation where one of the primary motivations will be export.
Furthermore, when it comes to hemp production and derivatives from Hemp, the current government favors agricultural initiatives, meaning that there might be a lot of elbow room for hemp cultivation in Mexico over the following years.
Obviously, we won’t know exactly how the system will look like until the politicians have discussed it and voted on it, but it seems that we’ll have the third major country legalizing weed sometime early 2020. As always, we’ll keep a pulse on what is happening to keep you in the loop.