Pot of gold

Mexico attempts to legalise the entire marijuana value chain.

After Canada and Uruguay, Mexico is set to become the third country in the world to legalise the production, distribution and recreational consumption of cannabis. The global market for cannabis is estimated to grow by 300% – 400% over the next five years.

The Senate of the Republic approved the law for the regulation of cannabis on 19 November 2020 but the Chamber of Deputies postponed their decision until February 2021 to conduct further analysis. An advisor to the Chamber of Deputies anticipates further delays, “COVID-19 is making this and several other processes difficult and causing delays. It is unlikely that approval will be given before March as legislators want to revisit the analysis and make adjustments. If it is not done before the end of April then the proximity to the elections makes doing anything difficult in May. Realistically, we are targeting approval before 2022.”

“COVID-19 is making this and several other processes difficult and causing delays […] Realistically, we are targeting approval before 2022.”

Advisor to the Chamber of Deputies, Mexico

The original debate was very polarised. The main opponent was the right-wing National Action Party (PAN), as it says this law attacks the families. While politicians from the Morena party assure that the approval of the project is “a great historic moment to do justice to the peoples who lost so many human beings in the misnamed war on drugs.”

There are 200 organised criminal groups related to narcotics in Mexico and they have been responsible for over 270,000 deaths since 2006.

A senior security consultant with experience in the public and private sector does not believe the law will have any effect on the levels of violence, “The idea is that legalising cannabis will drive down the price, making it less attractive to criminal groups and reducing violence. In reality, most criminal groups have moved on from cannabis to hard drugs and more recently methamphetamine and fentanyl or even other commodities like precious wood.”

“In reality, most criminal groups have moved on from cannabis to hard drugs and more recently methamphetamine and fentanyl or even other commodities like precious wood.”

Senior security consultant, Mexico

On the current proposal, supporters of the bill expect regulation to promote vertical integration of the supply chain and the removal of barriers to distribution. A political opponent to the bill explains his point of view, “The current proposal will harm cultivating communities, because of the impossibly high standards they must meet. Increasing the cost of production for legal players opens a window of opportunity for illegal ones, plus the possibility of government corruption.”

The security consultant also does not even believe the price will fall, “The bill imposes so many barriers to production with requirements that are expensive to achieve so the cost of production will remain high and a black market will persist. As the proposal stands today, the only winners will be the industrial producers who can meet the production and marketing requirements.”

Despite the challenges above, the President of the Cannabis Industry Promoting Group (GPIC) can see local and international interest building in Mexico’s Cannabis industry, “We are already supporting more than 25 companies who are starting the paperwork to establish a local presence so they are ready when the regulation is approved. Mexico has a comparative advantage over other countries due to its location and the geography required to produce at large scale all year round.”

 

 

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