In this, the first post of a multipart series, we will debunk
the various incorrect ideas, impressions and rumors we continue to
hear in the Mexico cannabis practice. As the legalization process
draws closer, we deem it important to provide
local and foreign readers with a clear understanding of what is
really going on with the roll-out of cannabis legalization in
Mexico. So without further ado, below are some of the biggest
things folks are getting wrong right now.
1. I will be able to do everything as soon as it gets
Although cannabis will be fully legal once the Cannabis Law and
the Medical Regulations are published, that does not mean that you
will be able to apply for licenses immediately. Regarding adult and
industrial use, the Institute must first be established and be
fully operational. A full 90 days after that happens, you will be
able to apply for a research license, whereas you will have to wait
6 months for licenses for activities involving non-psychoactive
cannabis and 18 months for adult use permits and licenses. Finally,
as for cultivation licenses, you may only apply for them once
testing and traceability guidelines are published. As for medical
use, for everything pertaining to seed classification,
qualification or plant growing, it is expected the regulations will
provide for a 90-day window after entrance into force, to allow the
Ministry of Agriculture and relevant agencies to set up the
procedures to apply and obtain licenses and permits. All of this
said, it is never too early to start! And savvy operators have
begun to do exactly that.
2. The Cannabis Law will regulate everything.
Simply not true. The Cannabis Law will only be concerned with
adult and industrial use (hemp) and research for those purposes,
whereas the Medical Regulations, as the name might suggest,
regulate medical use and research for medical use. Both statutes,
alongside 1) amendments to the General Health Law and the Federal
Criminal Code and 2) guidelines/internal regulations (or amendments
thereof) of the various agencies concerned, will comprise the
entire framework of “cannabis legalization” here in
3. Mexico is only legalizing marijuana.
This statement is terribly simplistic, as it seems to suggest
that legalization is only about allowing people to possess and
consume smoke weed in public. Indeed, with notable exceptions, much
of the activism in Mexico has had to do with recreational use,
while in fact it concerns itself with everything from hemp, to
edibles, to medical products, to research and of course, the
appropriate conditions for cannabis consumption for adult use.
What is more, the Cannabis Law provides for the creation of
cannabis policies, with the Cannabis Institute in charge of
monitoring implementation. Legalization will have implications
ranging from the corporate structuring (there are still Notaries
Public out there unwilling to establish companies with a cannabis
undertaking), to the trademarks they can acquire. In sum, in our
view legalization will entail a substantial change in the Mexican
legal system, after decades of prohibition.
4. The market is only open to Mexicans, not foreigners.
Not true! It is expected that although cannabis licenses will be
open to Mexican companies only, foreigners will be able to, at the
very least, enter the market by either establishing a Mexican
company or acquiring participation at an existing one with a
cannabis corporate undertaking– subject to the limitations
set forth in the Foreign Investment Law (up to 49% ownership). Many
of our clients seeking entry into the Mexican cannabis space are
not Mexican nationals.
5. Cannabis is only good for recreational and medical use.
As anyone in the industry knows, there is low-THC cannabis
(commonly known as hemp, and defined in Mexico as 1% THC or less),
and THC-rich cannabis (known as marijuana). It is the latter which
has elicited major controversy, given its psychoactive properties.
However, hemp is a variant/genre with broad uses and applications
from being a remedial plant (yes! It can clean highly polluted
soils), to being a substitute to fossil fuels, construction
materials, plastics, etc. In fact, as we have mentioned before in this blog, we
believe that hemp could very well reboot the Mexican economy in a
sustainable manner. Unfortunately, what we have noticed in Mexico
so far is that hemp has been neglected by the business community,
activists and media alike. This neglect has also led to lighter
regulation, and therefore more room to maneuver when establishing a
In our following posts we will continue debunking misconceptions
that range from understandable to outright outrageous. After all,
informed investors and companies make better decisions, and clients
making informed decisions make better use of our services. Contact
us at email@example.com to learn more!
*Editor’s Note: We also plan to republish this post in
Spanish over the weekend. Until then, check out the following blog
posts on cannabis in Mexico.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.