Here’s where cannabis legalization stands in Mexico after missing its court-imposed deadline…
Cannabis legalization in Mexico just hit a snag.
Mexico’s government missed its October 2019 court-imposed deadline to legalize cannabis, extending the deadline for legalization another six months until April 30, 2020.
The six-month extension will make it more likely for changes to the current bill to happen before it’s approved.
The drafted law, as it stands now, will be fairly restrictive and not friendly to potential public companies, likely making it even tougher to develop brands in Mexico than it is in Canada.
For example, the law as currently drafted only allows generic packaging. Some reports also indicate that the new law will restrict edibles and beverages to medical patients, though I cannot find that provision in the draft of the law I reviewed.
There will also be no legal vertical integration in Mexico – meaning that growers can’t manufacture products and manufacturers can’t run retailers.
But this is still a promising start to get some form of legalization on the books.
There are estimates that this will be an $11 billion market by 2030. Keep in mind that the entire North American market was worth about that much last year.
Cannabis Investors Stand to Profit as Market Matures
Over time, I expect the laws to get friendlier for cannabis businesses, which should line the pockets of investors with more money.
For those buying and importing cannabis from Mexico, it means they could sell make larger profits. For those with production facilities in Mexico, it means they can have a new revenue source for their business.
Of course, it’s going to take time for this market to mature and run efficiently.
Just take a look at Canada.
It is gradually allowing more stores to open, branding is improving in the country, and of course, our neighbors up north will introduce vapes, edibles, and beverages toward the end of this year.
But I expect Mexico’s laws to liberalize over time, too.
Becoming the Top Dog of Cannabis Exports
Annual cannabis sales in Mexico could reach $11 billion by 2030, according to some estimates – making it one of the quickest-emerging markets in the cannabis industry.
And some of the largest cannabis companies have taken notice.
One sector of the cannabis market is barreling towards $22 BILLION in sales. Learn how you could profit now.
Aurora Cannabis Inc. (NYSE: ACB) already secured a first-mover advantage in Mexico after acquiring Farmacias Magistrales, the first and only licensed importer and distributor of high-THC cannabis products in Mexico.
Cardiol Therapeutics (TSX: CRDL), another cannabis heavy-hitter looking to cash in on Mexico’s emerging cannabis market, already has a distribution deal in place to get its pharmaceutically manufactured CBD on the shelves.
Mexico has a few key advantages in the cannabis market that could solidify the country as one of the biggest players in the cannabis exports market.
Labor is remarkably cheap and growing conditions are perfect for low-cost outdoor farms, so this is a market I predict will explode once legalization passes.
I’ll keep you updated as Mexico’s cannabis legalization develops over the next few weeks.
Until then, I recommend you check out our recent report on legalization efforts in Latin America.
Executive Director, National Institute for Cannabis Investors
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November 06 2019