As the United States inches closer to legalization, yesterday Justices on Mexico’s highest court have essentially decriminalized cannabis by allowing adults to possess and cultivate small quantities of marijuana without penalty. The Justices have given lawmakers until April 30 to create legislation regulating the use of cannabis by adults. Having said that, Mexico’s House and Senate lawmakers did not agree on a plan prior to the deadline. Mexico’s Supreme Court also mandated that the Health Department begin issuing permits to members of the public who wish to either possess or grow personal use quantities of cannabis.
In 2009 the country decriminalized the possession of small amounts of cannabis (5 grams or less). On March 10th, Mexico’s Chamber of Deputies voted 316 to 129 to advance a bill that would legalize recreational cannabis use in the country. Commercial sales will remain illegal for the time being, but companies are already lining up to get into the market.
“With these actions by the Court, the United States has become an island of federal marijuana prohibition in North America,” NORML’s Deputy Director Paul Armentano said.
Companies Lined Up for Mexico
In 2018, Aurora Cannabis (NASDAQ: ACB) bought Farmacias Magistrales S.A., which at the time was Mexico’s first and only federally licensed importer to date of raw materials containing THC, gaining the necessary licenses, facilities, and permissions to import raw THC material, and manufacture, store, and distribute medical cannabis products containing over 1% THC. It established Aurora’s first-mover advantage in the country.
Vicente Fox, Khiron (OTCQX: KHRNF) Director and former President of Mexico said, “I believe Mexico will be the largest legal cannabis market in the world, and with a proven strategy for Latin America and the knowledge and track record to execute, Khiron remains at the forefront of this exciting market. Today’s vote by the Supreme Court is an important step forward on the road to full legalization in Mexico .” Khiron believes that its experience in Colombia could provide competitive advantages for its entry into Mexico’s medical cannabis market.
The Canadian parent of medical cannabis company PharmaCielo Colombia, PharmaCielo Ltd. (TSXV: PCLO) (OTCQX: PCLOF) believes it is well-positioned to become a preferred supplier in the country. In March, Henning von Koss, CEO of PharmaCielo Ltd. said, “PharmaCielo Mexico is positioned to become a preferred B2B supplier in the country, backed by PharmaCielo’s broad extract portfolio, scale and flexibility, and MINO Labs’ long track record of success in the market.” PharmaCielo Mexico was created in 2019 to bring PharmaCielo’s high-quality cannabis extracts and derivative products to the Mexican market. PharmaCielo submitted a request to initiate the Mexican GMP audit process, which the company said it expects to be complete by the end of Q2’21, depending on the Mexican Authorities’ availability. With the voting of the Bill, PharmaCielo Mexico will immediately initiate the process to obtain an import license for cannabis products in Mexico. PharmaCielo is currently producing extracts in compliance with EU-GMP guidelines.