Two months ago we Submitted to celebrate the passage from Mexico’s Lower Chamber of the Cannabis Law bill Delivered to it from the Mexican Senate last November. In that post, I wrote,”The Law will now come back to the Mexican Senate, in which it’s expected to be approved pretty much as written, at which time, it will go to the Executive Power for book .”
Just over a month ago the Senate ended its session not only without having approved the Law but also with dismissed the Supreme Court’s directive (relationship from 2018) to achieve that. Since then, the Court has established multiple deadlines for Congressional action, with April 30, 2021 set to be the final one.
Congress’ only obligation under the Supreme Court mandate was supposed to govern cannabis cultivation and consumption for private usage, but for quite a while, members of Congress openly stated that they would attempt to create a framework to provide for the introduction of a cannabis industry.
Unfortunately, politics intervened. In Mexico, as in most states, cannabis is a polarizing issue. Social conservatives use the problem to frighten voters (¡drogas! ) about the aims of the opposition and also to reassure them about their own credentials.
In the run-up to last Sunday’s elections, the Senate backed off from devotion on the problem, apparently preferring to shift any political blowback to the Supreme Court, which way back in 2018 said it would strike down the government’s prohibition on recreational marijuana usage if Congress did not enact reforms. A complication is that the makeup of the Supreme Court has changed slightly since its 2018 judgment, along with the issuance of a General Declaration of Unconstitutionality would require the support of eight of 11 justices.
So, where do matters stand today for cannabis companies (or start-ups) interested in the Mexico market?
The final outcome of these elections will be an important factor, of course.
For cannabis companies, this is good news; MORENA politicians and legislators were the originators of this Cannabis Law, and would be the most inclined to press for further actions toward enactment, e.g. by taking it up again during the next Senate session, scheduled to start on September 1, 2021. Victory from the opposition would likely have postponed the introduction of a legislative framework to underpin the development of a cannabis industry before the political winds have changed once more.
If it will press ahead, and should at least eight justices vote in favor, the existing legislation will be expunged from Mexican law, which would make a legal vacuum in which there is not any law related to non-medical usage of marijuana.
If the Supreme Court does meet to consider issuance of a General Declaration of Unconstitutionality, however a majority of justices doesn’t approve, customers will have to continue applying to the Federal Commission for Protection against Health Risks (in Spanish, Comisión Federal para la Protección contra Riesgos Sanitarios, or COFEPRIS) for a self-cultivation/self-consumption license and will have to continue filing amparo actions (suits in federal court that require the authorities to defend its activities ) in case of non-response or denial.
A final aspect to consider: as in the United States, Mexican state legislators have another view to their national counterparts about the cannabis issue, and I have been told that legislators in several states are drafting legislation that could pave the way for the establishment of a lawful industrial hemp industry. Again, the consequence of yesterday’s elections will be vital to the development of this narrative, but certainly this could be good news for business stakeholders and customers.
The above is an upgrade on the political situation regulating the growth of recreational cannabis and industrial hemp companies in Mexico. Soon I will post again, with my ideas for how cannabis companies and investors must react to this information.