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Charles Benavidez

Charles Benavidez

Staff Writer, Safehaven.com

Charles Benavidez is a writer and editor for Safehaven.com. Charles is located in New York City and has over 5 years of experiencing covering financial…

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Mexico Moves To Legalize Recreational Marijuana

Cannabis

Mexico’s new populist government, whose president-elect Andres Manuel Lopez Obrador officially takes office on 1 December, is poised to put a new spin on the drug war, turning the country’s cannabis industry into a potential gold mine.  

The new government is on a fast-track path to legalizing cannabis for commercial, recreational and medicinal purposes, putting a new spin on the drug war as industry figures eye Canada’s burgeoning marijuana market as a major potential buyer.

On 1 November, Mexico’s Supreme Court overturned the ban on recreational use of marijuana.

Then, on 8 November, the incoming interior minister in the new government, Senator Olga Sanchez Cordero, introduced draft legislation that would regulate cannabis.

The export potential is mouth-watering, especially considering Canada’s recent legalization of recreational marijuana and the fact that it’s already struggling with supply.

“We’re going to be able to create a new industry based on new regulations, to produce cannabis for the rest of the world – our geographic situation and our labour [pool] gives us a major advantage,” the Globe and Mail quoted Guillermo Nieto, president of the National Association of Cannabis Industries, as saying Thursday.

And Nieto says there’s no question about interest, with his office already fielding a deluge of requests from potential investors and partners. Related: Markets Rally Following Mid-Term Elections

And Mexico isn’t just following Canada’s lead here, and eyeing it’s export potential—it’s also checking out is legislative playbook to see how it’s done.

But Mexico’s drug cartels make things much trickier than it’s been for Canada.

Mexico’s war on drugs has been going on for over a decade, during which time more than 230,000 people have been killed. While the government’s stance against marijuana has often been criticized for contributing to the violence, with security forces using heavy-handed tactics to crack down on cannabis producers, it remains highly uncertain whether legalization will lead to a reduction in violence.

As the Globe and Mail notes, groups involved in drug trafficking control territory where illegal marijuana is grown. 

Mexican drug cartels are major suppliers of illegal marijuana to the U.S., where there is no federal-level legalization and where cartels would still find a lucrative market. 

Attributing cannabis prohibition to crime and violence, Cordero told senators: “Today, the nation has taken the decision to change. We don’t want more deaths. It will be a major contribution to bringing peace to our beloved country.”

The bill would also any individual to grow up to 20 marijuana plants on private property and produce up to 17 ounces (480 grams) a year, though edible marijuana products would remain prohibited.

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The domestic market, too, could be quite lucrative. Estimates are that Mexico’s medical marijuana market alone is worth as much as $5 billion.

Is Mexico’s cannabis package going to make it through Congress? Potential investors and partners certainly hope so, and they’re banking on the fact that Obrador’s party enjoys a majority in both houses, and the fact that Mexico’s push to legalize medical marijuana last year won overwhelming support in Congress and Senate.

But they’ll have to be patient because the new president doesn’t take office until next month, and the general consensus is that new regulations wouldn’t be up and running for at least a year.

By Charles Benavidez for Safehaven.com

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