Latin America Legislation and Policy

Mexico Stutter Steps Toward Full Legalization

Mexico’s Supreme Court has become the champion of cannabis legalization. In 2018, they declared the prohibition of cannabis unconstitutional and tasked the country’s legislative body with regulating the industry. That seemed like a huge step forward, but following years of delays and then a “disobedience” by the Congress this past spring, all of that seemed to be in limbo. However, on June 28 the Supreme Court decided again, but not just to declare the prohibition of cannabis unconstitutional, but the actual statutes within Mexico’s General Health Law to be unconstitutional. This will allow adults to grow and consume cannabis legally with a permit. It does not create an apparatus for a cannabis market.

The article below does not entirely reflect the most recent news, but provides some information on what full legalization in Mexico will require, and reflects the thoughts of some activists and business people prior to the June 28 Supreme Court decision.

It’s a waiting game. The rules for recreational cannabis legalization seemed like a done deal in Mexico, but that vanished. After much argument, Mexico’s lower house of Congress, the Chamber of Deputies, reworked the bill they first received from the Senate late last year and then returned it to the Senate in March. Unfortunately, it was a Frankenstein bill the Senate disliked, and so the April 30 deadline passed with no action.

Add to that the national elections looming on June 6. No legislators wanted to risk looking like the ones who legalized drugs, though that was not in question. Recreational cannabis in Mexico will happen, though it’s unclear how, when, or what shape the laws will take.

For Zara Snapp, the head of Instituto RIA, a nonprofit that works for drug policy reform in Mexico, it’s exasperating, “we’re tired of waiting. They’ve already asked for three extensions. We’re in legislative limbo.” [See timeline below] A child of both Mexico and the United States, Snapp saw the effects of the Drug War in both countries and made it her aim to transform Mexico’s drug policy.

Snapp is from Veracruz, a state on the Gulf Coast, an area shaken by grisly drug violence. That reality also inspired her to push for a social equity component of cannabis legislation, especially for indigenous communities and small producers or those most affected by the Drug War. She advocated that 100 percent of cultivation licenses go exclusively to these communities — for the first five years of the law. She knows it’s a tall ask.

“In the end, we should start implementing the laws and not worry about having the perfect bill. We need to show results,” Snapp says. Among reducing violence, those results could include creating jobs and generating taxes. She also hopes they create a model for the world to follow. “This is Mexico. Anything is possible,” Snapp says.

Others are looking abroad for more inspiration. Aldo Rodriguez, a lawyer, aims to empower business people waiting to kickstart the market. Rodriguez is the CEO and director of Lawgic, a Mexican law firm supporting businesses with intellectual property rights. The firm also has a cannabis branch, which helps businesses with the legal questions about running a cannabis business in Mexico. Rodriguez has gained a first-hand perspective from his work for Cascadia, a Canadian cannabis company. It also taught him some patience.

Rodriguez senses a restlessness in Mexico, especially among entrepreneurs. He understands but offers his perspective “If we are patient, and we see how this industry has developed everywhere else, we’ll see that the medical cannabis component comes first. Perhaps not this year or next, but we might have a large medical cannabis industry in a few years. And then we’ll see greater acceptance of cannabis for recreational purposes.”

It should be worth the wait. With a population of about 128 million, Mexico could potentially be the largest legal cannabis market in the world.

 

TIMELINE

Mexican Cannabis Legalization Timeline since 2017

2017: Medical cannabis is legalized. It must have under 1% THC for medical use. Permits are issued to sell products, though exact rules and paperwork for medical use are never created for patients or doctors. The government rescinds permits for the sale of medical cannabis products. Some companies sue and retain their permits.

2018: The Supreme Court rules that cannabis prohibition is unconstitutional. The Mexican Congress must create laws to bring cannabis into the mainstream. Cannabis must be regulated within 90 days.

2019: Congress requests extensions and sets a deadline to regulate cannabis for October 23. The final draft of the bill was unveiled on October 18.

2020: The coronavirus pandemic delays legislation. On November 19, the Senate passed a bill legalizing recreational cannabis for adults and sent it to the lower house, the Chamber of Deputies, which in turn requested an extension until April 30, 2021.

2021: The Chamber of Deputies takes the bill passed by the Senate, modifies it, and sends it back to the Senate on March 10. The Senate does not act on the bill nor requests an extension, therefore committing a “disobedience” of the Supreme Court. Congress does not meet the April 30 deadline.

 

This sets up several scenarios:

  1. The Supreme Court can modify or eliminate the articles within the General Health Law to allow for cannabis cultivation. After that, the court can issue “a General Declaration of Unconstitutionality.” If eight of the 11 judges vote in favor of those changes, adults could grow cannabis for personal use. They would first have to get a permit from COFEPRIS, the Federal Commission for Protection Against Health Risks. This move does not create a regulatory structure for businesses.
  2. The Senate could call for an extraordinary session during the summer and include recreational cannabis legalization on the agenda. They could create a new bill closer to the one they first drafted late last year. If the Senate approves this legislation, it goes back to the Chamber of Deputies.
  3. Both chambers of Congress take up the bills again during the ordinary session in September and work on a new bill then.
  4. Congress ignores the Supreme Court and never creates cannabis laws. Mexican citizens would have to bring lawsuits against Congress for ignoring the mandate from the Supreme Court.

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Juan Carlos Hernandez

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