Last November, the Mexican Senate passed a recreational cannabis project, taking the first step on the road of potentially creating the biggest cannabis market in the world.
Most recently, the Chamber of Deputies passed the bill with a few changes. The amended bill was supposed to be approved quickly, but Mexican Senate President Eduardo Ramírez revealed two weeks ago there is no consensus on the changes made by the Chamber of Deputies.
While it may take longer than expected, Ramírez is enthusiastic about the bill being approved before April 20, when the Congressional season and the current Congressional term ends.
Sooner or later, cannabis legislation in Mexico seems inevitable.
What Does This Mean?
Most industry veterans agree Mexico would become the largest legal cannabis market in the world, creating boundless business opportunities, both for international and local companies. More importantly, many hope legalization would help with the country’s long-standing problems with drug cartels.
Ever since the country’s government declared a “war” on drug cartels back in 2016, more than 300, 000 people have lost their lives, and more than 60,000 have disappeared. What makes the problem almost impossible to handle is the fact that many corrupt security forces, businessmen and politicians often team up with organized crime syndicates.
But, is cannabis legalization powerful enough to help the country end the war?
Unfortunately, the answer is probably not.
While Mexico is often considered one of the biggest producers of cannabis, other illegal substances like heroin, cocaine, and methamphetamine are also big sources of revenue for crime groups. What’s more, "the cartels are transnational corporations and they're involved in all kinds of legal and illegal businesses beyond drugs," explains economist and lawyer Edgardo Buscaglia, who is familiar with the structure of the cartels.
One thing is certain, while cannabis legalization in Mexico won’t be able to completely resolve crime problems, it would definitively challenge them, and provide many economic opportunities and benefits to its law-abiding residents.
Seeking to better understand the issue and market potential, Benzinga chatted with Raúl Elizalde, CEO of HempMeds.
HempMeds is a subsidiary of Medical Marijuana Inc. MJNA - the first company to legally import and sell cannabis compounds in Mexico in 2015.
Elizalde explained there were many challenges the company had to deal with to become the first one to legally sell CBD, as “the governmental agencies were not familiar with cannabis” at the time.
“They thought all cannabis was a psychoactive drug, but now hemp has become more and more popular in the country. You can find hemp products in supermarkets, pharmacies, and health food stores. HempMeds Mexico works with regulatory agencies to make this possible,” he said.
CBD Saved His Daughter Grace
Before joining the cannabis space, Elizalde was just a caring father who chose to challenge the government, asking it to allow him to legally import CBD to help his daughter Grace.
Grace was suffering from Lennox-Gastaut syndrome, which is a very serious form of epilepsy that made her have almost 400 seizures per day.
“My wife and I were desperately trying to find a treatment that worked because all the anti-epilepsy drugs nor brain surgery helped. I heard that CBD had shown promising ability to reduce epileptic seizures so I started looking into how to get her some. In 2015, it was illegal to import CBD but I reached out to a Mexican lawmaker who publicly supported cannabis legislation, who then wrote a letter to our health secretary on behalf of our family to get permission to import cannabis oil for Grace.”
According to Elizalde, Grace responded amazingly well to the medication. Her seizures reduced from 400 to around 20, on a bad day. She was finally able to do what other children were doing, “like going to swimming lessons and having a relationship with her sisters.”
After successfully helping his own daughter, Elizalde took on a bigger mission. In 2017, Elizalde, formerly a lawyer, managed to convince Mexican lawmakers to allow the medical use of cannabis products with less than 1% of THC.
Mexico Will Get Three Regulated Markets
Elizalde is still a passionate cannabis advocate helping push the new adult-use cannabis bills to turn into law.
During a Benzinga Cannabis Insider interview, he explained that, with the new regulation, Mexico will have three completely regulated markets: medical cannabis, adult-use cannabis, and hemp.
This will be really positive, said Elizalde, explaining that, currently, all the products Mexico is getting are being imported from the U.S.. And the process is not easy.
“There seems to be some potential for Mexico’s cannabis industry to be one of the largest in the world if medicinal and recreational cannabis legislation was to be passed, as interest may come from both the U.S. and Canada. We hope that after having a regulation, the CBD market will be worth around 2 billion dollars, and, as the first company to receive permits, we hope to get at least 20% of the market.”
For Elizalde, legalization will bring countless benefits to Mexico and its residents. But he seemed particularly excited about educating physicians on the potential health and wellness benefits of CBD and cannabis products. And, opportunities for local and international projects will likely abound, he added.
“It’s a great opportunity for both local and international companies. Canada and the U.S. should look to start investing in Mexico. Progress for legalization and decriminalization is happening quicker than we ever thought it would and it will be a great opportunity for the entire international market,” he said.
During the Benzinga Cannabis Insider show, Elizalde noted that, once the market is legalized, Mexico could offer low-cost high-quality products, and sell them in the U.S.
Furthermore, he explained why it’s particularly important for Mexico to learn from other countries’ mistakes, bringing up the example of Canada, where products containing hemp-derived cannabinoids can’t be found.
With Mexico projected to become the world’s biggest cannabis market, setting up a regulatory environment could be more than challenging, he added.
On that note, Elizalde said, “We want to make sure that the opportunity to get involved is accessible and that the regulations are as clear as possible to avoid any misunderstandings. Our main priority should be to make sure that cannabis is available in the safest way to age-appropriate adults.”
In that sense, the activist celebrates the bill’s proposal to have the cannabis industry regulated by the National Commission Against Addictions, although he recognizes creating a specific government agency could also help
The National Commission Against Addictions depends on the Health Secretary, which will provide all the tools the agency will need, he explained: “Having an institution that takes care of the problem of addiction as the one helping with the regulation could be positive since the first focus should be protecting the cannabis users.”
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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