Last week, the Mexican Chamber of Deputies approved new legislation that would legalize recreational cannabis. The amended legislation has been sent back to the Senate and the market is highly focused on how the bill advances from here.
The Chamber of Deputies made revisions to the legislation that was passed by the Senate and we will monitor how the changes are received by the Senate. Some of the revisions to the legislation include changes to the regulatory structure, the rules for the commercial market and licensing policies, and more.
One of the most notable changes is that the amended legislation would not establish an independent regulatory body to oversee the licensing and implementation of the program. The amended legislation would give that authority to an existing agency, the National Commission Against Addictions, and we expect this change to be scrutinized by the Senate.
Included in the amended legislation is a licensing category for vertically integrated businesses that control all aspects of cultivation, manufacturing and sales. The updated bill includes language that could prevent a few companies from controlling the market and we are favorable on this.
Going forward, we are interested in how the Mexican cannabis market evolves. The market could very likely follow the path that Canada followed as it relates to the licensing process. We also would not be surprised if Mexico implemented a program that looks similar to a few states in the US. Due to the size of the US from a population standpoint, we believe the model that Mexico implements could look like a mix of both countries.
There are a number of companies that are working to gain a first mover advantage on the Mexican cannabis market and this an opportunity we are highly focused on. To stay up to date with the Mexican cannabis market, please send an email to firstname.lastname@example.org with the subject “Mexican cannabis market” to be added to our distribution.
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