In this first post in a multi-part series, we will debunk the various false ideas, impressions, and rumors that we continue to hear in the Mexican cannabis practice. As the legalization process approaches, we feel it is important to give local and overseas readers a clear understanding of what is really going on with the introduction of cannabis legalization in Mexico. Below are some of the biggest things people are doing wrong right now.
1. I will be able to do anything as soon as it is legal.
Although cannabis is completely legal after the cannabis law and medical regulations are published, that doesn’t mean you can apply for licenses right away. In relation to adult and industrial use, the institute must first be set up and fully operational. A full 90 days after that, you can apply for a research license while waiting 6 months for licenses for non-psychoactive cannabis activities and 18 months for permits and licenses for adult use. Finally, you cannot apply for cultivation licenses until the testing and traceability guidelines are published. For medical use, regulations are expected to include a 90-day window of time after they come into effect for anything related to the classification, qualification, or planting of seeds to allow the Department of Agriculture and relevant authorities to establish the procedures for licenses and apply for and receive permits. Still, it’s never too early to get started! And savvy operators started just that.
2. The cannabis law regulates everything.
Just not true. The Cannabis Act will only deal with adult and industrial (hemp) use and research for these purposes, while the medical regulations, as the name suggests, will govern medicinal use and research for medicinal purposes. In addition to 1) amendments to the General Health Act and federal criminal law as well as 2) guidelines / internal regulations (or changes thereof) by the various authorities concerned, both laws cover the entire framework of the “legalization of cannabis” here in Mexico.
3. Mexico only legalizes marijuana.
This statement is terribly simple as it suggests that legalization is all about allowing people to own and use smoked herb in public. With notable exceptions, much of the activism in Mexico has to do with recreational use when in fact it is everything from hemp to food, medicinal products, research, and the right conditions for adult cannabis use.
In addition, the Cannabis Act provides for the creation of cannabis guidelines, with the Cannabis Institute being responsible for monitoring implementation. Legalization will have ramifications that range from corporate structuring (there are still notaries willing to start businesses with a cannabis company) to the brands they can acquire. In summary, we believe that after decades of prohibition, legalization will bring about a major change in the Mexican legal system.
4. The market is only open to Mexicans, not foreigners.
Is not it! While cannabis licenses are only open to Mexican companies, it is expected that foreigners will at least be able to enter the market by either starting a Mexican company or acquiring an interest in an existing business with a cannabis business – subject to those set out in the Foreign Investment Act Restrictions (up to 49% participation). Many of our customers seeking access to the Mexican cannabis room are not Mexican nationals.
5. Cannabis is only suitable for recreational and medicinal use.
As everyone in the industry knows, there is low-THC cannabis (commonly known as hemp and defined in Mexico as 1% THC or less) and THC-rich cannabis (known as marijuana). The latter has caused a lot of controversy due to its psychoactive properties. However, hemp is a variant / genre with wide uses and uses, from a medicinal plant (yes! It can clean heavily polluted floors) to a substitute for fossil fuels, building materials, plastics, etc. Indeed, as we did As mentioned in this blog, we believe that hemp can do a very good job of restarting the Mexican economy in a sustainable way. Unfortunately, so far in Mexico we have noticed that hemp has been neglected by the business community, activists and media alike. This neglect has also led to easier regulation and thus more room for maneuver when founding a company.
In our following posts, we will continue to expose misunderstandings that range from understandable to downright outrageous. After all, informed investors and businesses make better decisions, and customers who make informed decisions make better use of our services. Contact us at [email protected] to find out more!
* Editor’s note: We plan to republish this post in Spanish over the weekend. Until then, read the following blog posts about cannabis in Mexico.