In this post, the first of several, we are going to break down the main misunderstandings / impressions / rumors we heard in the cannabis practice in Harris Bricken, Mexico. With the legalization process coming to an end, we feel it is extremely important to give our domestic and foreign readers a clear picture of what is really going on with cannabis in our country.
1. I will be able to do anything once they are legalized.
Although cannabis is completely legal after the cannabis law and medical regulations come into effect, that doesn’t mean you can apply for licenses once those laws come into effect. The institute has to be constituted, its organic statute, its guidelines etc. have to be published. Once this happens, you will have to wait 90 days to apply for research licenses, while you will have to wait 6 months for licenses that cover activities involving non-psychoactive cannabis, and 18 months for permits and licenses that cover adult use and psychoactive cannabis. Cultivation licenses cannot be requested until the institute issues guidelines for testing and traceability. With regard to medical use, the regulation is expected to provide for a period of 90 days from its entry into force for everything related to the classification and qualification of seeds, as well as the sowing, cultivation and harvesting. Above to give the Secretariat for Agriculture and Rural Development and its agencies time to set up and implement the procedures for applying for and obtaining the relevant permits and licenses. That said, it’s never a bad start! And that is exactly what experienced and visionary economic players have started.
2. The cannabis law regulates everything.
No, the Cannabis Act only regulates adult and industrial (hemp) use and research for these purposes. As the name suggests, the medical regulations in turn regulate activities related to medical use. Both regulators, together with the reforms of the General Health Act and Federal Criminal Law, as well as the internal guidelines / regulations that are created or changed by the relevant authorities for this purpose, together form what is colloquially called “cannabis legalization” in Mexico.
3. Mexico only legalizes marijuana.
That statement is awfully simple as it suggests that legalization is all about allowing people to smoke marijuana in public. Certainly, adult use has been the focus of much of the activism we see in Mexico, with notable exceptions. The reality is that legalization has to do with regulating everything: from hemp to research to medicinal and edible products and of course the use of adult cannabis in appropriate conditions. In addition, the Cannabis Act provides for the creation of public guidelines, the implementation of which is monitored by the Cannabis Institute. Legalization will have ramifications ranging from creating corporate structures (we still come across notaries unwilling to ratify the constitution of companies whose business purpose is cannabis-related) to the brands they are allowed to register . In conclusion, our opinion is that after decades of prohibition, legalization will bring about significant changes in the Mexican legal system.
4. The Mexican market is only open to nationals, not foreigners.
Of course not! Although it is expected that the acquisition of licenses will be open to companies based in Mexico that are legally constituted in accordance with our legislation, foreigners can at least enter the Mexican market by incorporating a company in Mexico or acquiring a stake in the capital of a company The company’s purpose is cannabis. The previous options work as long as the limit provided in the Foreign Investment Act for these cases is respected (up to 49%). Many of our customers trying to position themselves in the national cannabis market are foreigners.
5. Cannabis is for recreational and medical use only.
As anyone in the industry knows, there is low-THC cannabis, commonly known as industrial hemp, which in Mexico contains less than 1% THC, and high-THC cannabis known as marijuana. The latter has caused a lot of controversy due to its psychoactive properties. However, industrial hemp is an extremely generous variant / genus, whose uses range from a medicinal plant (yes! It can clean heavily contaminated soil) to a substitute for fossil fuels, building materials, plastics, etc. As we mentioned on this blog, we believe industrial hemp can certainly serve to reactivate the Mexican economy of a sustainable company. Unfortunately, so far in Mexico we have noticed that hemp has been ignored by the business community as well as by activists and the media. This ignorance has helped hemp to be regulated close to zero, which gives more flexibility when starting a business in this sector.
In our next few posts, we’ll continue to debunk myths that range from understandable to downright ridiculous. Ultimately, well-informed investors and companies make better decisions, and customers who make informed decisions will make better use of our services.
To find out more, write to us at [email protected]! In the meantime, we invite you to consult the posts we have published on cannabis in Mexico.