Mexico on Brink of Retaking Leadership in Cannabis Industry

The results of the recent election are in, and in October of this year, Mexico will have the first female president in its history. In addition, the elected president, Claudia Sheinbaum, will have more political power than any other leader in the modern history of our country because her party won a total of 245 seats in the incoming Chamber of Deputies, while their allied parties, PVEM and PT added another 125 deputies. These results are in addition to the Senate Chamber, where Morena, Sheinbaum’s political party, is assured over 60 seats, while her political allies have 22. These results open the door to create several policies that will be recorded in history as the first resulting from the mandate of the first female president in Mexico, and second, because the issue and review of those policies will be done by chambers dominated by an administration with a vast majority in both.

The election's impact is not limited to political power. It has the potential to catapult Mexico into a leadership position in the cannabis industry, a promise that has long been in the making. This shift could have far-reaching effects, from reducing violence associated with organized crime to fostering economic and technical development in agriculture across the country. Simultaneously, it could drive scientific and industrial progress, opening up new avenues for growth and innovation.

The doors for Mexican leadership in the cannabis industry have already been opened by other countries like the United States, which has laid the foundations to create regulations that eliminate the penalties for growing hemp and the use of this plant for medical and industrial purposes. This has led to the emergence of international companies in parallel industries such as textiles, food, and bioplastics that take advantage of this plant's fibers and derivatives to create a new range of products. Or the example of the European Union that has acknowledged some hemp derivatives as food and at the same time has acknowledged the therapeutic potential of cannabidiol, allowing its free trade and, at the same time, promoting companies that are involved in this industry to generate research protocols to guarantee its safety, besides allowing this scientific evidence to become the starting point to establish its efficacy as botanical products for medicinal purposes. 

To ensure that Mexico can fully realize its potential within the cannabis industry, it is crucial to have certain factors in place. The first and foremost is a political willingness to leverage the significant political power that Sheinbaum’s party has gained from the popular vote. This power can be harnessed to generate regulatory proposals that are not only consensual among all the actors in the cannabis industry but also science-based and in line with international regulations. This approach will promote competitiveness for Mexican companies in global markets and provide a sense of security and stability for the industry's future.

The second factor is legal interest, taking advantage of the advancements made by the Supreme Court, that in 2019 directed Congress to generate a series of regulations that help to eliminate the prohibitions surrounding cannabis usage, and in 2021, with an Unconstitutionality General Declaration toward the laws that prohibit personal growing of cannabis, and even in 2023, when the court granted protection on the grounds of law for a company to be able to grow, cultivate and harvest nonpsychoactive cannabis. All the advancements above are vital to initiate a new stage where all decisions made by several legal and regulatory entities in Mexico can be reevaluated to generate a new set of rules that provide legal certainty to all involved in the Mexican cannabis industry, and at the same time, improve those legal decisions that have been already made to ensure that there is an accurate legal framework that promotes industrial and commercial growth.

Taking into consideration these points, it is essential to evaluate the economic impact that the cannabis industry can have in Mexico. Understanding that the internal markets might be relegated to production, foreign trade of raw materials and industrialized products, as well as the distribution of non-psychoactive botanical products to meet the needs of North American markets, where at least 79% of the citizens live in a county that has at least one dispensary, in 2024, the market is expected to reach sales of over US$40 billion. This could lead to a significant boost in Mexico's export revenue and job creation. Meanwhile, the internal market is likely to go above US$2 million by the end of 2024, turning into an essential source of income for the government through taxation that has been widely forgotten. This could help alleviate some of Mexico's economic challenges.

I’m sure that all the actors within the cannabis industry want to open doors and create new links with this new administration to foster the development of the entire industry, as well as the economic and social advantages that the arrival of new regulations will bring, mainly if those regulations are based in science and standardized with global markets. The government must engage in an open and transparent dialog with industry stakeholders to ensure fair, effective, and beneficial laws for all parties involved. This collaborative approach will not only promote our country’s leadership among international markets that are already participating in the worldwide cannabis industry but also foster a more sustainable and inclusive industry.