The bill's passage pushes Mexico closer to becoming the third country in the world to legalise cannabis for industrial and recreational use after Uruguay and Canada.
Mexico’s senate approved a landmark cannabis legalisation bill on Thursday, which would legalise cannabis for industrial and recreational use nationwide.
The proposal sets a 1 percent THC limit for hemp, calls for the creation of a new government agency to regulate the cannabis market, and requires that 40 percent of cultivation licenses for the first five years of the law be granted to farmers, indigenous communities, and others impacted by the country’s century-long cannabis prohibition.
The bill passed in a landslide 82-18 vote with seven abstentions. It now requires approval by the lower legislative chamber before President Andres Manuel Lopez Obrador can sign the bill into law.
🔴 Sesión ordinaria de la Cámara de Senadores, del 19 de noviembre de 2020 https://t.co/dUmavg2NSD— Senado de México (@senadomexicano) November 19, 2020
Known to be more socially conservative, Obrador has neither publicly sponsored nor opposed the legalisation drive, while senior cabinet members of his left-of-centre Morena party have openly called for regulatory change.
If passed, it would make Mexico the third country in the world after Uruguay in 2013 and Canada in 2018 to do so and pave the way for the creation of a lucrative legal cannabis market.
According to the text of the bill, it aims to “improve living conditions” and “contribute to the reduction of crime linked to drug trafficking”.
The bill, which is still subject to amendment, would prohibit advertising and smoking marijuana in public.
Legislation would allow users to carry up to 28 grams and grow up to six plants at home with a permit. Sales to adults in authorised businesses would be permitted as long as the product adheres to the maximum level of psychoactive ingredients.
Children would be prohibited from using the substance or any involvement in its cultivation and sales, and driving while high would be illegal.
Lawmakers are now working under a December 15 deadline to pass the legislation, which the Supreme Court called for after finding prohibiting cannabis use to be unconstitutional in 2018, just one year after lawmakers legalised it for medicinal purposes.
The exclusion of medical cannabis from the current bill’s scope suggests secondary rules will be needed to regulate the 2017 law amendments, which were never properly implemented.
A budding industry?
For Mexico, a country plagued by organised crime where the rule of law is weak and much of the economy is undocumented, such radical change carries its own set of risks.
However, the aftershocks might be less severe compared to a couple decades ago when gangs heavily relied on cannabis exports to North American markets. Now that many US states have legalised cannabis and purchase it for recreational use, there is less demand for illegal Mexican imports.
Mexico has had a more unusual path towards legalisation. In contrast to American states, where a majority of voters have endorsed reform in state referendums, legalisation in Mexico has received little popular support – with surveys suggesting just over a third of voters are in favour.
As opposed to popular pressure, Mexico’s legalisation campaign has used the courts to advance the cause through constitutional means and establishing new precedents, culminating in the 2019 decision by the Supreme Court to instruct Congress to revoke the country’s cannabis ban.
Rather than simply revoking the ban, Obrador’s Morena party, which controls both houses of Congress, has opted to establish a framework to regulate its cultivation and sale.
Perhaps the most significant aspect is that the draft law creates an export framework and opens the door to business opportunities in Latin America’s second-largest consumer market.
As a producer of cheap cannabis and cannabis-related products, Mexico could position itself to become a major legal supplier to the US and Canadian markets, which would provide a windfall in tax revenue for the Mexican government.
However, regulations such as requiring sellers to trace the product’s origin are likely to confine the market to enterprises with the finances and expertise to adhere to them, giving the edge to bigger international firms over more informal Mexican sellers.
Canada’s Canopy Growth, California-based Medical Marijuana Inc and The Green Organic Dutchman are a few of the cannabis companies to have expressed interest in a future Mexican legal market.
For business licenses, the draft law provides preference for vulnerable and marginalised communities and places limitations on foreign ownership of licensees.
Even though 40 percent of cultivation licenses will be reserved for farmers in municipalities that were subject to marijuana-eradication schemes, those growers will have to install security equipment in order to procure licenses, which could end up keeping poor farmers out.
Having said that, Mexico’s step towards legalisation continues a trend of progressive policymaking that seeks to upend restrictions around adult cannabis use to tax and regulate its consumption, while taking steps informed by their own respective cultural, societal and economic circumstances.
Canada’s legalisation for example was oriented toward a public-health outcome, and Uruguay’s move had a strong focus on public safety, public health and human rights.
Meanwhile, Mexico’s is strongly oriented around the right to “free development of personality” and social justice.