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New draft legislation from the Mexican government could be the groundwork for the country to become the latest nation in the world to legalize cannabis use.
The legislation, released on Thursday (October 17), lays out the framework for Mexico’s cannabis laws, which would create the largest legal cannabis market in the world as the country is home to almost 130 million people.
The 42-page document outlines the legalization of recreational and medical cannabis use and the industrial use of hemp, potentially creating attractive new investment opportunities in the global marijuana sector.
Marijuana Moment reported the heads of the Health, Justice, Public Security and Legislative Studies Committees are to formally vote on the legislation in the next few days, after announcing earlier in October they would remain in permanent session to complete the bill ahead of a Supreme Court deadline.
With support from the Senate, the bill would legalize cannabis production, distribution and sales in the country.
Cannabis companies making moves into Mexico
Though cannabis isn’t formally legal in the country just yet, some cannabis firms have worked to develop assets in the country.
Last year, Aurora Cannabis (NYSE:ACB,TSX:ACB) made its debut into the Mexican market through a partnership with the pharmaceutical company Farmacias Magistrales, which received the first medical cannabis import license from the Federal Commission for Protection Against Health Risks — the equivalent to Health Canada when it comes to cannabis regulation.
Khiron Life Sciences (TSXV:KHRN,OTCQB:KHRNF) played a part in the creation of the draft bill after providing input on the proposed regulatory framework in a forum discussion earlier this year with the Senate of Mexico.
The Ontario-based PharmaCielo (TSXV:PCLO,OTC Pink:PHCEF) also threw its hat into the ring in January with the announcement of a joint venture with MINO Labs, another Mexican pharmaceutical company, called PharmaCielo Mexico.
The venture allows PharmaCielo to move its cannabis oil directly into the cannabis market in Mexico, which is expected to start in Q4 this year.
Draft legislation follows attempts cannabis decriminalization in Mexico
According to a translation, the bill seeks to “improve the living conditions of people living in the Mexican United States, combat the consequences of the problematic use of cannabis and reduce the crime incidence linked to drug trafficking, (while) promoting peace, (and) the security and well-being of individuals and communities.”
Some of the draft’s provisions include:
- Adults 18 years or older will be able to consume and purchase cannabis from licensed retailers and cultivate up to four marijuana plants.
- A federal body — the “Cannabis Institute” — will be established to issue cultivation licenses, set up potency limits and enforce the new laws, among other duties.
- Marijuana plants must be cultivated without the use of pesticides.
- Packaging for cannabis will be monitored and heavily restricted.
- Cannabis consumption will only be permitted in private spaces.
- Licensing priority will go first towards local farmers, low-income earners and Indigenous peoples.
The legislation follows a ruling from Mexico’s Supreme Court last year that found a ban on the recreational use of marijuana to be unconstitutional.
In a press release, the Supreme Court of Justice of the Nation said adults 18 and older have the right to engage in recreational activities without interference.
The Senate ordered the Federal Commission for Protection Against Health Risks “to authorize complainants to personally use marijuana, without allowing them to market it or use other narcotic or psychotropic drugs.”
The legislation follows the legalization of medical cannabis use in Mexico back in 2017.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Khiron Life Sciences is a client of the Investing News Network. This article is not paid-for content.
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