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The main myths about cannabis in Mexico: part 1

In this post, the first of several, we will tear down the main misconceptions / impressions / rumors that we have heard in the cannabis practice at Harris Bricken Mexico. As the legalization process comes to an end , we consider it highly pertinent to provide our national and foreign readers with a clear picture of what is really happening with cannabis in our country.

1. I will be able to do everything, once they legalize.

Although cannabis will be completely legal once the Cannabis Law and Medical Regulations are enacted, that does not mean that you will be able to apply for licenses as soon as such legislation comes into effect. The Institute must be constituted, issue its organic statute, guidelines, etc. Thus, once this occurs, you must wait 90 days to apply for research licenses, while you must wait 6 months for licenses that cover activity with non-psychoactive cannabis and 18 months for permits and licenses that involve adult use and psychoactive cannabis . Regarding cultivation licenses, they cannot be requested as long as the Institute does not issue testing and traceability guidelines. Regarding medical use, for everything related to the classification and qualification of seeds, as well as sowing, cultivation and harvest, the Regulation is expected to provide a period of 90 days from its entry into force. The foregoing, in order to allow time for the Ministry of Agriculture and Rural Development and its agencies to create and implement the procedures to request and obtain the relevant permits and licenses. That said, it’s never too bad to start! ANDthat is just what experienced and visionary economic agents have begun to do.

2. The Cannabis Law will regulate everything.

No, the Cannabis Law will regulate only adult and industrial use (hemp), as well as research for these purposes. For its part, and as the name suggests, the Medical Regulations will regulate activities related to medical use. Both regulatory bodies, together with the reforms to the General Health Law and the Federal Criminal Code, as well as the internal guidelines / regulations that are created or amended for this purpose by the corresponding authorities are what will constitute, as a whole, what colloquially It’s called “cannabis legalization” in Mexico.

3. Mexico is legalizing marijuana only.

This statement is terribly simplistic, as it seems to suggest that legalization is just about making it possible for people to smoke marijuana in public. Certainly, adult use has been the focus of much of the activism we observe in Mexico, with notable exceptions. The reality is that legalization has to do with regulating everything: from hemp to research, through medical and edible products and of course, the consumption of cannabis for adult use under appropriate conditions. Furthermore, the Cannabis Law provides for the creation of public policies, the implementation of which will be monitored by the Cannabis Institute. Legalization will have implications that will range from the creation of corporate structures (we still come across Notaries Public who are not willing to attest to the constitution of companies whose corporate purpose has to do with cannabis), to the brands that they will have the right to register. In summary, our opinion is that legalization will import substantial changes in the Mexican legal system, after decades of prohibition.

4. The Mexican market is only open to nationals, not foreigners.

Of course not! Although it is expected that the obtaining of licenses will be open to companies domiciled in Mexico and legally incorporated in accordance with our legislation, foreigners may enter the Mexican market, at least, by setting up a company in Mexico or acquiring participation in the capital of a company existing whose corporate purpose is cannabis. The above options will work as long as the limit contemplated in the Foreign Investment Law for these cases is respected (up to 49%). Many of our clients trying to position themselves in the national cannabis market are foreigners.

5. Cannabis is for recreational and medical use only.

As any connoisseur of the industry knows, there is low-THC cannabis, commonly known as industrial hemp, and defined in Mexico as containing less than 1% THC, and THC-rich cannabis, known as marijuana. It is the latter that has generated great controversy, given its psychoactive properties. However, industrial hemp is an extremely generous variant / genus, with applications ranging from being a remedial plant (yes! It can clean heavily contaminated soils) to serving as a substitute for fossil fuels, building materials, plastics, etc. In fact, as we have pointed out before in this blogWe believe that industrial hemp may well serve to reactivate the Mexican economy of a sustainable firm. Unfortunately, what we have noticed in Mexico so far is that hemp has been ignored, both by the business community, as well as by activists and the media. This ignorance has served to give hemp almost no regulation, which gives more flexibility to create a company in this sector.

In our next posts we will continue to debunk myths, ranging from the understandable to the downright ridiculous. Ultimately, well-informed investors and companies make better decisions, and clients who make informed decisions make better use of our services.

To find out more, write to us at firm@harrisbricken.com ! In the meantime, we invite you to consult the posts we have published about cannabis in Mexico.

The post The main myths about cannabis in Mexico: part 1 appeared first on Harris Bricken .