Six weeks in the past the cultivation, processing, merchandising and import/export of medical hashish was regulated in Mexico, making the nation one of many largest on the planet to have absolutely legalized medical hashish.
We have now written a number of weblog posts (see here and here) in regards to the new Rules on Sanitary Management for the Manufacturing, Analysis and Medical Use of Hashish and Its Pharmacological Derivatives (the “Medical Rules”). We additionally carried out a webinar for events (replay here) that was so in style we’re conducting a follow-up on-line Q&A webinar this Thursday, March 4th (register here! And make sure to submit your questions whenever you do.)
Prematurely of the following webinar and maybe to information or pre-empt your questions in case you plan to take part, I wish to spotlight a few of the issues I believe hashish companies curious about Mexico needs to be doing proper now. These steps can and needs to be taken prematurely of the Mexican authorities’s full implementation of the Medical Rules, which can allow companies to safe licenses and begin operations.
Implications of full legalization of medical hashish
As background, Mexico’s $1.3 trillion financial system is the second-largest in Latin America and Fifteenth-largest on the planet. Mexico has a inhabitants of almost 130 million, and a fast-growing center class with growing buying energy. As well as, Mexico is the second-largest pharmaceutical market in Latin America and the 11th largest on earth, with revenues of over $10 billion.
The importance of the legalization of the cultivation, processing, merchandising and import/export of medical hashish is three-fold:
One, legalization will strike a robust blow towards unlawful hashish actions in Mexico and propel Mexico as an exporter of hashish merchandise to markets to which it already sells medicines, comparable to South America, Europe, and america.
Two, legalization offers hashish companies with a possibility to serve and develop the sizable Mexican market.
And three, legalization affords worldwide hashish companies a possibility to determine manufacturing operations in Mexico to leverage the nation’s considerably decrease prices.
Subsequent steps for hashish companies
What steps ought to hashish companies be taking proper now?
The passage of the Rules on January 12th marked the beginning of a phased implementation of permitted enterprise actions as a way to facilitate coordination among the many authorities companies in command of decoding and administering the Rules.
It’s anticipated that licensing might be typically accessible on Might 23, 2021, and firms curious about making use of for licenses needs to be making ready the suitable documentation now. As well as, in fact, companies needs to be deciding precisely what licenses they need and want, structuring their companies accordingly. This implies taking a look at entity formation, actual property necessities, employment legal guidelines and laws, and provide chain/service supplier issues. All of those have regulatory implications and necessities.
The street map to establishing a hashish enterprise in Mexico has been drawn in different nations and jurisdictions; as elsewhere, companies should decide the exact regulatory necessities related to their operational mannequin and watch out to dot their “i’s” and cross their “t’s.” It goes with out saying, I hope, that getting sound authorized recommendation is a should.
What in regards to the legalization of hashish for non-medical use?
One other query that many hashish companies have posed to us following the complete legalization of medical hashish in Mexico has been: when can we anticipate the legalization of hashish for non-medical use?
There are a number of components at play, not least that 2021 is an election yr in Mexico and politics are a consideration; nonetheless, my colleagues and I imagine one thing will occur earlier than the tip of this yr. Laws to legalize hashish for non-medical makes use of is working its approach by means of the Mexican Congress, and approvals are touring from the Senate to the Decrease Chamber to the workplace of the President.
We anticipate that if we do see the legalization of hashish for non-medical makes use of this yr, the method of implementation will cut up into two tracks: one for merchandise with lower than one p.c (1.0%) THC and one for merchandise with higher than one p.c (1.0%) THC. We anticipate the decrease THC content material product observe to take round six months to implement and that the upper THC content material observe would require as much as 18 months to implement.
We have now seen in different jurisdictions that the businesses which might be forward in medical hashish purposes are normally the primary (permitted) to maneuver in non-medical purposes. Full legalization of hashish for medical use is a approach to offer reassurance to socio-politically conservative stakeholders that cannabis-derived merchandise could make a optimistic contribution to society. Firms which have gained the belief of regulators, legislators, and most people have clear benefits as markets open additional. In consequence, now is an effective time for events to consider shifting ahead.
From a market perspective, the legalization of hashish for medical makes use of will strike a blow towards unlawful hashish actions, however undoubtedly a few of the organizations in that area will make efforts to legitimize themselves. The standard of their merchandise may initially be low in some instances, however they’ll purchase experience and they’re going to change into extra aggressive. Established companies will carry experience and high quality to the Mexican market, which for medical hashish merchandise alongside is forecast to succeed in $2 billion by 2025.
These are thrilling instances! Please do be part of us in case you can for the Q&A webinar this Thursday, March 4th!