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June 07, 2021
The State of Mexico's Marijuana Legalization & Its Predicted Impact


As Mexico heads toward being the latest country to legalize recreational cannabis, the effect it will have in helping end marijuana prohibition around the world should be astonishing.

In 2018, the Mexican Supreme Court ruled that Mexico’s ban on recreational marijuana was unconstitutional, effectively forcing lawmakers to regulate it. The current bill to do so would permit individuals to carry up to 28 grams and also grow up to six plants at home. Furthermore, adults over the age of 18 would be allowed to purchase cannabis in designated retail stores, cultivated by licensed cannabis growers.

On March 10, 2021, the Lower House voted 316 - 129 in favor of the Federal Law for the Regulation of Cannabis and now continues its journey through the Mexican legal system with expected approval. When this bill passes, it will make Mexico the largest federally approved consumer market for recreational cannabis to date, with a population of over 125 million people. This does not include the millions of tourists the Latin nation welcomes every year.

Mexico's impending federal legalization will mean that a second major North American country will have ended prohibition, leaving the United States in a large, legal marijuana sandwich. That doesn’t mean the Biden administration will be influenced to follow suit in the same way, but it’s hard to ignore the incredible implications it would have for America's neighbors.

Canada, with a population of only 37 million people, raked in $2.6 billion in cannabis sales during 2020, up 120% over 2019. It’s important to note that was also during a pandemic where shopping in retail stores was limited. On the other hand, Mexico is projected to make $843.7 million annually at the beginning of its legalization initiative.

The Bill itself however is not without excessive punishment, leading to Human Rights Watch to call on Mexico's Congress to amend their bill and decriminalize possession. Anyone suspected of having over 28 grams of cannabis can be detained by police for up to 48 hours, and turned over to public prosecutors. A stark example that cannabis prohibition will die a slow death both in Mexico and around the globe.

Legalization's effects on Mexico's ongoing drug war

But the potential effects of legalization in Mexico go far beyond profit. Mexico has been in the grips of a brutal drug war for well over a decade. The cartels not only have incredible power in various areas of business, they also have significant influence over the political and judicial system in some cases. By legalizing cannabis, the bill seemingly offers the chance to start a whole new sector, potentially one with less corruption than the black market.

“For a street gang or a small criminal network at the regional level [that] was only focused on only selling marijuana, obviously legalizing will have a huge impact [on the country],” said Dr. Edgardo Buscaglia in an interview with Ember. Buscaglia is the President of the Instituto de Acción Ciudadana, a non-profit human rights defender based in Mexico City.

Buscaglia added that transnational organized crime is a whole other issue, because in Mexico it has been “diversified into hundreds of legal and illegal businesses.” In those cases, he said that cannabis legalization will not make much of a difference.

“In Mexico, huge amounts of dirty money go into the legal sector,” he said. “If you allow legal firms to establish production and distribution channels for marijuana, it is extremely likely that cartels will take dirty money from human trafficking, migrant trafficking... they will channel that money to the legal sector to establish firms that will be producing and distributing marijuana." He added that this is already happening in the construction market, avocado industry, and many other sectors, and that sources of funding must removed from the many avenues organized crime uses to launder their illegal gains.

Buscaglia believes that for the legal cannabis market to be as free as possible from corruption, the financial intelligence unit, which he says is working “extremely well” in Mexico, needs to work hand-in-hand with federal prosecutors who are doing a “terrible job.” The prosecutors receive an incredible amount of intel from the financial intelligence unit and most of the time they do not move forward with it. “In order not to ruin the new legal marijuana market, we have to make sure that federal prosecutors change their leadership,” he said.

Despite this major issue and other problems, such as a lack of oversight for policing drug retail in general in Mexico, Buscaglia feels that cannabis should still be legalized at this time. “Mexico is not institutionally ready, but that doesn’t mean that we should not approve the [legal cannabis] law. But you have to make sure the law in the books and the law in action doesn't have a huge gap.”

So when will cannabis be legalized in Mexico?

With these challenges, where does this currently leave cannabis legalization in the country? Ember interviewed José Antonio Arochi, an Associate at Arochi & Lindner, a law firm in Mexico that has been involved with the push for legalization.

“Since 2016, there have been efforts from the private and public sector in order to allow the Mexican population access to recreational cannabis,” he said. Arochi went on to add that a notable step forward for the movement came from the Supreme Court in 2015 when it ruled that certain citizens would be allowed to grow and consume for personal use. Those were specifically the citizens that fought the case, but nevertheless, it opened the door for others.

Then in November 2018, Mexico’s Supreme Court overturned the country’s ban on recreational marijuana, but it took a long time for that to be acknowledged. “The vote in Mexico’s lower house, the Senate, came many years after the Mexican Supreme Court ruled that the country’s ban on recreational marijuana was unconstitutional,” Arochi said.

So now that it’s 2021, why has this not all happened yet?

Arochi explained that the process within Mexico’s Parliamentary system is slow moving. Specifically with cannabis, he said there are a lot of key players, economically speaking, who all need to agree on the system. “This process can take a lot of time. From a practical point and personal view, this is a lobbying situation [regarding] what this industry will become.” He added that everyone is really mainly fighting for their piece of the pie. 

These delays are reflected in the news weeks ago that lawmakers in Mexico failed to legalize cannabis by the deadline the Supreme Court gave them. A failure that continues to this day.

Arochi hopes the legislation will be done by the end of this year, however, he is quick to point out that it might take up to three years to establish the administrative procedures to make the newly formed industry run smoothly.

Jon Hiltz has been a journalist in the cannabis industry since 2016, writing for many major publications. In 2018, he became a published author with his first book The Wild West: Canada's Legalization of Marijuana, and he was the Director of Business Development for Indiva, Canada's leading edibles manufacturer for over 4 years.

These statements have not been evaluated by the Food and Drug Administration. Products are not intended to diagnose, treat, cure, or prevent any disease.
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