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Mexico’s Cannabis Legalization Heightens The Pressure On The U.S.

March 9, 2021

Mexico is on the brink of becoming the third country to legalize cannabis at the national level, according to former Mexican president Vicente Fox. Fox, who is on the board of Canadian cannabis company Khiron Life Sciences, told Reuters that Mexico’s Congress would pass legislation this week, backed by current president Andrés Manuel López Obrador. After clearing two committees yesterday, the bill is scheduled for a vote in the lower chamber of the legislature later today.

“We’re receiving direct information from the lawmakers,” Fox told Reuters on Friday. “It’s information that is quite trustworthy and solid, and next week this should be approved.”

Legalization in Mexico would be a major development for both Mexico and the U.S. Most obviously, it would sandwich the U.S. between two countries that have enacted recreational access. Our southern neighbor has a population of 126 million people, according to its 2020 census, which, for perspective, is more than triple the population of Canada. If Canada’s example, with its population that’s smaller than California’s, can ramp up pressure for U.S. legalization as much as it has, the addition of Mexico to the equation may tip the balance. As we’ve seen at the state level in the U.S., legalization in one state places immense pressure on its neighbors to follow suit lest they allow the related jobs and revenue to slip away.

Looking at Canada’s example, it’s undeniable that the aegis of national approval has profound effects on growth and business potential that the U.S.’s patchwork of state-level laws is struggling to match. While numerous U.S. companies are developing into major players, the current expenses associated with establishing independent operations in each new state—because cannabis products can’t cross state lines without incurring federal liability—are a barrier to the kind of nationwide ubiquity that Canadian brands are capitalizing on. Between its massive consumer base and tropical climate conducive to outdoor, sun-kissed cannabis cultivation, Mexico could supercharge these trends, developing brands and production capacity that U.S. competitors will have difficulty matching on a piecemeal basis.

There are also the benefits that legalization should bring to Mexican society, most notably the hope of crippling the cartels that for decades have been propped up by producing and selling cannabis to the U.S. Due to a ruling from the country’s Supreme Court that found prohibition to be an unconstitutional abridgement of civil rights, Mexico’s lawmakers have a mandate to legalize by an April deadline.

“The domino effect is happening,” Fox said. “Many great things will happen. We’re taking away this beautiful plant from criminals and putting it in the hands of retailers and farmers.”—Danny Sullivan

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