The Mexican Deputies Chamber has passed a reform to permit regulation of the hemp and marijuana industries. However, the imminent law still has hiccups to address and it may take years before the thriving sector emerges.
Legislators in the Mexican lower house voted overwhelmingly to second the proposed legislation, 316 votes were in favor, 129 opposed and 23 legislators were absent.
The reform will then move ahead for senate review and approval of the reform’s amendments before it goes to President Lopez Andres Manuel Obrador for his consideration and signature.
When the bill is enacted as law, Mexico will become the third country, after Uruguay and Canada, to authorize the recreational cannabis industry.
Nonetheless, the range of the sector and available investment opportunities will be determined by marijuana laws.
When those rules are developed, they will limit business opportunities in some scenarios and open doors to others. This could create unexpected implications for investors and businesses.
The Senate version of the legalization measure was passed in November 2020.
The Mexican Supreme Court earlier concluded that the absolute criminalization of adult-use cannabis was illegitimate, triggering the process of launching a formal rule.
Jose Campos Alberto Vargas, Sanchez DeVanny law firm’s attorney that’s based in Mexico, admitted that there’s surging interest for the sector. He added that it’s important for investors to know that most of the activities, products, and services related to the sector are yet to be regulated and their implementation will require more time.
Alberto Vargas also said that due to the industry’s novelty, it’s possible that federal, municipal, and state authorities need more time to comprehend the hemp and mj sector’s requirements and challenges and provide the required regulations.
The lower house-approved reform got stripped off a provision to set up a specialized regulatory department that would have overseen issuance of regulation and awarding licenses.