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Mexico to Join Canada in Legalizing Cannabis Ahead of U.S.

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Mexico’s lower house of Congress has approved a bill to establish what would be the world’s largest legal market for cannabis.

 

The United States has long prided itself on being the best. In instances where expediency was valued, U.S. leaders have also placed a premium on being the first.

First to the moon. First to use an atomic weapon in combat. Obviously, not all “firsts” are created equal, but this mentality is unquestionably one that has been held aloft as an ideal of what the U.S. is all about. Well, when it comes, to cannabis, it looks like we’re heading for third.

Last week, the lower house of Mexico’s Congress voted 316-to-129 in favor of a bill to legalize recreational marijuana. Specifically, the measure would allow adults to consume cannabis and, with a permit, grow a small number of cannabis plants at home. It would also grant licenses for producers to cultivate and sell the crop.

That seismic vote itself arrived three years after Mexico had opted to legalize medical cannabis but was put in motion over two years ago when the country’s Supreme Court ruled that Mexico’s ban on recreational marijuana was unconstitutional.

As the New York Times reported on March 10:

“The chamber approved the bill in general terms Wednesday evening before moving on to a lengthy discussion of possible revisions introduced by individual lawmakers. In its final form, though, the measure is widely expected to sail through the Senate before being sent to President Andrés Manuel López Obrador, who has signaled support for legalization.”

In short, there is a clear and expected path that this bill will soon become law. But what will such a law actually look like? And what does it mean for the fight to legalize cannabis federally in the U.S.?

The first thing to know about Mexico’s legalization effort is that it is has plenty of detractors.

Speaking with the New York Times following the vote in Mexico’s lower house of Congress, Harvard University economist Jeffrey Miron voiced his skepticism that the move would have far-reaching economic consequences.

“It’s hard to see any obvious broad effects on the Mexican economy,” said Miron. ““You will see a little bit of a bump in measured G.D.P. [but] people claiming that it will be a big boost to the economy through legalization, I don’t think that makes sense at all.”

Cited in that story is a report published in January by the cannabis data analysis company New Frontier Data. That report estimates that Mexico’s recreational marijuana industry could be worth as much as $3.2 billion dollars per year. But some investors are wary, citing the promised riches of Canada’s own decision to legalize (in 2018) as proof that putting your money in federally legalized cannabis won’t pay off.

To say nothing of the absence of pity that comes with sharing the sob stories of investors, it is clear that those who expected to see substantial returns from the Canadian market are, at this juncture, largely disappointed.

The New York Times summarized some of the most pertinent data thusly:

“In the last quarter of 2020, the country’s national statistics agency estimated that consumers spent $918 million Canadian dollars (about $736 million U.S. dollars) on legal weed products, considerably less than was predicted before legalization. Earnings have been sluggish and most producers are still reporting losses worth millions.”

Speaking with the Times, Michael Armstrong, an associate professor at Goodman School of Business at Ontario’s Brock University, opined that “the green rush part hasn’t materialized” when it comes to Canada.

“It’s been a positive boost for Canada,” he added, “but not a dramatic one by any means.”

Official figures also indicate that Canada is home to many more regular cannabis users than Mexico. Thus, there’s another element of this decision that concerns questions about Mexico’s population: namely, what percentage of it actually consumes cannabis?

From a population standpoint, Canada is the far smaller country, but statistically, there are more people who self-report consuming cannabis when compared with Mexico. Naturally, there is an argument to be made that such data likely fails to reflect the fears of Mexican cannabis users who may feel scared to make an honest disclosure about an illegal activity.

That’s the opinion of Guillermo Nieto, president of the National Association for the Cannabis Industry, which is a Mexico City-based trade group.

Speaking with the New York Times, Nieto gave his assessment that “the market for marijuana is a very small market,” explaining that from an agricultural standpoint, “it’s not going to help us like the legalization of industrial hemp.”

There are also concerns that small farmers are not being properly protected in the bill. While the proposal approved by the lower chamber does mandate that small farmers and Indigenous people be given licensing priority, it fails to install a system to ensure such a mandate is enforced or even viable.

And what about the cartels? Will legalizing cannabis spell the end of decades of violence and trauma? Gary Hale, a former Drug Enforcement Administration agent and drug policy fellow at Rice University’s Baker Institute, told the New York Times that he isn’t so sure.

Mainly, he noted, the issue is that the substance itself doesn’t matter—if it cannot be cannabis, the cartels will just turn to the next thing.

“I think [legalization] will have zero net effect on the drug wars in Mexico,” said Hale. “The internecine fighting among Mexican drug organizations and cartels will continue at the same pace and same scope.”

In light of Hale’s statements, it is also worth noting that the greatest blow to Mexican drug cartels thus far has, in fact, been the advent of U.S. states legalizing cannabis. Citing the DEA, the New York Times noted that the volume of marijuana seizures at the southwest border had dropped 80% since 2013.

Suffice it to say, there are a number of concerns and much to be decided before the era of recreational cannabis legalization fully gets underway in Mexico. Even still, from a place of patient advocacy and individual rights, the move can be seen as a victory.

In comments provided immediately following the lower chamber’s vote, NORML Executive Director Erik Altieri offered effusive praise for the moment and turned the spotlight back on the only country in North America that’s still without a plan to legalize cannabis at the federal level.

“We applaud lawmakers in Mexico for advancing a more just and sensible marijuana policy in their country,” stated Altieri. “By legalizing the possession and personal cultivation of marijuana by adults, and regulating its commercial sale, our neighbors to the south are implementing marijuana laws that represent common sense, sound public policy, and popular opinion.”

“Our own elected officials should learn from their Mexican counterparts,” he added, “in addition to those governing our northern neighbor Canada, and finally end our failed federal prohibition of marijuana.”

Looks like it’s time to settle for third.

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