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Mexico creates a market of $5 billion dollars with marijuana legalization

Cannabis in Mexico is technically illegal but the law prohibiting its use was declared unconstitutional by the Supreme Court of Mexico on October 31, 2018. The effect of the ruling is that the law was generally made unenforceable and that the government of Mexico must act to formally legalize cannabis within a period of 90 days. Use for THC content less than one percent was legalized in 2017.

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Mexican businessmen are “optimistic” about the upcoming “green economy boom”. This would bring the legalization of marijuana to another stage. The opportunities it represents for industry and the country’s countryside is a big plus.

Potential marijuana market

Guillermo Nieto, president of the National Association of the Cannabis Industry, anticipates that the regularization of marijuana will pass shortly. He estimates that in January 2021, a potential market of $5 billion dollars per year would become active.

For that reason a year ago the Anicann emerged. Now it brings together 200 entrepreneurs ready to invest. As soon as marijuana becomes legal, the country will have the potential to produce up to three times more crops than those of the United States and Canada.

That competitiveness could turn Mexicans into spearheads in a new green economy. In addition, people like to think that Mexico is going to become the main producer of cannabis patients in the world.

Marijuana market
The marijuana market may turn Mexico into a new green economy. (Source)

Debates in Mexican Congress

Additionally, the debate over marijuana reactivated in the Mexican Congress this month. Congressman Mario Delgado presented a bill to find a state company Cannsalud. It would exercise the monopoly of commerce in the country. In addition to a special tax of 12% will be for social programs.

This proposal considers an unconstitutional absolute prohibition on the recreational use of the plant. However, Nieto sees the current proposals as positive. He believes that the important thing is to establish “clear rules” and “level playing field for all”. So he also asks to create a cannabis cluster, where civil society, business, and government come together to invest in the development and research of the plant.

It’s the new green gold. Today we are thinking that we no longer have oil because we must think about this, which apart from being renewable. Every 20 weeks a farmer can sow again.

Marijuana industry

We want to form and cultivate an industry with a conscience. Also, to contribute to society through this industry and that is nothing more than economic profits. It is easy for Mexicans to understand.

Given the growing number of initiatives, Snapp suggests that legalization prioritize national producers, especially in areas disproportionately affected by the “war on drugs”. It contemplates three ways to access the plant: self-cultivation, cultivation of associates, and a regulated market.

We have certain legal figures in the social sector of how we can privilege ejidos, communal properties, and small owners. Furthermore, we are really seeing this as one of the actions that are going to be necessary for the construction of peace and for the repair of the year,” he says.

Organizations are struggling to combat the stigma of consumption and disinformation surrounding the properties of the plant. This has more than 100 compounds, known as cannabinoids, not all of which are hallucinogenic. You can use it for industrial and medicinal purposes.

Marijuana smoking
Marijuana legalization will prioritize national producers. (Source)

Taxes for hemp cultivation

The Anicann estimates that in Mexico there are only about 7.2 million recreational users, but that there is a potential of 40 million people who could use a product derived from cannabis on a daily basis, such as ointments and painkillers.

The association also estimates that the Mexican government could collect up to $400 million in taxes annually and that farmers could receive more than $3,000 per hectare cultivated.

In America, marijuana has been legalized at the national level in Canada and Uruguay in all its types of use and in the different stages of the production and commercialization chain.

In addition, its recreational use is legal in 11 states and the capital of the United States, where at the medicinal level it is also legal in 33 entities and Washington, D. C., although at the federal level it is still penalized.

On the other hand, its medical use is regulated, with different stages of progress, in Argentina, Chile, Colombia, Peru, and Mexico itself.

(Featured image by Jorge Aguilar)

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First published in economiahoy, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. B2I assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. B2I is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

 

 

Anthony Donaghue writes about science and technology. Keeping abreast of the latest tech developments in various sectors, he has a keen interest on startups, especially inside and outside of Silicon Valley. From time to time, he also covers agritech and biotech, as well as consumer electronics, IT, AI, and fintech, among others. He has also written about IPOs, cannabis, and investing.

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