Mexico comes into focus with expert panelists

Cannabis has gone through a complicated legal procedure in Mexico that has decriminalized the drug for medical and private recreational use in small doses.

In 2018, Mexico's supreme court found the law prohibiting recreational cannabis use unconstitutional, resulting in a legal vacuum that meant Congress was tasked with coming up with a new law regarding cannabis.

While many expected this would lead to the creation of an official cannabis program, that has not yet actually happened, as there have been delays on the expected new law.

In June 2021, the supreme court voted eight to three in favor of decriminalizing recreational cannabis use in private settings. However, there’s still a long way to go for there to be a thriving open market.

“Nothing is really moving right now,” Lorena Beltran, founder and director of CannabiSalud, a medical cannabis symposium in Mexico, said during the panel.

Steve DeAngelo, a well-known cannabis business and activist figure, explained to the audience that he has high expectations for markets like Mexico when it comes to cannabis opportunities.

“The Spanish-speaking world is going to be a major, major market for cannabis,” he said.

When asked what the investment environment is like for cannabis ventures in Mexico, DeAngelo responded to host Jeff Finkle, CEO of the Arcview Group, by describing it as nascent.

“But it’s happening,” DeAngelo said. "I’m in conversations with one fund now that has already taken in capital and has already made investments and is focusing mainly now on what they can (invest in), which is mostly ancillary cannabis-related businesses as opposed to any plant-touching business, because it’s just not investable there yet."

Geoff Trotter, chief growth officer and co-founder of Regennabis, also expressed a lot of support for the potential opportunity attached to the Mexican cannabis market.

For her part, Beltran explained she is not convinced that enough movement is on the way when it comes to Mexico’s cannabis direction. “I’m the person that tries to be positive ... Every year I say, ‘This is the year, this is the year,’” she told her fellow panelists. “But it’s hard to know.”

US and Mexico relationship comes into play

When discussing the potential relationship between Mexico and the US, DeAngelo said he is curious to see how leading US companies will engage in international ventures if legally allowed.

“I think that US companies either get involved with Mexican companies and support them and see them as their gateway to the Spanish-speaking global market, or those companies will turn into threats," he said.

Hernan Gonzales-Moneta, a partner with law firm Duane Morris, said he’s very intrigued about what happens in a hypothetical world in which Mexico opens the doors to cannabis from a federal perspective while its biggest commercial partner and ally, the US, continues to sit on the sidelines federally.

While cannabis programs are widely available throughout the US on a state-by-state level, on a federal level the drug is still considered an illicit substance and its commerce is technically still blocked.

When it comes to countries legalizing drugs like cannabis for adult use and allowing them to thrive on a larger level, political sentiment plays a key role. Beltran explained that Mexico's current president, Andres Manuel Lopez Obrador ⁠— or AMLO as he’s most commonly referred to ⁠— is not very keen on seeing adult-use legalization.

Investor takeaway

Mexico appears to be on the brink of attracting a higher level of investment interest and business opportunities thanks to cannabis. However, right now the landscape remains uncertain in the country as experts debate whether regulators are likely to open up the program sooner rather than later.