Mexico Moves to Legalize Marijuana–Will Canada Benefit?

The cannabis legalization movement is expanding with Mexico now set to adopt a law making it legal for medical and scientific purposes.
On April 28, the Lower House of Congress approved a previously voted bill, according to the Yucatan Times, and will now go to the hands of Mexican president Enrique Peña Nieto for approval. According to Reuters, he is expected to sign it into law.
Despite the excitement surround the news, experts have said to lower expectations when it comes to drug trafficking in Mexico since the bill only refers to medical and scientific use.

“It won’t change anything,” Raúl Benítez Manau, an expert on security affairs at the National Autonomous University of Mexico told the AFP. “Narcotrafficking is going to stay the same.”
Mexican officials will now have to begin drafting specific instructions for medical companies to follow as they begin using cannabis in their research.

Interest from Canada

Thanks to this announcement, Aaron Salz, an advisor for Canadian companies in the cannabis sector with Stoic Advisory, said in an interview with the Investing News Network it’s now likely for some types of partnerships to develop.
“I think you will definitely see interest in Canadian companies in participating in the Mexican market,” he said. “You will definitely see interest in companies right away in exporting to the Mexican market and to aiding those companies there in getting things set up.”
However, Salz also said he doesn’t think any companies will be rushing to set up shop in Mexico, due to an uncertainty in what the licensing process may look like there.
“You’ll certainly see partnerships, you’ll see information sharing. I would almost be certain that the regulators will communicate with each other if they haven’t already,” Salz added.
Salz told the Investing News Network one of the most exciting things in the cannabis sector right now is that Canadian companies can be part of the export process for medical purposes in countries like Brazil, Australia, and Germany.
As of yet, no information regarding potential developing partnerships or interest related to Mexico’s cannabis legalization has been released, but it is more likely than those deals will begin taking some form in the coming months once the law is set in place.

Investor Takeaway

The news of legalization from a country that has a positive business relationship with Canada should excited investors in the market. The test is now to wait and see which company will launch themselves into the Mexican market.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.