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New Mexican Supreme Court Ruling & the Start of a Commercial Cannabis Market

commercial cannabis market
Written by Sarah Friedman
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The Mexican government might be dragging its feet, but the court system isn’t. A new Mexican Supreme Court ruling has now signaled the start of a commercial cannabis market in the country by way of a low-THC industry, done through a ruling in favor of the company Xebra Brands.

The Mexican commercial cannabis market has been waiting to commence for nearly three years. Now, a new Supreme Court ruling is getting it on its way. Luckily, cannabis markets are already set up in 18 states of the US, with tons of products, both regulated and unregulated, to take advantage of. Like the new cannabinoid market which boasts a host of compounds from delta-8 THC to HHC to THCV. It’s the time of year again to think of Christmas trees and stocking stuffers, so check out our deals on cannabis compounds to get the holidays going right.


A little background on the Mexican cannabis conundrum

At the end of 2018, a fifth consecutive Supreme Court ruling was made in Mexico related to the recreational use of cannabis. As all five consecutive rulings were somehow in favor of recreational use, this set off something called jurisprudencia. Jurisprudencia happens when five consecutive rulings override stated legislative law, to make new legal precedent. In this case, it was decided that the stated laws of cannabis prohibition were unconstitutional.

When this happened in 2018, the Supreme Court essentially commanded the government to come up with new legislation that was in concert with these court rulings, which had just become law by way of jurisprudencia. Otherwise, the written laws, and the new stated laws would be in contrast, with one set saying prohibition is unconstitutional, and one set saying that the cops can arrest a person for possession and use.

This was all fine and good, except the government has been wriggling out if its responsibility since it was given it. At the first deadline, one year after the rulings, the government could not pass a bill, and asked for an extension by the court, which was granted. Deadline two came in spring of 2020, at which point the government asked for and received, once again, an extension. Third deadline came in December of 2020, and for the third time, an extension was asked for and granted. This brought us to April 2020, when not only did the government not have the work done, but it didn’t even ask for an extension.

Mexican Supreme Court

By not asking for an extension, it was sort of like the government flipping the bird to the Supreme Court. But apart from being a rude gesture (or showing of incompetence), it also kicked it back to the Supreme Court to do something to maintain its ruling. So, on June 28th 2021, the Supreme Court – without a bill passed to institute laws or a regulated industry, dropped the laws of prohibition around personal cultivation and use making Mexico the 4th legalized country. Nothing else changed though. At least, not until the Supreme Court was forced to make a new decision.

Supreme Court ruling opens Mexican commercial cannabis market

The initial ruling in 2018 did nothing to establish a Mexican commercial cannabis market; such structures generally come from written legislation. Even the dropping of the laws of prohibition this past June also did nothing to institute a commercial market. So now, two years after the first deadline, no law exists, and no market has been created, even though private cultivation and use have been legalized for adults.

A lot can be wagered as to the reason for this delay. According to the government itself, it has to do with infighting over issues like protections for local farmers, and restrictions of use. To those less trusting of government lines, it appears to have more to do with going up against cartels, or making decisions that could put politicians at odds with different illegal organizations.

Considering over 100 politicians were killed in the lead-up to the 2018 elections in Mexico, it’s hardly far out there to assume individual politicians are afraid to anger the very organizations which have already been running these black-market industries for decades. This is what I think, but you can form your own opinion on the situation.

Anyway, though the government continues to stall, the Supreme Court has once again pushed forward in favor of its own ruling, making yet another ruling in a different case, which starts the process of opening a Mexican commercial cannabis market. The ruling, made on December 1st, was in favor of the company Xebra Brands, whose Mexican subsidiary Xebra Mexico, went to the Supreme Court over what it said was the unconstitutionality of not allowing cannabis to be grown commercially with 1% THC or less. Xebra Brands can be found on the Canadian Securities Exchange as XBRA.

The case

On December 1st of this year, the Supreme Court ruled in an unappealable ruling, that it was indeed unconstitutional to bar the production of low-THC cannabis. This ruling now means that Mexico’s Federal Commission for the Protection against Sanitary Risks (COFEPRIS) – its national health agency, must implement this decision.

cannabis industry

COFEPRIS was challenged in court by Xebra Mexico, over the legality of production for medical and scientific purposes, but not for commercial use. Technically, Mexico is supposed to be instituting such a system – complete with regulation, but since the government hasn’t turned in its homework, the stated laws have remained that commercial cannabis cultivation is illegal. Xebra used the five consecutive rulings, and the announcement of cannabis laws being unconstitutional, to go after COFEPRIS’ ban on commercial production.

It’s not shocking that Xebra won. The Supreme Court has to keep in line with its own ruling, and its own ruling stipulates this should be okay. That there are no laws to govern such an industry is a failing of the government, but shouldn’t erode the peoples’ ability to use  the laws afforded them. And that’s what Xebra did by going up against COFEPRIS in court.

The company now plans to put out a line of low-THC products involving CBD and CBG, in the form of topicals, tinctures, oils and beverages. As can probably be imagined, this should open a floodgate of companies following suit, which should put that much more pressure on the legislature to get its act together if it doesn’t want pandemonium. Or, more realistically, if it wants to be able to tax the industry. That, of course, will mean making real decisions, which the legislature is going to have to buckle down and do.

The future of the Mexican commercial cannabis market

If you’ll notice, I didn’t say ‘Mexican regulated commercial cannabis market’, though that’s what it should be. Usually, laws are put on paper to establish rules and oversite for an industry, which include the government’s own cut of it through taxes. Without having laws on the books, not only is there nothing to guide the industry in terms of safety measures, operating guidelines, or industry restrictions and consequences, but it also means the government gets nothing out of it, which governments don’t tend to like.

While it technically could continue this way, it leaves the door wide open for all kinds of abuses. Allowing for abuses within an industry can result in more than simply faulty or fraudulent products, it can lead to real harm and death, and the subjugation of populations. Think of what diamonds did to the people of Africa. Without any form of regulation, no company is beholden to anyone about business practices, and what is used in products never has to be disclosed, or can be lied about profusely. Now think of vape deaths from added chemicals, and how easily that could have been avoided by simply not using the additives that made people sick.

When Mexico’s legislature gets it together, it will provide the laws to regulate the industry, which should then be expanded to include a high-THC market as well. Though Xebra just won the right to produce products, it should be remembered that buying and selling those products still remain illegal.

Mexican commercial cannabis market

Xebra will have to do more to get products to market, though perhaps the company is banking on the government doing its job by that time. As of right now, Xebra has no cannabis industry guidelines to go by, and can do what it wants on many fronts. In the future, Xebra will be held to certain requirements, but as of right now, those requirements don’t exist, at least not for cannabis production. In fact, it has not been made clear what government agency will oversee such production, and what preexisting laws related to farming and product production, might apply. Some laws undoubtedly will.

Perhaps Xebra intends to export all products out of the country to be sold elsewhere, or maybe it’ll be waging a new lawsuit to gain the ability to sell in Mexico. Either way, commercial production of low-THC cannabis products is now a thing in Mexico.

Conclusion

With this Supreme Court decision which begins to establish a Mexican commercial cannabis market, Mexico is plunged even more deeply into confusion and disarray. Hopefully this new ruling will light a fire under the collective butt of Mexican Congress, and get it to do its job. If it doesn’t, a new free-for-all is likely to surface and become incredibly intense, and what that will ultimately lead to? Who knows…

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DisclaimerHi, I’m a researcher and writer. I’m not a doctor, lawyer, or businessperson. All information in my articles is sourced and referenced, and all opinions stated are mine. I am not giving anyone advise, and though I am more than happy to discuss topics, should someone have a further question or concern, they should seek guidance from a relevant professional.

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About the author

Sarah Friedman

I look stuff up and and write stuff down, in order to make sense of the world around. And I travel a lot too.

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