Our prior post discussed the rapidly evolving cannabis regulatory environment in Mexico.  As the Supreme Court-ordered deadline for lawmakers to end cannabis prohibition approaches, Senators raced against the clock and unveiled last week a preliminary draft bill of a law that would regulate nearly the entire cannabis industry.

The preliminary draft bill, titled the “Law for Cannabis Regulation”, comprises 74 articles and 11 transitory provisions that integrate various legislative proposals, including the prior leading bill from Mrs. Olga Sánchez Cordero (former Senator and Judge, and current Minister of Interior).

Among other things, the Law for Cannabis Regulation:

  1. Allows (i) recreational, (ii) scientific, (iii) medical and therapeutic, and (iv) industrial uses of cannabis;
  2. Provides that farmers, growers and vulnerable communities are given priority on the issuance of licenses and authorizations and access to financing from development banks; and
  3. Sets a growing limit of up to four cannabis plants, on private property, for adults 18-years or older who can join “consumption associations” (civil associations with 2 to 20 members) for such purposes.

Contrary to the bill introduced in November 2018 by Mrs. Olga Sánchez Cordero, the new government agency that will issue regulations and licenses for cannabis will act as an independent decentralized body of the Ministry of Interior and not under the Ministry of Health. This new entity will be in charge of issuing four types of cannabis licenses (growing, transformation, sale and importation/exportation licenses), as well as permits for personal use of cannabis and its derivatives.

In addition, the bill would impose certain restrictions on the issuance of licenses in order to avoid vertical integration and benefit vulnerable groups affected by measures taken during the prohibition era. These are, specifically: 1) No individual or company may have more than one type of a particular license; 2) A single retailer may be granted no more than three sale licenses per state; and 3). Farmers or ejidos (entities that own communal lands) shall be granted at least 20% of the total growing licenses during a 5-year period after the law enters into force.

Also noteworthy is the fact that under this preliminary draft bill, the commercialization of cannabis-infused edibles and beverages would be prohibited, except for medical or therapeutic cannabis users. In addition, cannabis products mixed with alcohol, tobacco or caffeine would be banned. The Mexican Senate is expected to work on this preliminary draft bill and formally vote on it by the end of October. If approved, the proposal would still be subject to review by the lower house of Congress before   moving on for presidential approval.


Paulina Doen is an associate in Baker McKenzie's Mexico City office where she specializes in Energy, Mining and Infrastructure.