New hemp license in Mexico: Regulatory challenges remain

A notable development in Mexico's hemp industry occurred as Semillas Endemicas Mexicanna SA de CV received the country's second hemp license from the Federal Commission for the Protection against Sanitary Risks (COFEPRIS).

According to exclusive report by El Planteo, this license encompasses activities such as importing, sowing, cultivation, harvesting, and processing of industrial hemp under the country's THC limit of 1.0%. Despite this progress, the absence of comprehensive regulations continues to pose challenges.

Approval amidst regulatory uncertainty

COFEPRIS, while granting the license, highlighted the ongoing lack of specific regulations for planting industrial hemp. The agency's authorization document pointed out that the regulatory void makes it challenging to evaluate conditions necessary for hemp cultivation.

Further stages of hemp production in Mexico also remain unregulated, complicating the industry’s growth and stability.

Efforts towards regulation

There have been legislative efforts to establish the Mexican Institute for Cannabis Control, a decentralised body under the Ministry of Health. This proposed institution would be responsible for issuing licenses, overseeing hemp and marijuana programmes, and promoting public education on cannabis.

The envisioned regulations include provisions for social justice programmes aimed at small growers and communities impacted by cannabis prohibition. Notably, one draft provision suggests that 40% of licenses in the first five years would be allocated to indigenous communities and others adversely affected by past drug laws.

First license and legal precedent

The first hemp license in Mexico was awarded to Xebra Mexico, a subsidiary of a Canadian cannabis company, following a successful lawsuit against COFEPRIS. The Mexican Supreme Court ruled that prohibiting the cultivation and processing of cannabis for industrial uses violated the constitutional right to work.

Despite COFEPRIS’s objections due to the absence of a regulatory framework, a federal court upheld the Supreme Court’s ruling, compelling COFEPRIS to issue the license to Xebra Mexico.

This legal precedent facilitated the issuance of the license to Semillas Endemicas Mexicanna. However, COFEPRIS reiterated that specific regulations for all stages of hemp processing are still pending.

The law to establish comprehensive hemp rules has been under consideration in the Mexican legislature for several years, following the high court's directive to end the prohibition on personal cannabis possession and cultivation.

Ongoing challenges

The delays in forming the Mexican Institute for Cannabis Control and establishing a full regulatory framework continue to hinder the development of the hemp industry in Mexico. Stakeholders are urging the government to expedite these processes to ensure a structured and reliable growth environment for the hemp sector.

Personal perspective

In my view, the approval of the second hemp license marks a significant step forward for Mexico's hemp industry. However, the ongoing absence of a robust regulatory framework poses a substantial challenge.

Mexican lawmakers must expedite the establishment of comprehensive regulations to support the growth and stability of the industry. This will not only benefit the economy but also support social justice initiatives for communities historically affected by cannabis prohibition.