There’s no doubt that cannabis legalization in Mexico will create investment opportunities in the U.S. The United States will likely place a trade barrier on cannabis from Mexico to protect domestic companies places trade barriers on tomatoes in Mexico, and many see similar actions being placed on cannabis. will likely implement trade barriers to protect domestic companies. The USMCA, formerly known as NAFTA, currently does not include cannabis, raising the question of whether Mexican producers will be able to import cannabis into the U.S. There are also many questions regarding how Mexico’s cannabis legalization will affect the U.S. Mexico’s legislators believe the cartel will be forced to operate legally over time as they won’t be able to compete in the illegal market and keep as much power as they currently have. While those with criminal records can’t obtain any cannabis license, cartels have a deep network, and Mexican officials can’t always determine whether someone is connected to a cartel. One issue Mexico will face will be keeping the cartels from transitioning to the legal cannabis market. One estimate has cannabis legalization bringing up to $5 billion to the economy annually. With a population of 130 million and over 10 million regular cannabis users, Mexico will generate $1.2 billion in annual tax revenues while saving $200 million annually in law enforcement and creating thousands of new jobs. This bill, “The New Federal Law on the Regulation of Cannabis,” is awaiting approval by the Senate and then only needs to be signed by the President to be passed into law. As of now, Mexico is on the edge of legalizing recreational cannabis use. Commission on Narcotic Drugs transferred cannabis from a Schedule 4 to a Schedule 1 drug under the Single Convention. In 2018, the Mexican Supreme Court deemed the prohibition unconstitutional, and in December 2020, the U.N. In 2015, the country decriminalized cannabis use, and in 2017, legalized medical cannabis containing less than 1% THC. After the war on drugs significantly increased violence in Mexico and gave the cartels more power than before, Mexico began to alter its stance. The prohibition gave rise to the cartel’s involvement in the illegal cannabis industry in the ’80s, and these cartels have consistently supplied the U.S. conventions on narcotic drugs, beginning with the Single Convention on Drugs in 1961. The movement of cannabis was first regulated by the three U.N. After Mexico news outlets widely reported stories of cannabis users committing violent crimes, a cannabis stigma was created, resulting in Mexico banning the production, sale, and use of cannabis in 1920, followed by a ban of exports in 1927. While marijuana has been around in Mexico since the 1600s, the real story begins in the 20th century during the Prohibitionist Era. By Claudia Della Mora, Black Legend Capital
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