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As the US prepares to sentence El Chapo, Mexico readies to legalize cannabis

The Mexican Congress reconvened on February 1, and on the forefront of the agenda for the leading party, Morena was marijuana legalization.

The National Regeneration Movement or, Morena, a party that had never run for office before, won the Mexican general election in July 2018 with a coalition of supporters across all levels of society with one overarching goal: decreasing crime and corruption.

Most notably, drug crime.

Mexican cartels are partially responsible for record waves of homicides, up more than 15 percent in 2018, CNN reported. The largest cartel, the Sinaloa Cartel, located in the state of Sinaloa on the north-western coast of Mexico, is famously led by El Chapo, who was convicted this week in the United States on 10 criminal counts after 200 hours of testimony.

Via his leadership, the Sinaloa Cartel produced some of the largest quantities of marijuana and cocaine in the world.

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Morena thinks that its landmark legislation, taking deregulation further than previous governments, will help Mexico tackle their main platform position.

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Deregulating marijuana in Mexico

Just four months after the election, in November 2018, Sen. Olga Sanchez Cordero, Secretary of the Interior and member of the Morena Party, announced the new government’s strategy for combating drug crime and the regulation and control of cannabis.

In her announcement, she explained that “the prohibitionist policy which Mexico adopted in the last two [governments] have materialized in an armed conflict… demonstrate the failure of it: the enduring violence in all corners of the country and the criminalization of vulnerable sectors of our society due to activities relating to cannabis.” The legislation would liberate the vulnerable sectors and only punish individuals who are cultivating extra-legally.

Her announcement came just a week after Mexico’s supreme court ruled that cannabis prohibition is unconstitutional.

Morena’s announcement is not groundbreaking. Mexico has worked to control the legal drug trade deregulating the cannabis market for a decade. In 2009 it decriminalized up to 5 grams of cannabis and other assorted drugs and then in 2017 when it legalized medical cannabis in 2017, although this was largely for research purposes because cannabis-derived pills and oils must contain less than 1 percent THC.

The new legislation is the boldest move yet to reclaim control of the vast illegal drug market.

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How bold is bold?

If Morena’s bill passes, it will make them the third country to legalize recreational marijuana, behind Uruguay and Canada.

Key aspects of Cordero’s bill, which is 26 pages, allows individuals over the age of 18 to purchase and smoke marijuana, invites companies to cultivate cannabis for sale to both recreational and medical patients, and allows individual users to grow up to 20 government-registered plants. Cultivation of plants remained illegal despite two previous deregulation periods.

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Significant for Mexico is the opportunity to wrest control of cultivation and sales from the black market. Investors like Khiron Life Sciences Corp. (OTCQB:KHRNF) (TSXV:KHRN), Aurora Cannabis Inc. (NYSE:ACB), two prominent Canadian marijuana firms are already entering the market.

The future of recreational marijuana

So far, it appears the bill will pass. The author of the bill is a member of the ruling party and Mexico’s President, in charge of that party, Andrés Manuel López Obrador, is openly in favor of marijuana deregulation.

As medical marijuana is already legal in Mexico, government offices are already providing licenses to potential cultivators, and Mexico’s Federal Commission for the Protection against Sanitary Risk published guidelines for the use of cannabis as a medicine. A framework like this can help, or hurt, the bill depending on the successful implementation.

Morena’s main positions are founded upon the idea that legalizing the market will decrease violence related to drugs and cartels and that access to legal marijuana supports human rights and justice. In Colorado, California, and Washington, those who were once criminals are now entrepreneurs and experts on this lucrative crop.

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As Mexico is Latin America's second largest country, with more than double the population of the third largest, Colombia, governments, and investors across the regions should be prepared for the inevitable, legalization of recreational cannabis in Mexico.

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