Marijuana Is Coming to Mexico

Written by Jason Simpkins
Posted October 10, 2019

As it stands now, Canada and Uruguay are the only two countries that have legalized marijuana for recreational use.

But later this month they’ll be joined by a third.

No, not the United States.

Despite overwhelming public support, the financial and economic incentives, and the massive rush of states that have gone ahead and legalized cannabis on their own, the United States remains too puritan and too beholden to the Big Drug lobby to join in on the fun.

Instead, we’re going to sit back and watch Mexico move ahead of us.

Last year, Mexico’s Supreme Court ruled that the country’s ban on personal possession, use, and cultivation of marijuana was unconstitutional and said the government must formally legalize those activities by October 2019.

It must be nice to live in a country that free…

Anyway, the senate leader of Mexico’s ruling party, Ricardo Monreal, says his chamber is putting the finishing touches on a reform bill that will legalize marijuana for personal use, and allow adults to grow up to six cannabis plants.

“We’re thinking that we’ll bring the law out, approve it, at the end of October,” Monreal said. “That’s the schedule we have.”

Other key lawmakers have said the country should go even further by legally regulating cannabis sales and production, but the country isn’t quite there… yet.

It will be eventually, of course. Same as in the United States. It’s just that the race to fully dismantle marijuana prohibition has become more of a marathon than a sprint.

But again, the public support and financial incentives make it inevitable.

With 130 million people, Mexico would be the largest legal market for cannabis in the world, topping Canada.

Its current annual market value is $2 billion, but that figure is likely to balloon substantially as legalization takes effect.

“We are talking about a market with enormous potential, which is estimated to amount to $12 trillion over the next ten years,” said Senator Cora Cecilia Pinedo Alonso of the PT Parliamentary Group.

The industry could also support 50,000-75,000 jobs, reduce drug-related crime, and save millions on enforcement costs.

If you’re looking for a company that stands to profit, Aurora Cannabis (NYSE: ACB) is the most obvious choice.

The company got ahead of the curve last December, when it announced its intent to acquire Farmacias Magistrales S.A.

Farmacias owns and operates a high-quality 12,000 sq. ft. facility in Mexico City for the production of pharmaceuticals.

With 80,000 retail points for the sale of CBD products, and 500 pharmacies and hospitals for the distribution of THC products, Farmacias is the perfect distribution pipeline for Aurora’s non-flower medical cannabis products containing THC.

Farmacias intends to use the imported THC and CBD concentrates to produce various cannabis oil products for initial introduction to the medical market. It then plans to rapidly broaden its portfolio of products to include capsules, topical solutions, sprays, and other products.

Better still, Senator Monreal poured cold water on a proposed state pot company, declaring that there should be a regulated market for marijuana but not one in which the government has a monopoly.

So the market is wide open for private industry.

Still, if you really want to profit from the Mexican marijuana market and ride the wave of legalization in other parts of the world, including right here at home, you should check out Jimmy Mengel’s latest report.

Jimmy is the editor of The Crow’s Nest and The Marijuana Manifesto. He’s been on top of this trend for years and has all of the best stock picks.

Find his latest here.

Fight on,

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Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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