A couple of weeks ago, the Asociación Indígena Productora de Cannabis de Oaxaca (AIPCO), a Oaxaca non-profit organization comprised of local indigenous cannabis growers, gave indigenous individuals and communities 26 medical cannabis growing licenses issued by Mexico’s Federal Commission For The Protection Against Sanitary Risks (Cofepris).

Around the same time, the government of the state capital, Oaxaca de Juárez, wrote to non-profits and NGOs to say that because there are no municipal regulations banning responsible cannabis use by individuals in public spaces, local policemen would be instructed not to bother marijuana consumers in the capital. This follows the Mexican Supreme Court’s decision last year deeming unconstitutional the prohibition to grow and consume recreational cannabis.

Implications of the Oaxaca medical cannabis licenses issuance

Great news? It would seem so! Watching licenses issued in one of the least developed states in the country, and seeing such an open stance on recreational use, is refreshing and allows for optimism. It also reflects an awareness among authorities that, as pointed out by local NGOs, Oaxaca’s location allows for the optimal cultivation of the plant.

That said, leaving marijuana smokers unmolested will mainly benefit the tourism industry, whereas the fact that growing licenses were issued to members of indigenous communities, only, will hardly move the needle on the cannabis industry in Mexico. True, licenses have the potential to develop and empower the indigenous communities to which they were issued, but only if those communities have the necessary capital, infrastructure and know-how to work those licenses up into profitable businesses. It is unclear how well equipped these licensees are to move forward, which means issuance of these growing licenses may be little more than a political act.

What are the real benefits of a political act, then? In other words, if doors are opening for Mexico cannabis licensing in Oaxaca, does that mean business to you? Probably not in the short-term, but it will if other states follow Oaxaca’s lead, and not just on medical or recreational cannabis.

Are there business opportunities for foreign companies?

Recently, a bill was put forward in the Oaxaca state congress aiming to facilitate access to various cannabis derivatives through public health services. These purpose of this proposed legislation is to complement the nutritional needs of local children and to make use of such derivatives as raw materials to make fiber, paper and fuels.

It is clear the bill is focused on industrial hemp as a basis for future economic growth in the state, and it is equally clear that the bill’s sponsors hope the indigenous population will benefit. If the bill passes into law, companies will have to be set up and foreign direct investment that brings technology and know-how will be necessary. Indigenous populations will not be able to take full advantage of this law on their own.

The bottom line: if Oaxaca can pass this bill, imagine what could happen if similar bills are enacted in larger, more developed states. There will certainly be opportunity in Mexico cannabis licensing, and the time to start preparing is now.

So, again, the question is, will you be ready to take on the opportunities in the Mexico cannabis market? If so, contact us!

Is Oaxaca Leading on Mexican Cannabis? on Harris Bricken Sliwoski LLP.