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This article is written by Nishtha Garhwal, from Alliance School of Law, Bangalore. This article talks about the recent reforms that have been made to the cannabis legislation in Mexico and analyze the economic and other effects created by this.

Introduction

As soon as President Andres Manuel Lopez Obrador entered the office, a strategy known as ‘Abrazos, no balazos’, that is, ‘Hugs, not bullets’ was implemented by him. The strategy seeks to address and tackle the issues of social inequality and poverty as a way to decrease the instances of drug-related violence. On 10 March 2021, the lower house of Mexico, that is the House of Deputies passed a bill in order to legalize the use of Cannabis for recreational purposes. The Bill that was passed with 316 votes in favor and 129 votes against, in its current version, legalizes cannabis utilization but in a partial way and it seeks to undertake the responsibility of regulating the production, distribution, and possession of Cannabis. The Bill seeks to make Mexico the largest national recreational market of cannabis in terms of population. However, the legislation has come into the picture after several years of the Supreme Court ruling to make cannabis use legal in the country and this would make Mexico the third country to legally regulate cannabis after Uruguay and Canada.

The Bill was sent to the senate in order to get the final approval. The debate on the Bill was postponed by the Senate majority leader Ricardo Monreal until September 2021, particularly after the mid-term elections so that some unspecified changes can be made to the Bill.

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The drug cartels that exist in the country are one of the main reasons why the Cannabis Bill was passed and the same was also cited by President Andres Manuel Lopez Obrador.

History of Mexico’s cannabis reforms

Following many countries, in the 1920s, the production and sale of Cannabis, also called Marijuana was banned in Mexico. The drug war of Mexico began in around 2006 after which 6500 Mexican army troops were dispatched by the then President Felipe Calderon to Michoacan. This was done in order to dismantle all the criminal cartels in the state. After over 14 years, the drug war still continues in Mexico and there is no end to it.

In around 2015, the path towards legalizing Cannabis utilization began in Mexico. This happened when the members of the Mexican Society of Responsible and Tolerant Personal Use (SMART) successfully made the Supreme Court of Mexico declare that the restriction that is imposed on the growth and recreational utilization of Cannabis is unconstitutional on the ground that it infringes the constitutional right to the free development of personality. With this initial ruling in November 2015, broad discussions were held not on whether cannabis should be regulated but on how to do so.

This was the initial ruling with regard to legalizing cannabis utilization and in the beginning, it was only applicable to the claimants. However, with this ruling, the doors were opened for many similar kinds of rulings. A precedent was set by these rulings which succeeded in bringing reform in the domestic law of Mexico. 

If we look at the 2019 statistics, more than 24,000 people were behind the bars for drug crimes in Mexico which constitutes about 12% of the population in the prison as per the National Institute for Statistics and Geography (INEGI). Among them, 40% were charged or convicted of simple possession of the drugs. 

In Mexico, if Jurisprudence has to be achieved, then five consecutive rulings on five different cases based on a single criterion must be delivered by the Supreme Court. The initial ruling regarding the unconstitutionality of the existing cannabis regulation was delivered in November 2015 and the fifth and final ruling was delivered in October 2018. After this, a notification was sent to the Senate and House of Deputies by the Supreme Court in order to modify the unconstitutional articles of the General Health Law of Mexico.

In 2018, it was ordered by the Supreme Court of Mexico that Congress must reform the law within 90 days by keeping the precedents in mind. The original schedule of the reforms was in 2019, however, as a result of the delay caused by the COVID-19 pandemic and several other reasons, the reform could not happen as per the schedule and thus, the deadline for its order was extended by the Supreme Court to April 2021.

After the legislation Bill was approved and signed by Congress, approval from the senate was still required in order to make it a law. Although the Bill had previously been passed by the Senate in November 2020, again the Bill was required to be voted on because of some changes being made by the lower house to the Bill. Although the members of the right-wing Institutional Revolutionary Party and Conservative National Action Party stood in opposition to the Bill, the Bill passed the senate so as to become law since MORENA, the party of President Obrador holds a majority in the senate. 

The drug war in Mexico

In December 2006, the drug war started in Mexico under the leadership of the newly elected right-wing President, Felipe Calderon. About 20,000 troops had been deployed by him across the country in order to fight and tackle the issue of drug cartels in Mexico. Dozens of the leaders of various drug cartels were captured or killed under the term of then President Felipe Calderon from 2006 to 2012.  After the completion of his tenure, the drug war was further continued by the successor of President Felipe Calderon, that is, Enrique Pena Nieto who shifted the focus of the government authorities from capturing the leaders of the drug cartels to a more holistic approach of decreasing drug-related violence. With more than 300,000 homicides since its beginning in 2006, the drug war has left a huge death toll. Even the military of Mexico had to face accusations of abusing human rights while fighting against the drug cartels.

The drug war in Mexico has created an opportunity for the growth of organized violent crime by increasing the profitability that can be obtained from the illicit cannabis market. 

This has led to widespread instances of corruption that interferes with the rule of law and it also leads to human rights abuse on a large scale. The American director at Human Rights Watch, Vivanco asserted that the cannabis legislation would not be able to respond to these problems on its own, however, it symbolizes a vital step ahead towards the adoption of alternative approaches to the drug policies. 

Although the end of the drug war in Mexico was declared by President Andres Manuel Lopez Obrador, there have been many instances of cartel violence in the country in the recent few years. The current Bill has the potential to broadly serve as a crucial step in the re-evaluation of the Mexican approach towards drug policy. It will also address the issue of countless human rights abuses along with the widespread corruption that has been happening in the country. 

It has been argued by President Obrador that the legislation has the capacity to combat drug-related violence in the country and can also improve security in Mexico. Even the backers of President Obrador believe that the influence of the powerful and influential drug cartels that control the lucrative drug trade of the country will wane. 

Cannabis reform legislation

Initially, when the Supreme Court ruled that the criminalization of the cultivation and utilization of cannabis is unconstitutional, it kept a deadline for the lawmakers to reform the laws related to cannabis regulation in Mexico and the initial deadline could not be met. Later, at the lawmakers’ request, the deadline was extended to April 2020, subsequently to December 2020, and finally to 30 April 2021. However, the authorities were unable to meet even this deadline though progress in drafting and advancing the cannabis legalization legislation had been made.

The recent reform to cannabis regulation in Mexico has been viewed as a broad reform so as to create Mexico as the largest legal market of cannabis in the world. Finally, President Andres Manuel Obrador signed the new cannabis legislation. 

Primary objectives of the legislation

The main focus of the new legislation is on the cultivation of cannabis for either research or for the manufacturing of pharmaceutical or pharmacological products. The permission to conduct public and private research has been granted by the legislation and in addition to it, provisions for quality control measures including good manufacturing practices have also been laid by it. 

Since Mexico is the world’s second-largest illegal producer of cannabis and has been one of the most harmed countries by the prohibition of cannabis utilization and cultivation, the new legislation seeks to have some specific objectives. One among them is to free the resources of the state that had to be badly utilized for the purpose of implementing the prohibitions and to enhance social justice. 

Provisions under the legislation

  • Anyone who is over 18 years of age can possess and consume cannabis up to 28 kg as per the current Bill of cannabis regulation. In addition to this, such a person can also make an application for a license in order to grow up to six plants of cannabis at home for its personal utilization.
  • And also, if they wish to form a ‘Cannabis Association’, a license can be obtained for that. In one cannabis association, there can be up to 20 members who are allowed to grow and share cannabis for their personal utilization. 
  • Companies or individuals who are interested in growing cannabis for commercial purposes can also apply for the license. The legislation also permits any pharmaceutical companies that wish to initiate any medical research on cannabis-containing products can do so. 
  • The new medical rules state companies who wish to conduct any research need to obtain permission from the Mexican health regulator, that is, Federal Commission for the Protection of Sanitary Risk (COFEPRIS). Such research needs to be conducted in laboratories that are strictly controlled and are independent. 
  • Even the doctors that are interested to practice cannabis-containing medicines can do so provided they have registered themselves with COFEPRIS. Through pharmacies, these cannabis-containing medicines will be distributed. 
  • The new legislation has also set rules regarding the sowing, cultivation, and harvesting of cannabis for medical purposes and this would permit the businesses to legally grow cannabis in Mexico.
  • The legislation also created rules for cannabis containing products that can be exported or imported. The legislation has set the limit for the cultivation of cannabis for the purpose of commercial utilization at one hectare outdoors and 1000 square meters indoors.

Some notable features of the legislation

  • The legislation Bill also proposed to establish the Institute for the Regulation and Control of Cannabis which is a body having positive potential and if the proper utilization of this body happens, it will act as a wheel to drive responsible regulation in an emerging legal framework. This body has also been granted discretionary powers by the Bill. However, the extent of the impact that this body can create depends greatly on the nominating leadership that is prepared for understanding the plant in itself as well as the regulated markets and prioritizing the mechanisms of social justice.
  • The citizens of Mexico, as well as the foreigners, are allowed to travel in Mexico along with their products, thus, thereby opening the door for legal medical cannabis tourism which is also one of the deliberate objectives of the legislation.  Similar kinds of opportunities for medical cannabis legislation were created by Thailand the previous year after they issued a medical cannabis regulation. 
  • The proponents of the Bill believe that the legislation will prove to be helpful in reducing the influence of the powerful and influential drug cartels in Mexico. One of the deputies who have voted for the Bill in the House of Deputies, and who is also a member of the left-wing Morena party of President Andres Lopez Obrador, Sandra Simey Olvera Bautista has said that with the passing of this new legislation, the false belief that cannabis forms a part of the serious health issues in Mexico is left behind. 

Frequent instances of violence, overcrowding, lack of medical care, and lack of access to basic facilities have been faced by the detainees in the prisons of Mexico. In addition to this, they have been exposed to abuses by the staff of the prison. 

The new bill of cannabis regulation would permit the state and federal prison officials to release any person who has been charged with or convicted of any offense that has been decriminalized by the new reform Bill. Thus, the Human Rights Watch contended that as soon as the Bill became effective, identification of all such eligible people must be made by the authorities and their release should happen immediately and automatically without the requirement of the detainees or their families to formally apply for their release.

Human Rights Watch’s stand on the legislation

The director of America at Human Rights Watch, Jose Miguel Vivanco, asserted that the cannabis regulation that has been existing in Mexico has led thousands of people to be behind the bars for simply possessing marijuana. The restriction that was imposed on cannabis has had disastrous costs for human rights in Mexico. A lot of people were exposed to serious abuses at the hands of the police. 

As far as human rights are concerned, a huge step would be taken ahead if cannabis is legalized and the American director at Human Rights Watch also contended that there shall be no postponement of the reform. 

Necessity of the Bill

It must be noted that the bill contains some provisions which are unnecessary and the people are exposed to abuses even under the new legislation because of such provisions. As said by Human Rights Watch, it would still remain a criminal offense if an individual possesses more than 28 kg of cannabis for personal utilization and not for distribution. Depending upon the amount of cannabis such a person is holding, they will have to face imprisonment of 3 years or a fine of $22,000. If it is suspected by the police that an individual possesses more than 28 kg of cannabis, such a person can be detained for up to 48 hours by the police, and later they can be turned over to the public prosecutors. In addition to this, if a person obtains a license for growing cannabis either at home or by forming a cannabis association, they must allow the officials of the government to inspect their homes so as to verify and ensure that all the terms of the license are being complied with. 

There are frequent instances of people being tortured, abused, and extorted by the Mexican police. Many people are detained irrespective of whether a crime has been committed by them or not. Recently, a survey was conducted by Mexico’s Statistical Agency, that is, the National Institute for Statistics and Geography (INEGI). It was conducted on the detained people and it showed that nearly two-thirds of the detainees have been beaten or hit by the police authorities during the period of arrest. About more than a third were choked or waterboarded and about a fifth, electric shocks were given. 

The Human Rights Watch asserted that if the possession of drugs for personal utilization is criminalized, then it would infringe the principles of autonomy that underlie all rights. Thus, the Human Rights Watch contended that the Cannabis Bill must be amended in such a way that it completely eliminates the treatment of the simple possession of cannabis as a crime from the Mexican law. This would be helpful and effective in reducing the risk faced by the users of abuse at the hands of the police. 

The Human Rights Watch also gave a stand that it must be ensured by the Mexican President Andres Manuel Lopez Obrador that the provisions of inspection are enforced in such a way that no one is exposed to unnecessary or disproportionate punishments in order to ensure that human rights of the people are not violated. 

The system of licensing that has been proposed for producing, processing, distributing, and selling cannabis legally has the potential of creating new opportunities economically. It must be ensured by President Lopez Obrador that the provisions that have been laid by the bill are carried out in a manner that is inclusive in nature. It should allow the economically marginalized population as well as the rural communities which are present in the areas where cannabis cultivation has been traditionally taking place to participate fully and get benefit from the new regulated system. 

A few years back, governments around the world have been called by the Human Rights Watch in order to reassess the policies with respect to drugs in their respective countries because of the high human rights costs incurred in the global war on drugs. 

Economic effects

The foreign cannabis companies, especially those from Canada and America have been looking at Mexico with interest. Many of the people who planned investment decisions in Mexico had delayed doing so as there was policy uncertainty and they were waiting for the publication of the final regulation. The reforms that were brought by the legislation would lead to Mexico becoming the world’s largest market of Cannabis by the size of the population with at least $3.2 billion worth of an annual demand. It would be ahead of Canada and Uruguay. The legislation has the capacity to bring hundreds of millions of people under the tax slab and if we look at it theoretically, it would generate a significant amount of jobs in Mexico.

As far as the economy is concerned, there is one hindrance. If we look at the statistics from 2016, only 2.1% of 12 to 65 years old people had made use of Cannabis in the last year, that is, 2015. Due to the low demand for drugs in Mexico, the potential that the cannabis legislation has is likely to get tempered. Therefore, if we consider the short to medium term, the potential which is implied by the 127.6 million population of Mexico, the legal cannabis market is not likely to live up to that potential. However, if we consider the long term, the rise in consumption and value of the market can be expected. 

The people who have criticized the Cannabis legislation Bill have argued that due to a lot of barriers to entry into the market, the Bill is more likely to favor the large agri-business firms over the small producers of Cannabis like the impoverished farmers and the indigenous groups. For instance, it is a requirement by the Bill that the commercial producers of cannabis must strictly adhere to the strict regulations on the packaging of cannabis-containing products. In addition to this, the Bill also makes it mandatory to obtain a separate and annually renewed license for producing and selling cannabis.

The utilization of approved seeds is required by the Bill and it also limits the amount of Tetrahydrocannabinol (THC) that the cannabis plants, as well as the products, can contain. Thus, as had happened in countries like Colombia, such regulations are likely going to lead to the sidelining of the small domestic producers by the large firms.

Could the legislation combat drug related violence and crime

Since we now know that a lot of barriers are imposed on the small producers of cannabis by the legislation, the Bill is less likely to prove effective in reducing the rate of crime or ending the war of Mexico on drugs. As a result of being left out from the legal market of cannabis, it is more likely possible that the small producers indulge in growing cannabis for the illegal markets, and because the competition is enhanced after the legislation, they may start growing more opium poppies and also indulge in other illicit activities in order to make both the ends meet. 

It is required by the legislation that the individuals and groups should register themselves and they are exposed to face the possibility of inspection at any time. If the inspection is refused, then it will be a ground for a fine and their license could also be suspended. Thus, the terms of the legislation are so that it may discourage the legal growth and production of cannabis. 

Effect of the Cannabis legislation

As these inspections infringe privacy, it is probable that some people will prefer not to register in order to avoid these inspections and grow cannabis illegally. The people who have criticized the Bill have also warned that as the Bill gives the potentially corrupt authorities power to inspect over private citizens, the Bill could put the people at the risk of extortion and other abuses. 

The effect that the cannabis legislation aims to have on the criminal drug cartels is likely to get affected as the cartels have turned away from growing cannabis at an increasing rate. Because of the legal growth and trade of Cannabis in Canada and parts of America, more and more drug cartels are moving towards growing methamphetamine and opioids such as fentanyl for revenue. 

The activities of the cartel are more likely to get enhanced as a result of the legislation and there may be instances where the cartels may seek an opportunity to engage in money laundering or investment in the legal market. This may also lead to these cartels threatening dispensaries, especially in those cities which are affected by gang violence and thus, acting as an inhibitor in the growth of the legal cannabis market. 

A positive impact on crimes would be created by the legislation. The reforms would help in reducing the number of arrests and charges imposed for the possession of drugs as now the amount of legal cannabis that a person can hold has been increased by the legislation. 

The legislation is likely to be beneficial for the young population as the 2018 statistics show that about 80% of the Mexican adolescents were arrested for the possession of drugs and particularly, possessing cannabis. The legislation would enable the police to divert its focus on more serious crimes and keep the youth of Mexico out of the prison bars.

Conclusion

The legislation is less likely to have a substantial impact on the rate of crime in Mexico, however, it is likely to bring an economic boom. After decades of violence that had been happening between the drug cartels and the authorities, the new legislation would finally permit the legal cultivation of cannabis on the soil of Mexico.

Despite the fact that the cannabis legislation would not be able to put an end to the drug cartels in the country, it will help in decreasing the number of unnecessary criminal charges that are put on people for possessing drugs. The Mexican legislation that legalizes the utilization of cannabis by the adult population has opened the gate to create Mexico as the largest legal cannabis market across the globe. It would also give a boost to the employment generation in Mexico and would lead to the country’s economic growth over the medium to long term. The regional level is likely to have the biggest impact on cannabis legislation and it will leave the USA being sandwiched between two neighboring countries to the north and the south that have legalized the use of cannabis by enacting the forms of federal cannabis legislation. In addition to this, these neighboring countries have also created provisions for the regulation of cannabis commerce. This is likely to enhance the debates on the federal cannabis legislation in the United States of America.

Thus, the legislation is less likely to be helpful in reducing the instances of crime or drug-related violence, rampant corruption, or cartel violence in Mexico. However, it could lead to less strict regulation with respect to cannabis in the United States of America.

References

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