Cannabis activities are regulated by federal law because cannabis is a medical supply and a controlled substance.
As a first source of regulation, Article 4 of the Constitution of the United States of Mexico (the “Mexican Constitution”) is the basis of the General Health Law. It grants the right of health protection and commands the legislative power to regulate the basis for health services.
Medical cannabis regulation has been driven by strategic health litigation to protect the right to health for patients on the basis of Article 4 of the Mexican Constitution.
The General Health Law was published in the federal Official Gazette. All activities related to cannabis were illegal until the General Health Law was reformed – this was due to a series of Supreme Court rulings which established the unconstitutionality of the absolute prohibition of consumption of cannabis.
On 19 June 2017, Mexico’s President published the Decree that reformed the prohibitionist legal framework of the General Health Law and the Criminal Code. This reform changed the legal conception of cannabis, recognising the therapeutical and industrial uses of cannabis that contains less than 1% of tetrahydrocannabinol (THC), the psychotropic element of the plant.
This Decree also orders the Health Ministry to issue the rules for the authorisations of import and export of narcotic drugs, psychotropic substances, products, preparations or pharmacological derivatives of cannabis to drug stores that sell to pharmacies, the establishments that elaborate these preparations, as well as the establishments meant to produce medicines authorised by the Health Ministry.
Another important order contained in this Decree is the one that obliged the Health Ministry to realign the existing legal framework within 180 days for the therapeutic use of THC of isomers â6a (10a), â6a (7), â7, â8, â9, â10, â9 (11) and its stereochemical variants.
However, in practice, the Health Ministry did not realign the rules for the therapeutic use of THC within the 180 days that the Decree stated.
One of the most important precedents which are sources of regulation is the case of a young person that was born prematurely and with asphyxia, which results in severe and permanent repercussions derived from hypoxic-ischemic perinatal encephalopathy, namely: severe neurological damage, motor disability, visual debility with exotropia, hyper-reflexive spastic quadriparesis, an epileptic generalised condition that was diagnosed as West Syndrome, cyclic neutropenia, immunodeficiency and constant status epilepticus.
After eight years of intensive care treatments, and with pulmonary hypertension and cardiomegaly now diagnosed, the minor’s neurologist prescribed him a pharmacological cannabis derivative oil to reduce the time spent at intensive care and the quantity of prescribed medication.
The treatment response of the minor was positive, resulting in him not having a status epilepticus for almost two years, and allowing him to go to school for the first time at the age of 13. However, due to the nature of the epilepsy, he acquired a certain tolerance for CBD, so he was prescribed a substitute medication with 0.3% of THC. Nevertheless, the regulations for the therapeutic use of cannabis with less than 1% of THC were not published within the 180 days that the decree of 19 June 2017 stated.
Consequently, the minor’s legal representative filed a Constitutional Trial (Juicio de Amparo) against the Health Ministry for not publishing the regulations for therapeutic use of cannabis with less than 1% of THC.
The Constitutional Trial was registered with No 57/2019. It was revised by Mexico’s Supreme Court of Justice on 14 August 2019, with the ruling that the Ministry of Health is obliged to regulate the therapeutic use of THC within 180 days. Nevertheless, the Ministry of Health did not comply with the ruling, arguing a suspension of the term caused by the COVID-19 pandemic.
After several breaches of the legal terms ruled by the Supreme Court and extensions granted by the Judicial Power, on 12 January 2021 the Regulations of the General Health Law for the Sanitary Control for the Production, Research and Medicinal Use of Cannabis and its Pharmacological Derivatives (Reglamento de la Ley General de Salud en Materia de Control Sanitario para la Producción, Investigación y Uso Medicinal de la Cannabis y sus Derivados Farmacológicos) was published in the federal Official Gazette, creating the legal framework for different activities related to the medical use of cannabis.
The main laws and regulations are:
The Ministry of Health (Secretaría de Salud) is in charge of regulation, control and health promotion, among the other obligations stated by the General Health Law. A few important examples are listed below:
The remedies available when the authorities enforce sanctions set in the General Health Law are:* (i) administrative appeal (Recurso de Inconformidad); (ii) nullity claim (Juicio de Nulidad); or (iii) a constitutional trial (Amparo).
The Mexican Food and Drug Agency (Comisión Federal para la Protección contra Riesgos Sanitarios, COFEPRIS), the Mexican Sanitary Authority, has the following responsibilities:
The remedies available when the authorities enforce the sanctions set in the General Health Law, are as above*.
The Agriculture and Rural Development Ministry (Secretaría de Agricultura y Desarrollo Rural, SADER) has the following responsibilities:
The remedies available when the authorities enforce the sanctions set in the General Health Law are as above*.
The National Service of Healthcare, Safety and Agro-food Quality (Servicio Nacional de Sanidad, Inocuidad y Calidad Agroalimentaria, SENASICA) has the following responsibilities:
The remedies available when the authorities enforce the sanctions set in the General Health Law are as above*.
The National Service of Inspection and Certification of Seeds (Servicio Nacional de Inspección y Certificación de Semillas, SNICS) has the following responsibilities:
The remedies available when the Authorities enforce the sanctions set in the General Health Law are as above*.
The Ministry of Economy (Secretaría de Economía) has the following responsibilities:
The remedies available when the authorities enforce the sanctions set in the General Health Law are as above*.
The Tax Administration Service (Servicio de Administración Tributaria, SAT), an agency of the Ministry of Finance and Public Credit (Secretaria de Hacienda y Credito Publico, SHCP), has the following responsibilities:
There are no specific self-regulatory cannabis authorities or organisations. However, as we are discussing medical cannabis, there are organisations that have issued codes of conducts for the pharmaceutical industry.
The Council of Ethics and Transparency of the Pharmaceutical Industry (CETIFARMA) is an independent managing agency in charge of drafting, promoting and monitoring the fulfilment of ethical codes, auto-regulation and auto-control instruments, for example:
However, these codes are only obligatory for members of the organisations that issue the self-regulatory instruments.
The Medical Cannabis Regulations set out that medicines with cannabis as an ingredient shall only be pharmaceutical products. Therefore, magistral preparations medicines are forbidden and a patient cannot attend a dispensary to request specific preparations, nor can a business, doctor or person produce magistral preparations for specific patients.
Any party interested in the medical cannabis industry shall comply with the high-level regulatory standards for research, development, manufacture and, in summary, dealing with this level of regulation, the infrastructure requirements, the high investment needed, and technical capabilities and experience are the most important challenges that interested parties must deal with when undertaking any kind of activity that involves medical cannabis.
As cannabis is a controlled substance, there are also complex and extensive procedures and technical requirements related to sanitary authorisations, permits and certificates that have to be fulfilled in order to operate in the medical cannabis industry, in order to guarantee the traceability of controlled substance.
The medical cannabis regulatory regime is very complex. Cannabis is considered as a medical supply and contains a psychoactive substance. Therefore, the Medical Cannabis Regulations guarantee the traceability, security, quality control, physicochemical analysis for medical cannabis and must follow the pharmacological regulations.
The Regulations of the General Health Law for Clinical Research, and the Official Mexican Rule NOM-012-SSA3-2012, set the criteria for ethics and methodological practices for medical research for human beings.
The Official Mexican Rule NOM-164-SSA1-2015 works as the minimum requirements for manufacturing pharmaceutical medicines, and for pharmaceuticals on development destined to medical research.
The General Health Law and the Regulations for Health Supplies set the procedures for pharmaceutical pre-market approvals with the support of the New Molecules Committee, the auxiliary body that advises the Mexican Food and Drug Agency on the approval of requests related to medicines or health supplies.
The Regulations of the General Health Law set the legal framework for advertisement for medicines, which shall be only directed to health professionals.
The specific legal framework for medical cannabis is beginning to take shape. Medical and pharmacological investigation regulations are in force, providing a robust landscape of regulations and precise procedures to comply with in order to be part of the medical cannabis industry. However, the administrative authorities still need to align their legal framework for full access to medical cannabis in Mexico.
Violations and Sanctions
Companies must be cautious: if the legal procedures regarding sanitary authorisations to produce medicines or any pharmacological derivatives and the handling of controlled substances are not followed correctly, the company, its legal representative, employees or private persons may incur a public health sanction or even be guilty of a criminal offence. For example:
Black Market and Unfair Competition
Another important point to consider is the current discussion that is taking place at Mexico’s Bicameral Congress with regard to the recreational use of cannabis. It contemplates the possibility for any legal age person to request a production permit for the recreational use of cannabis, allowing them to plan up to eight cannabis plants at their domicile.
Any such legal framework would be a success for the regulation of recreational cannabis in Mexico. However, it would represent a risk for the medical cannabis industry, which is obliged by the Medical Cannabis Regulations to abide by high regulatory standards.
The aforementioned, because it allows people to produce cannabis-derivative products with no control and quality standards, may result in illegal activities and expand the black market for cannabis products. It may be that therapeutic claims will be made by informal producers creating cannabis derivative products and non-compliant "medicines".
As well as compromising the medical use of cannabis by side-stepping the professional manufacturing practices that guarantee safety and consistent quality, such an illegal market would jeopardise human health owing to the consumption of non-regulated cannabis derivatives or "medicines".
SENASICA supervises compliance with the regulations on a continuous basis, taking into account new scientific information regarding cannabis. At any moment, it may review the granted permits and modify its conditions, modify its terms, suspend its effects or revoke it.
COFEPRIS performs surveillance and enforces compliance with regard to the quality control of the laboratories, quality systems, personnel, infrastructure and the general conditions of the operations.
It can suspend, partially or totally, the company's activities if they represent any risk for people's health. Also, it may secure and destroy products if they do not fulfil the required specifications.
The administrative penalties that COFEPRIS may apply are the following:
Tax Administration Service
The Tax Administration Service may perform various monitoring activities for the surveillance of the fulfilment of the tax regulation, for example:
Derived from any of the verification faculties listed above, the Tax Administration Service may execute any of the sanctions stated in Mexico’s federal Fiscal Code, such as:
The Attorney General's Office (Fiscalía General de la República)
The Attorney General's Office oversees the investigation of crimes and the clarification of facts. Is the authority in charge of receiving the complaints or disputes with regard to any crime. Its responsibilities include:
Raw materials, pharmacological derivatives and medicines containing cannabis that are imported to Mexico or exported from Mexico must comply with local standards and specifications.
All certificates, authorisations or any legal document to import products that prove the species, quality, quantitative data of components and traceability of cannabis according to the regulation of the country of origin shall be apostille.
SENASICA oversees setting the rules and international recommendations for pest control when import or export are executed.
Mexico is a state member of the United Nations and the International Narcotics Control Board and adheres to the 1961, 1971 and 1988 Conventions. It is important to be aware of these international law instruments.
The timeframe set in the Medical Cannabis Regulations for issuing internal and secondary rules for the federal authorities is the first barrier for companies that want to get, for example, a new tariff code issued to import or export raw materials, pharmacological derivatives or medicines containing cannabis.
On 12 January 2021, the date that the Medical Cannabis Regulations were published, a 90 working days' term was set for the Agriculture and Rural Development Ministry to harmonise its internal and secondary rules for the fulfilment of the Medical Cannabis Regulations. However, as with previous term extensions to regulate cannabis, the authorities found it difficult to comply with the terms set for them.
In order to approve a new medicine, COFEPRIS shall request that the new drug undergoes several analyses and tests (reference tests, biocompatibility, etc); the methods to test the different kinds of drug are set in the United States Pharmacopeia. The medical cannabis industry must have in mind that cannabis medicines need to be included in this normativity.
Further, it is necessary that authorities such as the Economy Ministry settle the particular tariff codes for the corresponding products, the Federal Regulatory Improvement Commission (COFEMER) assist COFEPRIS and SENASICA to issue the format and processes to create the permits and licences and, in general, for all the authorities involved to adjust their internal regulations within 90 days from 13 January 2021.
Mexico’s current legal framework does not regulate any use of cannabinoids in food and there are no changes contemplated for this matter in the foreseeable future.
Cannabis and cannabinoids are only permitted in medical use or industrial use when the THC is under 1%. All food-related products containing cannabis or cannabinoids are forbidden.
Mexico’s General Health Law sets the legal amount of cannabis a person can possess – up to 5 g per person (of a legal age) – however, the rules for the legal acquisition of seeds or for the production of cannabis are not published yet.
THC over 1% for industrial products is forbidden by the General Health Law and may be sanctioned as drug dealing by the Federal Prosecutor’s Office, with prison time of between four and eight years if the quantity is less than 5,000 g of cannabis, and there is no proof to suggest it is an organised criminal activity.
The possession of less than 5,000 g of cannabis with intent to supply is forbidden, with sanctions of between three and six years of prison and a fine of 80 days of minimum wage, if there is no proof to suggest it is an organised criminal activity.
Mexico’s Supreme Court of Justice had previously decriminalised cannabis through issuing a binding jurisprudence in October 2018, which states that all federal judges are obliged to apply the criteria that the Supreme Court of Justice has recognised, considering the personal use of cannabis as an exercise of the human right of free development of personality ("libre desarrollo de la personalidad”).
However, as there is no regulation in force with regard to recreational use of cannabis, the only way to exercise that human right is filing a constitutional protection trial (Amparo), which culminates in a federal judge ruling, allowing the interested person to grow, possess and transport cannabis in a reasonable amount for personal use within the legal limits.
These rulings are precedent for the declaration of unconstitutionality of the prohibition of cannabis stated in the General Health Law, forcing the legislators to allow recreational, medical use of cannabis and its decriminalisation.
Therefore, Mexico’s Deputies have recently discussed the legislation project for the regulation regarding the recreational use of cannabis.
The minute circulated in the Deputies Chamber contemplated the activities related to cannabis for its production, storage, commercialisation, consumption, growing, distributing, packaging, labelling, import, export, research, transform, transport, selling, buying and the recreational use of cannabis.
If approved, this new legal framework will allow people over the age of 18 to grow up to six cannabis plants for personal and recreational use, or up to eight cannabis plants if more than one adult person resides at the same house.
The activities above require a special permit issued by the National Commission Against Addictions.
Also, cannabis associations are regulated, allowing up to 20 people to associate with the purpose of producing cannabis or its derivatives for recreational use by its associates.
Moreover, the initiative project does not decriminalise completely some aspects of cannabis. There are still prohibitions that may incur a corporal penalty – ie, if a person grows or harvests marijuana plants with a different purpose of personal use and without the correspondent authorisation, this person shall be sentenced to imprisonment for a term of one to six years.
Finally, the rules for the commercialisation of cannabis for recreational purposes are set at this project, establishing different kind of licences for the various activities related to the production chain for the recreational use of cannabis.
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Medical cannabis regulation has always been a very controversial topic in Mexico due to the historical prohibition of cannabis and hemp, a policy strongly influenced by conservative worldviews, leading to a war on drugs that has had severe consequences for the people in the country.
Over the last years, we have witnessed how the regulation of medical cannabis has developed in Mexico, not only as a result of the pressure of private and international organisations but also jurisdictional procedures which derived from the 2019 ruling by which the Mexican Supreme Court mandated the agencies to regulate in medical cannabis matters.
Without a doubt, over a long period there has been a lag in regulation for medical cannabis in Mexico. Increased globalisation, the recognition of the human right of free development of personality and, especially, the advances in science have demonstrated the benefits of medicinal cannabis in patients with certain diseases or with high levels of pain.
Mexico is addressing this evolution on several fronts, which may in future transform the way certain medicines and products are marketed and made available to patients in the country. Changes to regulation are being made on different levels, from the legal reform of both the General Health Act (LGS) and Federal Criminal Code to the entry into force of the regulation of the LGS on sanitary control for the production, research and medical use of cannabis and its pharmacological derivatives.
Background of Cannabis Legalisation in Mexico
The evolution of the legalisation of medical cannabis in Mexico has been a long process, including jurisdictional procedures to allow the importation and use of medicines with cannabis content. The “Grace case” was initiated by the father of Graciela Elizalde Benavides (“Grace”), a child born in Monterrey, who suffers from Lennox-Gastaut Syndrome, a particularly dangerous form of epilepsy that causes constant convulsions and spasms, besides delaying her general development. This case finalised with the ruling of a federal judge ordering the Federal Commission for the Protection against Sanitary Risks (COFEPRIS) to authorise Grace to import, carry and use the medicine called Epidiolex.
Another paradigmatic case was the "SMART case", relating to the Mexican Society for Responsible and Tolerant Personal Use (SMART), in which recreational use of cannabis – including sowing, cultivation, harvesting, possession, transport and use or consumption without harming third parties and without marketing – was submitted to the analysis of federal judges. In conclusion, the Supreme Mexican Court (SCJN) determined the unconstitutionality of articles of the LGS and granted federal protection to the four plaintiffs in December 2015; as a result, the plaintiffs were granted with the corresponding permits by COFEPRIS.
After these cases, a national debate on legalisation of cannabis was initiated and different forums were set up with topics such as public health and prevention, ethics and human rights, economic and regulatory aspects as well as citizen security.
Reform to LGS and the Federal Criminal Code
The reform to the LGS and the Federal Criminal Code, published in the Official Gazette of the Federation dated 19 June 2017, stated the following:
These modifications to the LGS established that the Ministry of Health would have 180 days after its entry into force to harmonise the regulations and norms in the therapeutic use of cannabis – in other words, to issue a new regulation on medical cannabis.
Regulations on Medical Cannabis
On 12 January 2021, the Ministry of Health issued and published in the federal Official Gazette the regulations of the LGS on sanitary control for the production, research and medical use of cannabis and its pharmacological derivatives, entering into force one day after its publication.
These regulations make Mexico one of the largest markets in the world to have a fully legalised medical cannabis supply chain. According to this new regulation, the primary focus is on cultivation of cannabis for research and manufacture of pharmaceutical or pharmacological products. The regulation allows for public and private research, setting forth measures related to quality control and good manufacturing practices.
The main purpose of the regulations on medical cannabis is to regulate the control, promotion and sanitary surveillance of raw materials, pharmacological derivatives, cannabis medications, research and manufacturing purposes. The regulations also establish:
The issuance of the regulations will have significant implications in the development of the industry pertaining to cannabis and its derivatives. It is expected that the regulations will positively impact the pharmaceutical, products, agrarian and social sectors.
The Mexican Market
Mexico currently has a population of approximately 130 million people, and this is expected to rise to 150 million in 2030. Mexico is one of the top 15 economies worldwide, and it is part of the United States–Mexico–Canada Agreement (USMCA) on trade. Mexico is perceived as a crucial link between North America and the Latin American countries, thereby representing a good opportunity for commerce in the region.
The size of the medical cannabis market in Mexico was valued by different specialists at USD47.3 million in 2018. The growing adoption of medical cannabis for the treatment of chronic conditions such as cancer, neurological diseases and chronic pain is a key factor expected to influence in the accelerated growing of the market.
With the legalisation of the medical use of cannabis and the expectation of the legalisation of recreational use for the second half of this year, the growing of the local market is more than evident. Currently, most cannabis is sold through illicit channels; to curb this black market, the government is expected to legalise it. This will help in monitoring products that enter the market, and at the same time provide the benefit of taxes levied on these products.
Medical cannabis has emerged as one of the most lucrative businesses to venture into Mexico because of both the large population and the number of patients eager to receive this kind of medicine to treat different diseases. The potential benefits of cannabis medicines in the treatment of cancer have been demonstrated in clinical studies, consequently increasing its demand.
Unfortunately, the high prevalence of cancer cases in Mexico could be one of the factors helping to increase the local market. According to WHO (see Global Cancer Observatory data), in 2018 190,667 new patients in Mexico suffered from cancer. The growing incidence of disease and increasing adoption of cannabis for medical use are expected to drive product demand in the following years.
Trends and Developments
As a result of the issuance of the regulations on medical cannabis, Mexicans seeking permits for the cultivation of cannabis for medical purposes will need to register with SENASICA, which will create a national registry of cultivators.
Further, doctors who want to prescribe cannabis medicine need to be registered before COFEPRIS; such medicines will be distributed through pharmacies. Mexico’s legislation also creates rules for products that can be imported and exported.
The new medicinal rules state that companies which wish to carry out research have to obtain permission from COFEPRIS, and this research has to be undertaken in strictly controlled, independent laboratories. The regulations do not allow patients to grow their own cannabis plants – they are aimed at pharmaceutical companies which produce pharmaceutical derivatives of cannabis, which are classified as controlled substances and require a prescription.
Additionally, the legalisation of recreational cannabis in the second half of this year is expected to substantially reduce illegal drug trafficking and shift the business to legal entrepreneurs. This will allow planning, regulation and implementation of strategies, thus improving market potential in Mexico. Due to the imminent legalisation of cannabis, many large foreign companies have started acquiring smaller firms in the country which produce or commercialise medical products and may be interested in entering into the cannabis industry.
Expectations on Medical Cannabis
It is expected that medical cannabis licensing will be generally available in the middle of 2021. Companies or persons that are thinking of securing a Mexico medical cannabis licence must first incorporate an appropriate Mexican business entity to own their licences.
It is important to consider that 2021 is an election year in Mexico, and politics could influence the legalisation of recreational cannabis and the implementation phase of medical cannabis. In this sense, if Mexico legalises recreational use during this year, the regulations will split cannabis into two tracks: one for products with less than 1% THC and one for products with greater than 1% THC.
There is also a wider movement to decriminalise the use of psychoactive substances and to reinforce their prevention, thereby seeking to reduce the alarming level of violence in Mexico, and to separate the market for soft drugs from that of hard drugs.