Mexico: first permits to market cannabis-derived products

Last year, Mexico amended its General Health Law to legalize the therapeutic and industrial uses of cannabis. Psychoactive cannabis is restricted to medicinal or scientific use and remains strictly regulated, but non-intoxicating cannabis compounds, including CBD can be included in everyday health products such as food, beverages, certain medications, or cosmetics. Mexican health authorities have therefore just approved 38 cannabis-derived products that will soon be available over the counter.

Legalization in Mexico

Medical cannabis is which became legal last June after the bill has been approved by the Mexican Congress and confirmed by presidential decree. The decree specifies, furthermore, that cannabis-derived products with a THC content below 1% may be sold, exported, and imported, provided they have been authorized by the competent health authority, the Federal Commission for Protection against Health Risks (COFEPRIS), which is responsible for granting licenses:

• for the cultivation of cannabis containing more than 1% of THC. This is permitted exclusively for therapeutic or scientific purposes. Medicines produced under this type of license are dispensed exclusively by prescription from a doctor.
• for the sale of cannabis-derived products such as cosmetics, dietary supplements, and beverages. These products are available over the counter. However, industrial licenses do not cover the cultivation of cannabis; producers must import the raw material or finished product from abroad.
• COFEPRIS does not have the authority to issue licenses for recreational cannabis.

Raul Elizalde, president of HempMeds Latin America, explains that the regulations give entrepreneurs the freedom to include CBD in everyday health products in any amount. «One of the good things about these regulations is that in Mexico, any product containing more than 1% of THC can still be registered with the government and sold by prescription, but what’s even better is that, as long as the 1% THC limit is respected, cannabis can be included in any product—medicines, supplements, lotions, food, anything.».

«This is very, very good for our country, and I think we’re one of the first countries in the world to take this path,» adds Raul Elizalde. The legal status of CBD is, in fact, unclear in many countries. In France, the lack of regulations and legal information regarding its sale has led to a standoff between the authorities and business owners. In some places where CBD is legal, it is not always available for sale in all its forms. In California, For example, it cannot currently be sold as a dietary supplement.

The Emergence of a New Market

The regulations governing the sale of cannabis-derived products were expected to be ready by early 2018 but were not officially published until October 30. Having had access to the initial text, the companies were already prepared and in compliance. Seven of them have obtained licenses for their products. Twelve other license applications are still pending approval and are expected to be processed in the coming days. In total, there are 38 products approved by COFEPRIS and ready to be sold on the Mexican market within the next five weeks. Among the products are 21 dietary supplements, 9 cosmetics, 6 food products, and two «raw materials» in the form of oil.

The @SSalud_mx, through the @COFEPRIS, announced the first release of 38 products with #Cannabis and their derivatives, which do not contain THC or cause psychoactive effects, will be available on the Mexican market starting in the next five weeks @SSalud_mx @sanchezytepoz pic.twitter.com/3ShPJ0LoD2

— COFEPRIS (@COFEPRIS) November 21, 2018

Among the companies that have obtained a license, 3 are Mexican, 3 are American, and 1 is Spanish. The Mexican companies are CBD Life, Endo Natura Labs and Farmacias Magistrales. The latter is the only company to have obtained COFEPRIS’s approval to manufacture THC-based medications. The agency’s director, Julio Sánchez y Tépoz said : «This is a historic day for Mexico (…) [which] is entering a global market that generates significant profits.».

The market for cannabis derivatives is estimated to be worth more than $31 billion in 2021, with 80% of the market located in North America. In addition, Mexico is poised to become one of the largest recreational cannabis markets following the Supreme Court's decision to repeal Prohibition.