Mexico to Legalize Cannabis This Month, These Companies Will Profit

cannabis legalization

Senator Ricardo Monreal—the head of MORENA, a political party in Mexico that controls the nation's senate—says that Mexican lawmakers will soon vote on a cannabis legalization bill.

After weeks of refining the reform bill through public forums and open session debates, Moreal believes that it will be approved by the senate before the end of the month.

Last year, the Supreme Court of Mexico set October 2019 as a target date for nationwide cannabis legalization. This was after it ruled that preventing Mexican citizens from possessing, cultivating, or using cannabis is unconstitutional.

Mexico has an ideal climate for weather-loving crops such as cannabis. Some analysts are projecting that the country could develop the largest cannabis market in the world. The market could be worth $3–5 billion through the direct use of cannabis and about $12–18 billion in spin-off industries.

Fortunately, there are several Canadian companies already well-positioned for Mexican cannabis legalization. Investors interested in seeing how the country's entrance into the recreational cannabis space can potentially turn the market around should consider backing one of these companies.

Aurora Will Likely Be the First Mover

Last December, Aurora Cannabis Inc. (TSX:ACB) (NYSE:ACB) acquired Farmacias Magistrales S.A., Mexico's first federally licensed importer of raw materials containing THC. Through this deal, Aurora acquired the company's licenses, facilities, and permissions to import, manufacture, store, and distribute medical cannabis.

This means that Aurora is likely to have first-mover advantage after cannabis legalization comes to Mexico. It owns a 12,000 square-foot facility in Mexico City that is currently producing pharmaceuticals, but could be scaled for recreational cannabis.

The company already enjoys a strong distribution and research network in Mexico, and its hub for industrial-scale cannabis production in Edmonton is expected to be occupancy ready by the end of the month, just in time for Aurora to capitalize on the Mexican recreational cannabis market.

>> Aurora Stock Nearing 52-Week Low: Has It Finally Bottomed Out?

CannaOne Technologies is Also Ready for Mexican Cannabis Legalization

CannaOne Technologies Inc. (CSE:CNNA) (OTCPK:CNONF) is a tech company that developed a proprietary E-Commerce Marketplace solution for the cannabis industry. Using this solution, the company launched the BWell Marketplace in July. BWell focuses on CBD product deliveries throughout the United States.

Through a cookie-cutter model, the software behind BWell—Bloomkit—can produce other marketplaces for any kind of cannabis product in any market. From medical to recreational, from CBD-centric to THC-centric, Bloomkit is incredibly adaptable.

That's why it's interesting that, in March, CannaOne signed a contract with Manna Health Services SA de CV to launch an online CBD product purchase and delivery marketplace in Mexico. Current expectations are that the marketplace will begin operations this fall.

It would be relatively easy for the company to adapt its marketplace's CBD capabilities to the THC ones after cannabis legalization passes in Mexico.

In addition to its e-commerce solution in Mexico, CannaOne is working to establish yet another CBD marketplace in the UK. As the United Kingdom has also made moves towards adopting cannabis legalization, CannaOne is clearly choosing its markets wisely.

Other Companies Well-Positioned in Mexico

Khiron Life Sciences Corp. (TSXV:KHRN) (OTCQB:KHRNF) has the rare privilege of having former Mexican President Vicente Fox Quesada on its board. It first entered the cannabis market in Mexico just days before the Supreme Court made its ruling about recreational cannabis, so it's certainly been waiting for this news with bated breath.

In May, it unveiled plans to bring 100 cannabis products to Latin America with its JV partner, and that same month it discussed its strategic position in the Mexican market.

PharmacCielo (TSXV:PCLO) also has a JV partner, MINO Labs SA de CV, that is helping it enter the Mexican market. The two companies will be exporting cannabis oils and other derivatives to Mexico as early Q4 of 2019.

All four of these companies have a foothold in Mexico. That's not just important for their production and distribution capabilities, it also gives them brand recognition with the Mexican public.

As another country embraces cannabis legalization, Canadian companies will continue to move first in capitalizing. Hopefully, that will help kick pot stocks back into high gear after half a year of decline.

>> Read More Legislation News

Featured image: DepositPhotos © kittyfly

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