In a case that shows the parlous nature of cannabinoid regulation in Mexico, a firm that was granted permission to grow and make products from industrial hemp was immediately warned by regulators that they would appeal against their own decision.
Canadian company Xebra Brands received authorisation from the Mexican Health Regulatory Agency (Cofepris) on 9th March for its Mexican subsidiary to cultivate, harvest, process and produce industrial hemp. It was also granted permission to import and acquire the necessary seeds and sell the resulting products both domestically and internationally.
However, Cofepris and the Mexican Interior Ministry issued a statement the same day vowing to challenge the permission – which was only granted after a years-long legal dispute between Cofepris and Xebra. The case was ultimately decided by Mexico’s Supreme Court in 2021 in favour of the Vancouver-based company.
This paved the way for Xebra’s entrance into Mexico, though it took more than a year for Cofepris to follow through on that ruling, which only applies to hemp with less than 1% THC content.
Cofepris said the ruling presented a “grave risk to health”. The agency said that while it would comply with its obligation to obey judicial rulings, “there isn’t sufficient information to determine that this product [hemp] is safe for the purposes that the multinational company intends to use it for”.
It added: “In coordination with the Interior Ministry, a complaint of disapproval has been presented to the Third Tribunal Circuit Court in an effort to reverse and invalidate the authorisation in order to protect the health of the people.”
The immediate vow by Cofepris to appeal against Xebra’s historic authorisation is the latest obstacle to the opening and advancement of a Mexican cannabis industry. The nascent industry has suffered a series of setbacks since 2017, when the country’s General Health Law was modified to pave the way for medicinal cannabis.
Obrador throws down obstacles
Under the current government of Andrés Manuel López Obrador, who has opposed the legalisation of recreational cannabis, the industry has encountered repeated barriers despite urgings from senators to pass legislation that would open the sector to research, development and investment.
In a joint statement issued on 10th March, several Mexican cannabis and industrial hemp groups argued that “industrial hemp doesn’t represent any health risks to people”. They said industrial hemp products – which include fabrics, rope, paper, cosmetics and textiles – are not for human consumption and so should not be subject to regulation by Cofepris.
Luis Miguel Lopez, an advisor and consultant to the Mexican cannabis industry, told CannIntelligence that, similar to Xebra, “there are other pending legal amparos issued by companies currently in Mexico that will have the same resolution in the next few months”.
He said there were five companies currently seeking similar authorisations to develop industrial hemp in Mexico, as was backed by the Supreme Court in 2021.
However, according to Denyse Espinosa, a Mexican cannabis activist and co-founder of cannabis company Revolución Con Flores (Revolution with Flowers), even if the Xebra authorisation is enforced, Cofepris and the government still lack a legal framework to oversee cultivation of industrial hemp.
“Cofepris felt pressured and ceded to give Xebra the authorisation, however the agency is still without proper regulation and companies can’t harvest hemp or cannabis yet without an amparo or specific authorisation because there isn’t a framework in place that allows for cultivation,” she said.
“The Interior Ministry and Cofepris have a firm stance that these authorisations shouldn’t be granted because there isn’t an existing framework for several facets of cultivation, including how to apply duty taxes on the import of seeds, for example.”
– Adam Williams CannIntelligence contributing writer