Frequently Asked Questions Regarding Cannabis in Mexico
Because we are one of the very few American law firms with an office in Mexico that handles Mexico cannabis legal matters, we get a steady stream of questions regarding the current state of Mexico’s cannabis regime, and what to expect in the future. Our position on cannabis overall in Mexico is that it will eventually be very big and companies should be preparing now to enter this market. Below are some of the more common Mexico cannabis questions we get, along with our answers.
Do applicants for cannabis licenses in Mexico have to be Mexican companies or Mexican residents?
It is important to set up a Mexican company. Though not expressly mandated by law, when you look at the cannabis permits/licenses application requirements you realize that those are applicable to/can be complied with only by Mexican companies. We generally recommend a private-equity firm or SAPI. Applying as an individual is possible, but you must include in your application(s) contact information within the country.
Do I need a medical cannabis license as a consumer/patient like in the USA or will it be different in Mexico?
As a consumer/patient, you need a prescription issued by a physician to be able to purchase cannabis medicines either here or abroad. A prescription is also necessary to apply for a special import permit for the medicine(s) you need.
Is flower consumption observed in medical use?
Yes. The Medical Regulations include the flower in the definition of raw material “necessary for the manufacturing of pharmacological derivatives and medicines”, whereas one of the requisites to apply for a growing license is to specify an estimated harvest quantity, “including the amount of flowers and plant residue.”
What are the requirements for filing a foreign trademark associated with cannabis/marijuana in Mexico?
The main requirement is that your trademark is related to medical or industrial use. If that is the case, then requirements are the same as when you apply for any trademark registration, regardless of the place where it was first registered.
An application must be filed before the Mexican Institute of Industrial Property (IMPI), the Mexican Patent and Trademark Office. Among other requirements, it must contain:
- the name and trademark design to be registered;
- the date of first use (if applicable);
- a list of establishments or businesses where such prior use has taken place;
- the products of services you intend to have covered by the registration per the Nice Classification;
- a trademark description; and
- payment of applicable fees.
If the applicant is a foreign individual or entity and a trademark has been registered abroad before, then all relevant documentation, duly translated and legalized must be submitted.
As you can see, considerations here are rather of a more common nature:
- avoid generic/similar trademarks;
- remember that trademarks covering services related to cannabis rather than cannabis as such are more likely to be granted registration; and
- be mindful that as long as cannabis is not fully legal (i.e. medical, industrial and adult uses fully regulated), IMPI has leeway to interpret the law.
It is your Mexican cannabis attorney’s job to convince IMPI that a) your trademark, if related to medical use, is not against the law and b) because of this, goods/services related to your trademark do not promote the consumption of a drug.
What are the requirements to attain a permit to grow and supply CBD in Mexico?
First off, it is important to point out that in Mexico there is no distinction between CBD and hemp derived-CBD like in the U.S. Instead, what defines cannabis for medical, industrial or recreational use is the actual use given to the plant (either raw or processed), and not just the amount of THC (1%). We can thus have medical cannabis products under and over the 1% THC standard, whereas anything (plants/derivatives/products) below 1% THC content is considered “hemp” (cáñamo industrial) and also open for industrial (i.e. non-medical and non-adult) use.
Further, given the question’s wording, we will assume that they meant CBD in its raw form. Note that starting in June 2021, license holders will be able to grow CBD for medical use only, in a confined area (greenhouse). They will also be able to import raw materials (materials vegetation: plants, seeds, etc.) and cannabinoids (THC, CBD in its raw form) for medicine manufacturing.
Import of any product containing CBD for non-medical uses or containing THC is not allowed. This means that no cosmetics, edibles, or supplements will be allowed into the country. Actual requirements are addressed in the next question.
What are the requirements to start producing, processing, and selling cannabis?
Right now, only medical use is fully legal in Mexico, so the requirements discussed here will be those related to medical cannabis.
First, it is important to set up a Mexican cannabis company: as mentioned above, application requirements are applicable/can be complied with only by Mexican companies.
As for producing cannabis in Mexico, this usually refers to cultivation activities, and to conduct them you should start by finding a Mexican partner (49% foreign ownership, 51% Mexican ownership), building a greenhouse (right now only indoor growing is allowed), apply for a cultivation license and then import seeds or plants. Prior seed registration/qualifications and import permits are needed.
To import, it is important to mention that only entities with a Pharmaceutical Sanitary License, and/or a Medicine Factory License can apply for an import permit. If you qualify, you then need to secure facilities (warehouse), transport logistics, and have security protocols set up to ensure imported supplies are guarded at all times. If you wish to import medicines you first need to secure a medical product health registration for each of the products you wish to import, either by applying for such registration owned or by licensing it from someone who has it.
If you wish to process cannabis, you must obtain a processing license, import raw materials (you cannot buy them domestically because there are no Mexican raw material suppliers at the moment), obtain all the non-cannabis Government permits/licenses necessary to operate as a factory and sell the final derivative/product to duly licensed cannabis medicine distributors or to pharmacy chains.
As for sale, it depends on whether you would like to distribute (i.e. either sell to someone down the productive chain, like a licensed pharmacy), or sell retail in your own licensed drugstore/pharmacy. If distributed, you need to obtain medical product health registration for every cannabis end product prior to its import and distribution to a licensed seller. If selling retail, you need warehousing facilities, security protocols in place and an operational drugstore/pharmacy with applicable sanitary permits (business license, sanitary license, control books) required from any establishment selling medicines or drugs.
What could be the legal implications of retail product order pickups or delivery? Point of sale solutions?
The general rule is that for medical use (which is the only thing fully legal at the moment) the only establishments allowed to sell at retail are pharmacies, drugstores, and the like.
Another thing to consider is that medical products can only enter the country through authorized ports of entry and once the appropriate authorizations for medical product health registration and import permits for each product to be imported into the country have been obtained (see the previous question). Delivery via mail or parcel is prohibited.
With the aforesaid in mind, any cannabis medical product company can sell from abroad to any Mexican individual who produces a cannabis prescription duly issued by a physician licensed to issue cannabis prescriptions or retail sale in the country. This may be accomplished by setting up an establishment like the ones mentioned above and obtaining the necessary licenses/permits, or partnering with a Mexican importer, distributor or licensed establishment for indirect sale in the country.
When you form the company what should the official business of the company be listed as?
Your corporate undertaking should be not only expressly related to cannabis (medical or hemp-related) but also directly linked to the activity you are applying for. This means that, under what is currently allowed, your undertaking could mention any of the activities currently provided for in the Medical regulations (i.e. any link in the productive chain, from cultivation to sale for medical use) and, potentially, growing, commercialization, import, and export of hemp.
Companies are under no legal obligation to have a cannabis-related undertaking in their bylaws, but it has been our experience that COFEPRIS is very reluctant to even review application materials of companies who do not have such undertaking. COFEPRIS will be more reluctant still of companies that originally had an undertaking completely unrelated to cannabis, and merely changed it to apply for a permit/license (something that, by the way, is traceable by a quick search in the Public Commerce Registry where companies are mandated by law to record every change in their corporate structure).
We can reasonably expect the same attitude from other agencies in the future. It is more advisable to set up a Mexican cannabis company, with a cannabis undertaking adapted to your particular activity, from scratch.
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