The legalization of recreational cannabis across the globe has only been successfully completed by two countries – Canada and Uruguay. Mexico’s court system ruled last year that the ban on personal cannabis usage is unconstitutional and the country hasn’t yet imposed a framework for recreational cannabis legalization. The issue with development on recreational cannabis in mexico is the option to choose if the government should run cannabis dispensaries and cultivation facilities, or if the rights should be doled out to private corporations with government oversight through license approvals. There is an October 2019 deadline imposed by Mexico’s court system to decide on a framework, if Congress does not pass any form of recreational cannabis legalization, it would go back to the Supreme Court for further decision. The Supreme Court already decided that the rights should be with the people, so it would seem likely that recreational cannabis legalization is just a matter of time for Mexico.
A company that would benefit tremendously from Mexico’s recreational cannabis legalization is Aurora Cannabis. The company announced last year on December 10th that it has entered into an agreement to acquire all of the outstanding shares of Farmacias Magistrales S.A., Mexico’s first federally licensed importer of raw materials that contain tetrahydrocannabinol (THC). Aurora Cannabis announced the acquisition agreement shortly after the two corporations entered into a supply agreement.
Terry Booth, Chief Executive Officer of Aurora Cannabis, stated: “This transaction positions Aurora with exclusive access to supply THC-containing medical cannabis to a large market of more than 130 million people, while also enabling us to capture the full margin of the medical cannabis we sell there. Farmacias has a large distribution network of both retail outlets and pharmacies, which will enable us to quickly scale up our operations across Mexico. Integrating Farmacias with our operations in Canada and Latin America will not only accelerate growth, it will build substantial long-term shareholder value.”
The distribution network of Farmacias contains 500 pharmacies and hospitals and an estimated 80,000 locations for retail sale of cannabidiol (CBD) products.
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