Latin America has a prospective market of over 35 million adult use customers and 4 million patients.  The size of the Latin America cannabis market has an estimated market value of $60 million in 2022 and in the second edition of the Latin America and Caribbean Cannabis Report – produced by London-based advisory group Prohibition Partners – is projected to reach over $500 million by 2025 with increasing production of cannabis cultivation. The region also benefits from low-cost labor and construction costs, meaning that the overall cost of production can be up to 80% lower than that of North America according to the report.

The possible legalization of a recreational market in Mexico will have a significant effect on recreational sales in the region accounting for over 80% of projected adult cannabis sales. The current population of Mexico is 130.3 million, based on the latest United Nations estimates. Mexico population is equivalent to 1.7% of the total world population.

Population 2021 (m)130.3
GDP 2021 (US$ t)1.293
Agricultural land (% of land area) 202049.97%
Total pharmaceutical expenditure 2022 (US$ b)11.26
Total medical cannabis patients 202132,000
Total of potential cannabis users (est.)1.07%
Source: World Bank/Prohibition Partners

Mexico Cannabis Market Legalization

Mexico began changing its cannabis policy in 2009 when it decriminalized the possession of up to five grams. On June 19th, 2017, Mexico legalized medical cannabis, to be regulated and studied by the Ministry of Health. In February 2021, Mexico published regulations making it possible for companies to start applying for research licenses to bring products to market.

On March 11th, 2021, Mexico’s lower chamber approved a cannabis legalization bill to allow adults, over 18 years, to smoke cannabis and carry up to 28 grams, purchased in licensed stores, and citizens, with a permit, to grow up to six plants as well, while farmers will be able to have large cultivations, given priority to indigenous groups and small farmers in an aim for social equity. On 29 June 2021, the Supreme Court of Mexico decriminalized the recreational use of cannabis. There will be six different licenses including vertical integration, production, distribution, retail, extraction and research. It is expected that the permits and licenses process will start in 2023.

Economists have forecasted that, with a potential base of over 1.4 million regular domestic users, Mexico could receive over $1.2 Billion in new, annual tax revenue.


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