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by Stockwatch Business Reporter
The S&P/TSX Cannabis Index lost a fraction to 150.13, while the CSE Composite Index lost 9.18 to 549.01. The Mexican Senate has approved a comprehensive bill for the legalization of recreational cannabis, putting Mexico on the path to becoming the third country where adults can legally consume cannabis for fun (after Canada in 2018 and Uruguay in 2013). The Mexican government has been talking about legalization for over a year. While it technically legalized medical cannabis back in 2017, this law was never effectively implemented, so patients have remained unable to access medical cannabis products and business opportunities for cannabis companies have remained minimal. The creation of a legal recreational market could mark a turnaround.
Companies are still facing a potentially long wait for revenue. Approval by the Senate is an important step, but the bill still needs to be approved by the lower legislative chamber and then signed into law by the Mexican President. The government must then establish a cannabis regulatory agency and add secondary rules to make the current broad-strokes bill more specific. (The medical law will likely need some fresh attention too.) It is thus unclear when sales might actually begin. Even so, this is encouraging news for anyone with an eye on Latin America's second-largest consumer market. One of the larger Canadian companies with a Mexican foothold is Aurora Cannabis Inc. (ACB: $9.34), which in 2018 acquired Farmacias Magistrales, gaining access to over 500 Mexican hospitals and pharmacies. Other companies with Mexican connections in one form or another include Pharmacielo Ltd. (PCLO: $0.84), Khiron Life Sciences Corp. (KHRN: $0.43) and Village Farms International Inc. (VFF: $10.49).
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