MEXICO CITY, March 9 (Reuters) – Mexico’s nascent legal cannabis industry on Thursday welcomed its first company authorized to grow at industrial-scale but focused on a booming niche market that mostly sidesteps the mind-altering qualities of the plant’s flowers.
The local unit of Canada’s Xebra Brands (XBRA.CD) is the first company to obtain permits to cultivate, process, produce and market cannabis in Mexico, according to a statement from the firm.
The authorizations mark the latest step of a major shift away from the Mexico’s decades-long criminalization of the plant that was once a major source of revenue for powerful drug gangs.
Xebra Brands’ subsidiary Desart MX obtained a partial greenlight from Mexico’s Supreme Court in late 2021 to import seeds, as well as grow, process, sell and export cannabis products with 1% or less THC, the plant’s psychoactive substance.
Desart MX is more focused on marketing products with another of the plant’s components known as cannabidiol, or CBD, which does not make users high, but instead is used to treat ailments such as insomnia, pain and anxiety.
Mexico’s health regulator COFEPRIS granted final approval in late February, which was noted in a court document this week, according to the company.
In its statement, Xebra Brands said it faces no restrictions where it can grow cannabis in Mexico, the size of cultivation facilities or processing volumes.
“This represents an important moment for cannabis globally,” Xebra Brands CEO Jay Garnett said in the statement.
In an interview with Reuters in late 2021, the firm’s former president said regulatory authorizations would position Mexico as the industry’s most important North American player.
Xebra Brands added it is actively looking for farm land and a site to build an extraction facility to produce CBD-rich hemp derivatives.
In 2021, Mexican lawmakers approved a law to decriminalize cannabis for recreational, scientific, medical, and industrial uses, but needed regulations remain stalled in the Senate.
Reporting by Diego Ore; Editing by David Alire Garcia and Marguerita Choy
