By Diego Oré
MEXICO CITY (Reuters) - Mexico should become the top player in the North American marijuana market once the process of legalization is complete, according to the first company given permission by the country's highest court to commercialize cannabis.
Mexico's lower house of Congress in March backed decriminalization of cannabis for recreational, scientific, medical and industrial uses, in a move supporters hailed as a major step for a country long ravaged by drug gang violence.
However, final approval has been held up in the Senate.
Mexico's Supreme Court on Dec. 1 made Canadian company Xebra Brands' local subsidiary, Desart MX, the first company allowed to import seeds, as well as grow, process, manufacture, sell and export marijuana products with 1% or less THC, the plant's psychoactive substance.
"The impact is significant because it sets a precedent in Mexico and is also a historical event," Xebra Brands President Robert Giustra told Reuters in an interview.
"Mexico is clearly legalizing. It's going to happen, probably next year," he said, arguing that Mexico has an industrial advantage as well as a large consumer market.
An official from MORENA, President Andres Manuel Lopez Obrador's ruling party, told Reuters that despite obstacles, approval of the measure in the Senate was expected in 2022. That could make Mexico the world's largest single weed market.
The global market for legal marijuana is estimated to hit $73.6 billion by 2027, according to Grand View Research.
Access to land, a skilled labor force and a trade pact with the United States and Canada are all attractive qualities in the Mexican market, Giustra said.
Other industry players, like Canada's Khiron Life Sciences (OTC:KHRNF), have also expressed interest in Mexico.
Xebra is waiting on authorization by Mexico's health regulator, Cofepris, which Giustra expects no later than February. Cofepris did not respond to a request for comment.
For now, Xebra is looking for land in the central State of Mexico and on the Yucatan Peninsula for growing marijuana and building an extraction facility to produce hemp derivatives for beauty products and beverages for the Mexican market and exports to Europe.
Giustra predicted his company would have the market for cannabidiol, or CBD, and cannabigerol (CBG) to itself for up to three years.