Mexico Poised to Legalize Cannabis Is Putting Pressure on President Biden to Do the Same

It’s been a banner year for cannabis stocks with more and more U.S. states legalizing recreational marijuana. This has led many industry experts to wonder when weed will become legal on the federal level in the U.S.

Well, it might be sooner rather than later.

Mexico made the surprise announcement that it is set to legalize marijuana in the coming weeks. This could put pressure on the U.S. to do the same since it will be trapped between two pot-selling nations.

When Will Recreational Cannabis Use Be Legal in Mexico?

On March 19^th,  Mexico’s Chamber of Deputies, which is similar to the U.S. House of Representatives, voted to legalize recreational marijuana by a wide margin, with 316 voting in favour, 129 opposed, and 23 abstaining.

If passed, it would make Mexico, with a population of around 130 million, the largest legal marijuana market in the world. And it is expected to be a financial gold mine. By 2025, the recreational and medicinal cannabis market in Mexico is expected to be worth between $5 billion and $6 billion and result in $1.7 billion in annual tax revenue.

Mexico’s Supreme Court has given an April 30^th deadline for Congress to pass the bill. But Mexican President Andrés Manuel López Obrador has said he supports the legalization of recreational cannabis.

Once signed, Mexico, Canada, and Uruguay will be the only countries to have legalized adult use pot in the Americas. This will certainly put pressure on U.S. President Biden to ramp up the legalization of recreational cannabis in his country.

Is New York State Legalizing Recreational Cannabis?

Cannabis was the biggest winner during the U.S. election in November 2020. Every state that had an initiative to either decriminalize or legalize marijuana passed. Arizona, Montana, and New Jersey expanded legalization to include recreational cannabis. Mississippi voted to legalize medical marijuana. And South Dakota raised more than a few eyebrows when it approved measures for both medical and adult use.

Today, 15 states plus Washington, D.C have approved recreational cannabis use while more than 30 states have approved medical marijuana. Other states are looking to do the same.

Lawmakers in cash-strapped New York State announced on March 24^th that they reached an agreement to legalize marijuana. It will take some time to sort things out, but by 2022, New Yorkers will be able to buy and possess up to three ounces of pot for personal use.

With New Jersey legalizing marijuana earlier this year, New York was literally surrounded by other states doing it. Much like the U.S. will be with Canada and Mexico.

What Will This Do to Marijuana Stocks?

The eventual legalization of adult-use marijuana in Mexico is already prompting analysts to raise their price targets on cannabis stocks with exposure to Mexico.

Now, should the U.S. legalize recreational cannabis in 2022 or 2023, it will create an industry giant, with Canada, the U.S., and Mexico, under the North American Free Trade Agreement (NAFTA), growing and selling weed to the rest of the world. This of course would be nothing short of amazing for Canadian- and American-listed pot stocks.  

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