Mexico is poised to make some noise in the legal cannabis industry.

With the country set to finalize the legalization of hemp and marijuana next month, Mexico will become the most populous place on the planet to have dropped the ban.

It may also spell bad news for the U.S., which still prohibits the drug at the federal level, as it will now be sandwiched between two countries with full legalization and regulation in place.

“The impact would be quite significant,” said Lisa Pittman, a cannabis attorney at the Rose law firm in Texas, according to the Hemp Industry Daily. “The other countries that have already legalized cannabis — Canada and Uruguay — have populations much smaller than Mexico, and Mexico already has quite a history of using cannabis and shipping cannabis across our borders,” Pittman said.

Federal legalization means Mexico — with a population of about 130 million people — should not have any of the import and export issues as U.S. states, giving it access to a global market that is expected to grow by 853 percent to US$103.9 billion by 2024, according to The Motley Fool.

“We’re getting calls from retailers, wholesalers, distributors and so on that are interested and know that there’s going to be a big demand in Mexico,” said Christian Patiño Webb, executive vice-president of Day One, a California-based company that makes CBD-infused sparkling water.

All of this could be trouble for U.S. cannabis companies that have been shut out of international markets and often have challenges selling their products domestically thanks to a lack of access to financial services and other concerns unique to the industry.

“The United States market is going to be further hindered as it is surrounded on both sides by countries that can produce legal cannabis on a large-scale basis and can export that cannabis to other countries that have also legalized it, too,” Pittman said.

Mexico has been given a Supreme Court-mandated deadline of Apr. 30 to enact legalization. “So, this bill will basically legalize all uses (and) grants or classifies the types of licences that will be available, which are five,” said Luis Armendáriz, an attorney in Chihuahua. “One for import and export of products; a second for transformation; the third for sale or commercialization; the fourth for cultivation and the last one for research,” Armendáriz noted.

The new legislation would allow people 18 years and older to grow as many as 20 plants, as long as the supply does not surpass 480 grams annually. Mexicans would also be allowed to be in possession of up to 28 grams of the drug, while possession of amounts up to 200 grams would be decriminalized. 

If made into law, the bill would establish the Mexican Institute of Regulation and Control of Cannabis, a decentralized agency that would be responsible for regulating the industry and awarding licences to companies. It also calls for a 12 percent tax on sales of the drug that will help fund treatment efforts for marijuana abuse.

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