Mexico's legal cannabis business takes next step with CBD-focused firm

Xebra Brands

09/03/2023 20:25

By Diego Oré
       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)
 ((david.aliregarcia@thomsonreuters.com; +52 55 5282 7151;
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