Alberto Campos Vargas September 19 2018 The great hemp debate: marijuana or not? Sanchez DeVanny Eseverri SC | Healthcare & Life Sciences - Mexico Alberto Campos Vargas Healthcare & Life Sciences IntroductionRegulation of narcotics under General Health LawIs hemp a narcotic under General Health Law?CommentIntroductionThe marijuana industry is becoming increasingly relevant in many countries, including Mexico, from a medical, recreational and industrial perspective.Mexico has some of the most stringent regulations regarding the growth, use and marketing of marijuana and has devoted significant resources to combatting all activities relating to the plant (cannabis) and others with psychoactive effects (for further details please see "Evolution of medical marijuana regulation"). However, this position has recently changed, as evidenced by the amendments to the General Health Law (particularly to Article 235bis) enacted in mid-2017, which permit the health authorities to design and execute public policies regarding the use of pharmacological derivatives of marijuana.Regulation of narcotics under General Health LawArticle 234 of the General Health Law establishes a list of products which are considered to be narcotics, including cannabis sativa, indica, americana and marijuana and its resins and seeds.Notably, there are no limitations or exceptions regarding the various forms cannabis can take; instead, they all fall within the definition of 'narcotics'. As such, it appears that all types of marijuana – as well as its seeds, resins and preparations (understood in a broad sense) – regardless of their tetrahydrocannabinol (THC) concentration or other chemical characteristics, are considered narcotics under Article 234.Similarly, Article 235 of the General Health Law establishes that all activities involving narcotics or any product that contains narcotics are subject to:the General Health Law;international treaties and conventions executed by Mexico;General Health Board provisions; andother laws and general provisions issued by the competent authorities.Such activities include the planting, cultivation, cropping, preparation, packaging, acquisition, possession, marketing, transport, supply, use, consumption and prescription of narcotics or products containing narcotics.Article 235 establishes, as an exception to this general prohibition, specific medical and scientific research activities can be carried out on the obtainment of the corresponding authorisation from the health authorities.Based on the above, it appears that the use of marijuana for non-medical purposes or in products other than medical or pharmaceutical derivatives is forbidden.Notably, the recent amendments to the General Health Law permit the use of only some pharmaceutical derivatives of marijuana and not marijuana itself, which could include hemp (cannabis sativa). Thus, it can be argued that any kind of activity involving marijuana is forbidden in Mexico, regardless of whether the marijuana:is cannabis sativa, indica or americana; andhas specific characteristics or chemical compositions that may give it certain psychoactive or chemical attributes.Is hemp a narcotic under General Health Law?Based on the above, it would appear that hemp, a strain of cannabis sativa, specifically constitutes a narcotic under Article 234 of the General Health Law. This is the case even where hemp contains no more than 1% THC as, under the current law, this is not a factor for determining the nature of a narcotic.This view is irrespective of the fact that following the recent amendments to Article 245 of the General Health Law, the health authorities may issue particular policies regarding pharmaceutical derivatives of cannabis. These amendments inserted a new paragraph at the end of Article 245 establishing that industrial products containing cannabis derivatives with THC concentrations of less than 1% may be imported, exported or marketed under the corresponding provisions. However, this does not imply that a cannabis sativa strain with a minimal THC content (eg, hemp) is excluded from the scope of a narcotic substance and the applicable restrictions in other provisions of the law.As such, there is a considerable risk that the import, export or marketing of hemp, its seeds or other products containing it may be considered an activity involving a narcotic and thus subject to the General Health Law, including its corresponding penalties (eg, imprisonment).Similarly, the Regulations for Sanitary Control of Goods and Services (GS Regulations) include a specific prohibition regarding the import and marketing of products bound for human consumption (eg, food products, dietary supplements and cosmetics). Under the regulations, plants used for the manufacturing of, for example, teas, dietary supplements and cosmetics must be duly authorised based on their classification as permitted, restricted or forbidden, as well as their potential pharmacological or therapeutic qualities. In this regard, the regulations set out a list of plants that cannot be used for the manufacturing of dietary supplements or teas, which includes the products listed in Articles 234 and 245 of the General Health Law (including cannabis in any form).Likewise, dietary supplements are regulated by Article 169 (among others) of the GS Regulations, which establishes that their ingredients cannot include plants whose use in teas is forbidden or any other recognised pharmacological substance that may represent a health risk.As such, if cannabinoids are now considered substances with recognised therapeutic properties, a plant containing a considerable amount of these cannabinoids with proven therapeutic properties, such as hemp, would not be considered suitable for inclusion in a dietary supplement.Further, Article 171 of the GS Regulations establishes that products to which recognised pharmacological substances are added cannot be marketed in Mexico unless they meet the requirements of 'health goods', which refers to pharmaceutical products. For costmetics, there is a specific prohibition regarding the use of the products listed in Articles 234 and 245 of the General Health Law, including cannabis (in all forms), as well as its seeds, by-products and derivatives.Based on Article 171, the marketing of any kind of toiletry or cosmetic product which includes hemp in its ingredients is arguably prohibited, irrespective of the fact that an isolated provision in the final paragraph of Article 245 refers to the potential "industrial use" of cannabis derivatives that have a THC concentration of less than 1%. This is because other, more specific provisions restricting the use of cannabis are in full force and effect.CommentThe Mexican marijuana market is likely to open up in the near future. However, at present, numerous provisions and regulations forbid the plant's use in any manner due to its classification as a narcotic.As such, companies are advised to undertake an-in depth analysis of the possible restrictions on the import and marketing of hemp products in Mexico. Even though the final paragraph of a single article of the General Health Law, which is specifically applicable to psychotropic substances refers to the possibility of importing and marketing products with a THC concentration of less than 1% and broad industrial uses, this does not mean that hemp may be used for products bound for human consumption. Rather, 'industrial uses' may refer to use in textile products, vegetable-based fuels (alcohol) and fibers and not necessarily cosmetics and food supplements.Thus, for businesses operating in such markets in Mexico, it would be worth analysing the full spectrum of legal provisions governing these types of product and the use of hemp as an ingredient thereof.For further information on this topic please contact José Alberto Campos Vargas at Sanchez-DeVanny Eseverri SC by telephone (+52 55 5029 8500) or email ([email protected]). The Sanchez-DeVanny Eseverri SC website can be accessed at www.sanchezdevanny.com.