NAFTA Negotiations, Vicente Fox & The Future of Exporting Cannabis

President Donald Trump announced last month that the U.S. and Mexico have reached an agreement on a new trade deal to replace NAFTA — to be dubbed the United States-Mexico Trade Agreement. Trump and his Mexican counterpart, President Enrique Peña Nieto, hope the deal will be approved by lawmakers in both countries by year’s end.

Mexico’s most outspoken former president immediately reacted to the news by calling for the new trade deal to include cannabis as a legal commodity. Former president Vicente Fox, who sits on the board of Vancouver-based medical marijuana producer Khiron Life Sciences Corp., told Bloomberg on Aug. 30 that he expects Mexico to legalize cannabis in 2019.

“We can change criminals for businessmen, we can change underground, illegal non-taxpayers into an industry, a sector of the economy,” Fox said in an interview with a Bloomberg reporter in Toronto, where he was in town to meet with the Khiron board. “I think it should be part of NAFTA and that’s what I’m pursuing.”

Fox envisioned his country becoming a major above-board supplier to the other two NAFTA partners. “On vegetables, on fruits, on avocados, Mexico produces and provides up to 70 percent of the U.S. and Canadian market so we are efficient in producing, we’re efficient in farming and we’re low-cost and competitive,” he said.

Pot Protectionism

As much of a long-shot as it is to fight for NAFTA to include cannabis exportation when neither the U.S. or Mexico has federally legal cannabis, stateside growers are already waxing protectionist.

Jamie Warm, the CEO of Henry’s Original cannabis producer in California’s Mendocino County, warned that bringing cannabis under NAFTA could undermine a last economic refuge for the United States’ already hard-hit farmers.

“U.S. farming has collapsed as it has been outsourced everywhere,” he told HuffPost. “How is that fair? But cannabis is one crop that small farms have relied on for income.”

“U.S. farmers have to deal with environmental regulations and worker protections that other countries don’t have,” he added — and observers say Trump’s new trade deal with Mexico actually tightens labor standards.

Lex Corwin, the founder of Stone Road Farms cannabis producer in Los Angeles, was also quick to rain on the parade. He told HuffPo, rather obviously: “NAFTA is a federal trade agreement and marijuana is federally illegal, therefore marijuana can’t be included until it’s federally legalized.”

But even in that eventuality, Corwin doesn’t think it should be included in international trade agreements.

“Small cultivators and manufacturers are struggling enough with California’s excessive regulation and constantly changing legal framework,” he said. “If we add foreign-grown, low-cost marijuana to the equation, it would be a death sentence for many American marijuana businesses and the tens of thousands of well-paying jobs this industry provides.”

Kenny Morrison, president of the California Cannabis Manufacturers Association, added to HuffPo: “There will always be a market for California craft cannabis, but could Mexico disrupt it to a large degree? Yes. It happened to kale, why not cannabis?”

Seeds of a Legal Mexican Industry

Fox has emerged as an aggressive advocate of legalization in recent years, despite the fact that he vetoed a decriminalization bill as president in 2006 under heavy U.S. pressure. The decriminalization bill was ironically passed under Fox’s ultra-hardline successor Felipe Calderón, who is widely perceived to have unleashed Mexico’s nightmare of narco-violence by mobilizing the armed forces against the drug cartels upon taking power in 2006. Mexico’s left-wing president-elect Andrés Manuel Lopez Obrador, who will take office on Dec. 1, has breathed new life to the idea of legal cannabis as a way out of the narco crisis.

Mexico also passed a medical marijuana law last year, although the program remains limited to CBD products at present.

There have been early signs of hope for a legal Mexican cannabis industry. For example, Mexico held its first Cannabis Cup (Copa Cannábica) in Guadalajara in March.

Newspaper Excélsior reports that this saw the unveiling of a new artisanal product — a package of pre-rolled joints, available under the brand name Flor de Caña. Produced by an outfit calling itself THC Crew, each pack (decorated with national symbols of Mexico along with the cannabis-leaf image) contains seven joints with a total of 3.5 grams of high-grade cannabis — exactly the maximum quantity permitted by the decriminalization law. Of course, Mexican law includes no provisions for legal sale, so marketing the product presents an obvious problem.

Meanwhile, police and military operations against cannabis growers continue throughout Mexico’s mountain spine — especially in the Sierra Tarahumara mountains of Chihuahua state, the country’s most intensive production zone. In the latest incident in a string of ongoing busts, on Aug. 27, federal police backed up by army troops announced they would be burning 745 kilograms of harvested cannabis in a warehouse in the Tarahumara village of Guadalupe y Calvo.

TELL US, do you think the United States and Mexico should open up for legal cannabis trade?