MEXICO CITY — Mexico, a country carved up by cartels for decades, is poised to take a major step in drug policy. This week, the lower house of Congress approved a landmark bill to legalize recreational marijuana, which would make it the world’s largest legal market for the drug.
With legalization considered all but certain to win Senate and presidential approval, many in the business world are predicting a Mexican green boom: a newly legal industry providing tens of thousands of jobs, millions of dollars in profit for savvy entrepreneurs and welcome tax revenue for the government.
But many business analysts and economists are wary, and caution that the cannabis industry here is more likely to be a green blip than a boom. Opening a licit market would matter more legally and symbolically than economically, they argue, citing relatively low domestic demand and little chance of exporting the product, as well as seemingly restrictive regulatory measures.
“It’s hard to see any obvious broad effects” on the Mexican economy, said Jeffrey Miron, an economist at Harvard University. “You will see a little bit of a bump in measured G.D.P.,” he added, but “people claiming that it will be a big boost to the economy through legalization, I don’t think that makes sense at all.”
Erick Ponce, a Mexican entrepreneur and president of the Cannabis Industry Promotion Group, a local research and advocacy group.
“We definitely see it as an important economic boost for the country especially in the middle of a pandemic,” Mr. Ponce added.
According to a January report from a cannabis data analysis company, New Frontier Data, the Mexican marijuana industry could be worth as much as $3.2 billion dollars annually, and major cannabis companies like Canada’s Canopy Growth are already eyeing the market.
its own legalization in 2018, investors and analysts predicted a surge in cannabis cash, but the business has not been a rousing success.