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As tense NAFTA renegotiations put pressure on Canada and Mexico’s relationship, former Mexican president Vicente Fox thinks the two countries will soon be moving in the same direction - towards a legal cannabis market.

Within the next 18 months, Mexico could legalize recreational cannabis, Mr. Fox told The Globe and Mail on Thursday in Toronto, where he was attending a board meeting of Canadian-headquartered Colombian cannabis company Khiron Life Sciences Corp. He’s betting that the recent election of his long-time left-wing rival Andres Manuel Lopez Obrador could prove to be a good thing for the cannabis sector.

"The new government is very liberal. Great positive attitude towards legalization,” said Mr. Fox, a centre-right figure who has become a vocal advocate of drug-policy reform since leaving office.

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Mr. Fox sees potential for the legal cannabis market to open new doors, saying cannabis could be one day be part of NAFTA. In regards to the current negotiations, he noted that Mexico was looking after its own interests first and foremost, but also very concerned to keep Canada in the deal. Now, he says, Canada must take decisive action. "Trudeau, make a deal," he said.

Former Mexican president Vicente Fox is seen on Aug. 30, 2018. Mexican politicians have long been in favour of legalizing marijuana, one expert says.

Christopher Katsarov/Globe and Mail

During the Mexican election, Mr. Lopez Obrador, popularly known as AMLO, campaigned on a promise to end the country’s long and violent drug war, with amnesty for low-level criminals and an end to drug prohibition as possible tools to undermine Mexico’s powerful cartels.

"I think next year the market will be totally open,” said Mr. Fox, who served as Mexican president from 2000 to 2006, and has recently joined the boards of several cannabis companies, including Khiron and the U.S. cannabis publication High Times.

Mexico’s apparent move toward legalization is part of a global shift in attitudes to cannabis, typified by recreational legalization in Canada, Uruguay and nine U.S. states, and medical-marijuana legalization in countries such as Colombia and Germany.

"Mexican politicians have long been in favour of legalization,” said Professor David Shirk of the University of San Diego, an expert on the Mexican drug war. But opposition from a conservative, Catholic voter base and pressure from the United States has made significant change in Mexico politically untenable.

During Mr. Fox’s own presidential tenure, an attempt to decriminalize possession for small quantities of drugs came to nothing.

“Ultimately, Vicente Fox vetoed that law, I think because of the perception that the United States was opposed,” Prof. Shirk said.

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“When you’re president, it’s hard to stand up for marijuana legislation. … So it’s a big deal that AMLO is talking about this possibility for his incoming administration. It’s also a big deal that it’s not really generating a lot of backlash or opposition, either in the United States or Mexico,” Prof. Shirk added.

Mexico has been inching toward legalization since 2015, when the country’s supreme court ruled that a group of cannabis advocates had a right to grow and consume cannabis for personal reasons.

The ruling was non-binding on the broader population, but set off a flurry of activity in Mexico’s congress, leading to the passage of a bill in 2017 that legalized the use of cannabis products containing low levels of psychoactive Tetrahydrocannabinol (THC) for medical purposes.

The regulations required to implement the new legislation still haven’t been approved, and Mr. Fox expects the departing government of President Enrique Pena Nieto will do little on this file in its final three months in office.

That will give Mr. Lopez Obrador’s government a freer hand to introduce an expanded medical-marijuana regime – possibly allowing in-country cultivation and higher-THC products – early next year, followed by rules for recreational legalization by the end of 2019, Mr. Fox said.

“I think it’s going to be a quick process. There are a lot of experiences elsewhere. I think, for instance, Canada is a model to follow, I think Colombia is a model to follow," Mr. Fox said.

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The possibility of Mexico’s cannabis market opening up to legitimate business prompted Khiron to partner with Mr. Fox, said Khiron’s chief executive officer Alvaro Torres.

Over the past several months, a number of well-capitalized Canadian cannabis companies, including Canopy Growth Corp., Aphria Inc. and Cronos Group Inc. have begun acquiring subsidiaries in other parts of Latin America.

"I haven’t seen any major Canadian companies looking at Mexico yet, but when we founded Khiron a year and a half ago, there were no Canadian companies talking about Colombia,” Mr. Torres said.

“We want to be able to know that by the time all these Canadian companies come in [to Mexico], our brand and goodwill is already well-established before they arrive."

For all the positive signals around legalization coming from the entering Mexican government, a lot of uncertainty remains, Prof. Shirk said.

Mr. Lopez Obrador’s party has a majority in congress. But the newly minted party is a fractious coalition of competing interests, and getting major social legislation through will be a challenge.

Then there’s the issue of trying to legalize cannabis in a country where illegal cultivation is widespread and controlled by cartels.

"Fortunately for the AMLO administration, the fact that we’ve seen such large-scale legalization of marijuana in the United States means that the price of marijuana has fallen dramatically on the legal market and the illegal market,” Prof. Shirk said.

“That means that illicit Mexican marijuana is much less profitable for drug-trafficking organizations … so I don’t think they’re actually that concerned about losing business.”

For Mr. Fox, who saw drug violence begin to spin out of control near the end of his term in office, anything that undercuts cartels is a good thing – more so, no doubt, if there’s a way to profit in the transition. “To get out of that trap, it’s specifically legalizing, it’s moving forward, it’s taking away the money and control of this industry in the hands of criminals, bring it back to the state, bring it back to the business community,” Mr. Fox said.

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