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A December 2021 Supreme Court ruling directed the Mexican Health Regulatory Agency (COFEPRIS) to grant Xebra Brands the authorization to legally produce, process, manufacture, distribute, and sell cannabis under 1% THC. Now, with all the necessary guidelines delivered, the company is ready to get to work bringing products to the Mexican Market.
Cannabis has been decriminalized in Mexico since 2021. While many see the budding market for legal hemp and cannabis products as a revolutionary boon for the country’s economy, lawmakers have been slow to set the table for a regulated market around them.
This is why market insiders are keeping a close eye on the work being done by Xebra Brands, a global CBD company led by CEO Jay Garnett. For the last four years, Garnett’s team has been pushing for the authorization to do everything from growing to selling cannabis under 1% THC in Mexico.
The 2021 ruling from the Supreme Court – which forced COFEPRIS (the Mexican equivalent to the US’ FDA) to play ball with the CBD brand by laying out quality and health standards – opens the door for Xebra to be the first to commercialize cannabis with low levels of THC (under 1%).
After spending early 2023 deliberating over what these guidelines will be, COFEPRIS has now given Xebra all it needs in the way of guidelines and authorizations. As a consumer packaged goods company, these parameters will allow Xebra to bring a wide array of products to market. These include tinctures, oils, topicals, edibles, beverages, and certain uses of cannabis flower, which its team has extensive experience with.
As the first mover in this market, it’s been a legal rollercoaster for Xebra’s team and Mexican lawmakers alike, who’ve had to map out an entirely new legal landscape in order to get to the current decision. This has meant a grueling four years of legal battles which went through every level of court, all the way up to the Supreme Court of Mexico and back down again.
By a quirk of the Mexican system, Xebra’s blessing to grow, produce, and sell cannabis in Mexico is unique to them only. When a legal challenge in Mexico is successful, it doesn’t create jurisprudence, unlike many other countries like the US and Canada. For a ruling to become precedent setting, it has to be granted in a whopping five consecutive decisions.
This means that any company looking to follow in Xebra’s footsteps will have to go through their own multi-year legal battle, or find a way to ally with Xebra Mexico. It will be interesting to see what the global players of the industry, such as Canopy, HEXO, and Cresco, make of these developments.
“It’s exciting,” Garnett says. “It’s a victory and you need to celebrate that. But with every victory comes the next stage of work to do.”
Garnett – who came on as Xebra’s CEO a year ago – is the perfect man to lead the company through this stage of the process. Having spent over three decades in the consumer packaged goods space, Garnett has experience in everything from coffee, to wine, to CBD. His first company, Seattle’s Best Coffee, sold to Starbucks in 2007. Another company he later invested in and led as CEO, The Healthy Beverage Company, partnered with Nestle Global and was acquired in 2010.
The expertise in consumer packaged goods allowed the entrepreneur to pivot into cannabis in 2018, which led him to where he is today at the helm of Xebra. “It’s great to be able to be a first mover in a market like Mexico,” he says, “and work to replicate what we’ve done right in Canada, while avoiding some of the pitfalls the industry has tripped on in other emerging markets .”
Like its leader, Xebra has a proven competency that made it the perfect brand to champion a legal market in Mexico. Its speciality lies in Cannabis beverages, which are carefully regulated in Canada in comparison to other CBD products. In addition, Health Canada is notoriously stringent when compared with counterparts in the US and European Union.
In all of the food and beverage space, there’s a prevailing idea that if you can satisfy regulations in Canada, you can make it anywhere. This positions Xebra as the perfect pilot of the Mexican cannabis market’s maiden voyage.
“To show that competency to an emerging market,” Garnett states, “you need the ability to produce products in a legal way with very stringent requirements, in multiple jurisdictions, with the flexibility to adapt across different legal frameworks between different provinces or states.”
That’s exactly what Xebra managed to do. First, in Canada, and then in Mexico (as the first brand to ever do so).
There’s a long road ahead for Xebra, who must now work with local municipalities, partner with the farmers who will begin cultivating cannabis, and set up the process for everything from production to selling.
In terms of selecting the right industry partners who will aid Xebra in its work, it will take the right balance of capital and expertise – along with an aligned belief in what’s best for this budding Mexican market.
For more information on Xebra Brands, led by CEO Jay Garnett, visit their website. For updates on the latest news out of Mexico, click here.
