Xebra Brands’ (XBRA) Mexican subsidiary, Desart MX, SA de CV has been granted an injunction by the Mexican Supreme Court.
All five Supreme Court justices voted unanimously in favour of the injunction to Xebra Mexico.
The Supreme Court will mandate the Federal Circuit Court to enforce the Supreme Court’s final decision and direct the Mexican Health Regulatory Agency (COFEPRIS) to grant Xebra all authorizations.
Xebra Mexico is the only company in Mexico that will be authorized to legally import cannabis seeds, cultivate and process cannabis, extract cannabinoids, and manufacture cannabis products. Xebra Mexico could also sell cannabis products within Mexico and for export.
Xebra believes its first-mover advantage in the Mexican CBD and CBG market could last 1 to 3 years. Commercialization of high-THC cannabis remains prohibited in Mexico; however, Mexican Congress is in the process of debating a bill to fully legalize the industry.
Xebra Mexico’s injunction applies specifically to the industrial cannabis sector, and explicitly to hemp cultivation and processing, and the manufacture and sale of mainly CBD and CBG products, such as tinctures, oils, topicals, edibles, beverages, concentrates, distillates, emulsions, and biomass etc., and certain uses of the cannabis flower.
Xebra believes Mexico has the potential to be one of the largest near-term country cannabis consumer markets in the world. Mexico is also within the North American free trade zone (USMCA), giving it considerable cultivation and product manufacturing cost advantages over Canada and the United States.
Xebra is of the opinion that there is sufficient precedent with many agricultural crops and manufactured products, to suggest that there is a possibility that ultimately the majority of North American industrial-scale cannabis production activity will occur in Mexico.
More information will be provided on Xebra’s Mexican plans in due course.
Xebra Brands is an international cannabis cultivation and product company.
Xebra Brands Ltd. (XBRA) opened trading at C$0.37 per share.