The Supreme Court ruled in 2018 that recreational cannabis should be permitted, and lawmakers in 2017 legalized the use of medicinal cannabis. But the country has yet to pass laws that would legalize its recreational use, or regulations for medicinal cannabis.
Lawmakers are now rushing to try to meet a Dec. 15 deadline set by the Supreme Court for legalization, with the support of Mexican President Andres Manuel Lopez Obrador who has aimed to removing the drug as a source of income for violent drug gangs.
Discussed by the Senate's health, justice, and legislative studies commissions on Friday, the cannabis bill would allow licensed sale of pot, let users carry up to 28 grams of the drug and grow as many as four cannabis plants in their homes.
It would also create the Mexican Institute for Regulation and Cannabis Control within the Health Ministry.
Among the restrictions, children and teenagers would be prohibited from smoking pot or being at all involved in its cultivation and sale, and the drug would not be allowed while driving.
The possible legalization of hemp, a product derived from marijuana, for industrial use in sectors such as construction or food production, has not yet been hammered out, a legislative staffer told Reuters.
However, the bill does propose allowing the sale, import and export of non-psychoactive cannabis products for industrial use.
Major companies are positioning themselves for a time when Mexico opens up what would be the world's biggest legal cannabis market in terms of population, where the drug can be lawfully cultivated and sold.
Pro-marijuana activists have called for the passage of the bill in recent weeks with a cannabis "garden" next to the Senate, where police have turned a blind eye to recreational users freely lighting up joints.