Mexico City council is considering the legalization of cannabis plants and the creation of private marijuana smoking "clubs".
The capital hosted a three-day forum on drug policy amid a growing debate in Latin America over the course of the region's deadly struggle against trafficking, with President Enrique Pena Nieto taking a stance against legalisation.
Esthela Damian, a councilman of the city's ruling Democratic Revolution Party (PRD), said AFP the proposals on the table include allowing the cultivation of three cannabis plants per person, as well as a system of co-operatives or "non-profit private clubs."
The US states of Washington and Colorado voted to legalise the recreational use of marijuana last year, a move that shocked the Mexican government as it faces cartel violence that has left more than 70,000 people dead in the past seven years.
Former President Vicente Fox, who was in office from 2000 to 2006, has come out in favour of legalising marijuana as a solution to the violence.
Mr Pena Nieto has vowed to tweak the security policy of his predecessor, Felipe Calderon, but he has kept troops on the ground to combat drug trafficking and detains kingpins while voicing opposition to drug legalisation.
Mexico City, home to almost nine million people plus 11 million more in its suburbs, has stood out from the rest of the country in recent years by legalising abortion and allowing gay marriage.
Ms Damian said, however, that the club concept is feasible, with a registry of members, production and consumption.