Gabriel Moreno, 36, looked down when the verdict was read by the jury foreperson.
"We, the jury, find the defendant, Gabriel Moreno, not guilty," the jury foreman announced.
Prosecutors are stunned he wasn't convicted in the case they called a botched drug deal.
"These people are some people who did some terrible stuff," said prosecutor Matthew Ludowig. "I don't know why the jury didn't find them credible, but they have spoken through their verdict."
Another man is serving life in prison for the 2014 murder of Menchaca.
The victim's cousin, Candie Dominguez, testified about cutting up and cooking the body.
Dominguez made a plea deal in exchange for her testimony. She'll receive a maximum of 30 years in prison.