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Frustration mounts as events overtake ganja market

Published:Friday | December 2, 2016 | 12:00 AMNeville Craham
Diane Edwards, president of Jampro.
Hyacinth 'Cindy' Lightbourne, Chairman of the Cannabis Licensing Authority
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Jamaica is still trying to structure a market for a legal ganja trade, but progress is slow, and regimes are changing in prospective markets that could limit its commercial potential.

Amid it all, the nascent licencing authority is struggling to attract talent, some of it said to be linked to compensation.

All of this is a bit frustrating for JAMPRO president Diane Edwards, whose job it is to lure investments to Jamaica and facilitate access for local businesses in overseas markets.

"Things have not gone as fast as we would have liked them to," she said in a Financial Gleaner interview.

"At the moment, there is no export market because even countries that import, or that can import, are actually very restricted at the moment. Even Canada, where Prime Minister Trudeau said he would look at legalisation within two years of his election, up to now, it is not clear on what basis, or in what circumstances, and in what form Canada will allow importation," Edwards said.

The United States, which was slowly becoming more accepting of marijuana during the Obama administration, was seen as a source market that Jamaica could tap once it developed its own rules, under which local entrepreneurs could operate.

Arcview Market Research estimates that US cannabis consumption was worth US$5.7 billion in 2015. Arcview is projecting robust growth for 2016.

"Demand is expected to remain strong in 2016, with legal markets projected to grow to US$7.1 billion, a 26 per cent increase over 2015," Arcview said in its latest report. It also says that the market is expected to grow to US$21.8 billion by 2020.

But the incoming president of the US has tapped a man who is anti-ganja as its chief law-enforcement official attorney general-designate Jeff Sessions. So now, the prospects for Jamaica are not so clear.

Edwards says Sessions' well-known anti-marijuana stance will throw the industry into uncertainty, especially since there is a disconnect between laws at the state level and those at the federal level. Some states have legalised, or are in the process of legalising marijuana, but the drug is still illegal at the federal level.

It's been two years since Jamaica began inching towards a licensing regime for the ganja industry, but the early focus has been on research, not commerce.

"There were orders given by the ministry of science energy and technology. Those orders allowed for cultivation of relatively limited acreages for R&D purposes," Edwards said as she explained the discrete activities of the University of the West Indies and the University of Technology Jamaica.

As to whether the rest of the world might be stealing a march on Jamaica in the development of a legal ganja industry, Edwards offered a tempered view, saying while she was just as anxious to see faster development, the conditions and regulatory environment have to be right.

"We're trying to ensure that the regime that we set up is in

place and is functioning. This is the first order of business.

That regime has to be set up in accordance with the requirements of the international market," Edwards said.

JAMPRO is represented on the 14-member Cannabis Licensing Authority (CLA) and, therefore, has a firsthand view of developments since the establishment of the CLA in April of this year.

The regulations that operationalise the laws that decriminalised ganja and made research, cultivation, and sale possible, in some instances, were only recently promulgated.

Staffing, space issues

Staffing of the CLA and even the question of office space are yet to be settled, adding to JAMPRO's frustration. Edwards says a properly functioning CLA is critical to further efforts.

"If we promote to companies internationally ... we have to be at the stage where they can get an application form, that they can actually apply, and we can say, "Here is the time frame in which you'll get an answer"," Edwards said.

The CLA has been advertising the available posts, but up to this week, there were few takers.

In addition, the CLA has had to ask the Ministry of Finance and the Public Service to approve more staff positions, which also have to be filled.

"I believe in the last week that we got approval for an additional 11 posts. There should be advertisements for those posts in the coming weeks in order to fill the spots," said CLA Chairman Hyacinth 'Cindy' Lightbourne.

Lightbourne would not be drawn on the numbers or personnel recruited so far, but there are indications that the CLA is struggling to attract talent. Sector interests say it's because the pay is lousy.

The starting salary for the executive director of the CLA, which is classified as an SEG 6 post, is $3.547 million per year. That is less than half the salary of other chief regulators at agencies such as the Betting Gaming & Lotteries Commission.

Lightbourne declined to comment on compensation issues, instead referring the Financial Gleaner to the Finance Ministry.

Meanwhile, Edwards suggests that some licences for players in the medical marijuana business will be granted by year end. But whether that will translate into a significant wave of commerce is still to be seen.

"I cannot say that we have many Jamaican companies at this point that are willing to take the risk of getting into this market," said Edwards. "We have some growers, or potential growers, who are interested in this market, but do they understand or do they have the R&D capability? Do they have the international links to make this happen in the very short term?"

She is urging small farmers to gear up to supply processors, but also to ensure that the strains they grow satisfy the THC and CBD content levels that producers require.

The CLA, at last report, has received 89 applications for licences split 25 are for cultivating ganja, 18 for processing, 14 for research and development, eight for transporting, and the rest for retailing.

Lightbourne also said that some licences should be issued by year end.

Edwards expects that the approvals will begin to shed light on whether Jamaica can build a vibrant ganja industry.

"Once we know that we will have X number of companies that have a licence to process, or have a licence to grow, have a licence to produce, then we can start to look at things like projections. We are in a very grey area, and it's very frustrating," Edwards said.

neville.graham@gleanerjm.com