Wed | Sep 20, 2017

Imani Duncan-Price | Birthing ganja industry – more than regulations

Published:Sunday | September 25, 2016 | 9:00 AM
Imani Duncan-Price
A section of UTech's marijuana nursery.
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One of the last times Jamaica created a new industry innovation almost from scratch was with the all-inclusive resort concept. Though that model was pioneered by Club Med in 1950s, it was Abe Issa who started the all-inclusive package in Jamaica in 1978 with Couples Resorts. Then Butch Stewart came along in 1981, and some would say the rest is history. So how does this relate to Jamaica's newest industry endeavour with medical and therapeutic cannabis?

After all, there was a pre-existing tourism industry with a Jamaica Tourist Board (JTB), which was established in 1955, and the Tourism Product Development Company (TPDCo), established in 1996. The Jamaica tourist industry evolved within an internationally established context. The comparative relevance lies in the fact that we now have a national legal framework and a few country examples to reference and learn from. But more important, even with all of this, leaders in Jamaica today find themselves trying to create an almost entirely new business model with this medical and therapeutic cannabis in Jamaica. Is Jamaica thinking about it comprehensively as such?

Countries with a legal, national medical and therapeutic cannabis regime are Canada, Israel, and Holland. The Czech Republic has an emerging national programme. Twenty-five states in the USA have state-level legal medical cannabis programmes and 13 additional states operate with a CBD-only legislation (CBD is one of the medicinal elements in cannabis). Thirty-eight states operate with some form of legalised framework for cannabis, while there is no national legal regime in the USA as yet. Come November 2016, there are ballot measures to liberalise laws involving marijuana in nine states (including five seeking to add recreational use to their existing legal medical cannabis regime). That means the USA could have, in total, 42 of its 50 states with a legal medical cannabis regime by end of year.

 

CONSEQUENTIAL EFFECT

 

Consequently, many analysts surmise it's just a matter of time until the USA makes the national push for a national medical cannabis regime and then potentially, a regime for recreational cannabis eventually. The USA doing this is likely to have the consequential effect of changes to relevant UN treaties on dangerous drugs. As the next scheduled consideration for change in the national legal standing of marijuana in the USA will happen in a few years, Jamaica needs to use that time to get its nascent industry on the right substantive path. How will Jamaica proceed?

As the world proceeds apace with Colombia and the Cayman Islands coming into the medical cannabis mix, it is opportune for Jamaica's leaders to come together to decide on the vision and business model for cannabis. Currently, much of the work is being driven by the Cannabis Licensing Authority (CLA). However, while the CLA is critical for the industry to be set up legally with effective regulations, this should be done in the context of the vision for this new industry.

What is the vision for the cannabis industry ultimately in Jamaica in 10 years? What is the role of small farmers, many of whom maintained the industry and brand, albeit illegally for the last 60 years? How are local tertiary institutions developing courses relevant to support the growth of this industry? Are they setting up partnerships with Oaksterdam University, a cannabis-business focused institution? How are state agencies and actors being reoriented to be an enabler of the vision for this new industry when, for the last 60 years, the only state arm focused on cannabis was the police, and that was through raids and burning fields? As Senator Mark Golding stated at the recently held CanEx Conference in Montego Bay, "How do we get JBDC, RADA, SRC, Bureau of Standards, JIPO, and other such agencies to really support the growth of this industry?"

How can the Bank of Jamaica be sufficiently persuaded to establish a well-regulated financial solution to support the emergence of the local medical and therapeutic cannabis industry? Legal cannabis entities in the USA have significant challenges when it comes to being banked and are known to carry sacks full of cash to pay taxes and buy cannabis-related machinery and materials. This is because banks are fearful of the consequences regarding potential money-laundering. With Jamaican financial entities already facing an issue with correspondent banking with international institutions, they would be gun shy to facilitate the growth of this business that has not yet been made legal internationally. Every industry needs financing to grow.

 

Business Model

 

Well, for starters, all stakeholders need to know the ultimate plan and ideally be a part of defining that plan, that business model. Answering these questions is important now, upfront, as Jamaica drives for inclusive growth as a means to achieve progress and prosperity without the significant inequalities of the 1960's.

So Jamaica can make some conscious decisions now on guiding principles for the business model in this new industry. Dr Kadamawe K'nife, director of the Office of Social Entrepreneurship at the UWI Mona Business School, in his presentation at the CanEx Conference, put forward that Jamaica's approach to this new industry should be from a 'Ganja Agro-Enterprise' perspective, where the outcome is "about wealth creation, not welfare creation and leverage our unique advantages - thus a medical, therapeutics and wellness cannabis" industry. His view is that if Jamaica proceeds in the development of the industry in the way it is doing now, almost in silos and primarily legalistic, it will lead to concentration of wealth in a few groups, limited value-added throughout the country, and continued lack of trust between citizenry and state - and thus lack support for the CLA and other state related cannabis agencies.

The CLA is to be congratulated for holding many stakeholder meetings to date. The information garnered must be leveraged effectively. Now is the time for the Ministry of Industry, Commerce, and Agriculture and relevant government agencies, along with parish representatives of the Ganja Growers and Producers Association of Jamaica, members of the Economic Growth Council, CEOs, and chief risk officers of financial institutions, relevant academics from tertiary institutions, and serious local investors in the cannabis industry to gather for a series of three-day retreats. The goal would be to collectively define the parameters and principles for this new industry.

Once that is done, the CLA can more effectively fulfil its mandate within that context and the players who are needed to help jump-start the 'medical, therapeutic, and wellness cannabis Industry' will know the parameters in which to participate. The cart cannot lead the horse.

- Imani Duncan-Price is co-executive director of the Caribbean Policy Research Institute and a World Economic Forum Young Global Leader. Email feedback to columns@gleanerjm.com and fullticipation@gmail.com.