Jamaicans are being urged to view cannabis as an economic earner in order for the country to fully tap into the multi-billion-dollar global industry.
Chairman of the Cannabis Licensing Authority (CLA), LeVaughn Flynn, told Kalilah Reynolds on Taking Stock recently that along with mounting public pressure, more countries are moving to legalise cannabis because it has the potential to significantly enhance economies.
He noted that over the next three to five years, the global cannabis industry will be valued between US$42 and US$96 billion. Between 2018 and 2020, he said the world's largest cannabis market, the US state of California, collected over US$1 billion in taxes from cannabis. Likewise, New York expects to rack in about US$350 million in tax revenue per year once it establishes its cannabis market.
“So the question we have to ask ourselves in Jamaica is what piece of that pie do we want?” asked Flynn. “Even if Jamaica has a small part of that pie it can have a tremendous impact not only on our economy but our public health as well.”
The CLA chairman said while the entity cannot speak about Jamaica's legal cannabis industry in quantifiable terms currently, things have been happening.
As at April, approximately 80 licences have been granted by the CLA across the cultivation, retail, transport, research and development and processing fields. Another 300 conditional licences have also been issued; however, many of those applicants have had to freeze their applications due to financial limitations.
“The reason for persons being stuck there is tied in with the limitations in banking and financing. They can't acquire the capital needed to build out their facility to move on to the next stage for the licence to be granted to them,” said Flynn.
Flynn said banking remains the number one challenge for the global cannabis industry, but legislative changes in the United States are expected to change the landscape of the industry soon. In April, the US House of Representatives approved the Safe Banking Act to allow banks to participate in the cannabis industry. At the Federal level, the MORE (Marijuana Opportunity Reinvestment and Expungement) Act has also been passed to remove cannabis from the US Controlled Substances Act.
Flynn reasoned that once both Acts are signed off by President Joe Biden, local banks which have correspondent banking relations with US banks will get permission to start investing in the sector.
However, Flynn disclosed that the CLA has been working on a cultivators transitional permit to make it easier for more players to enter the sector. Flynn said the document is specifically geared at transitioning the small farmer from the illicit market to the legal market by reducing the barriers to entry. The drafting instructions are being reviewed by the legal team at the Ministry of Industry, Investment and Commerce.
“Those are two main things: the cost and it will be 50 per cent less to enter the market under the permit. There's also the infrastructure requirement, the fencing, the CCTV allocation, and that will also be curtailed as well to fall in a price bracket that is more accessible for the small farmer,” Flynn explained.
Meanwhile, Flynn said regulations governing the local cannabis industry will need updating if the country wants to further exploit the economic potential of cannabis. At the same time, he said the requirement that more than 50 per cent of any licensee must be owned by Jamaicans will not likely change. This, he said, will ensure that citizens are positioned to have an equal opportunity to own a part of the growing industry.
“We need laws that are more commercially focused. It's an industry to be grown and contribute to economic development so we need regulations that support that objective,” Flynn said.
Fylnn has also labelled accreditation as a catalyst for more growth in the local sector. He said some licensees with clear objectives would have already gone out to achieve some sort of accreditation.
CEO of the Jamaica National Agency for Accreditation (JANAAC), Sharonmae Shirley, explained that accreditation is the process by which an authorised organisation gives formal recognition that a conformity lab, inspection body or certification body is technically competent to carry out specific tasks within its scope of accreditation.
In the case of cannabis, she said accreditation will provide the level of assurance that the contents of the products produced, whether in the medicinal or recreational field, are fit for purpose. She said it would be most relevant before distribution and therefore minimises the risks for consumers. Additionally, the process provides the credibility to defend producers against litigation.
“We believe that if the growers [and] manufacturers use accredited institutions to attest to the quality of the product they have produced, this will redound to the benefit of the industry and certainly support the exportation of the cannabis products that are manufactured as well as see to an increase in the domestic trade in the local market,” Shirley said.
Despite several standards across industries in Jamaica, there's no mandatory regime for their use. Shirley said it's against this background that efforts continue to have some regulations implemented to support at least the mandatory acceptance of accreditation within certain areas.