Graphic: Rorie Atkinson
Myriad challenges set back growth of once promising herb and its by-products

For decades many people, particularly from the Rastafarian community, advocated the opening up of a Jamaican cannabis industry.

It served as the theme for many protest songs, the most popular of which is arguably Peter Tosh's Legalise It.

But for many in the industry, the rush for “green gold” has been a roller-coaster ride as tough internal and external regulations are stifling growth in the lucrative trade.

The cannabis industry worldwide is valued at US$3 trillion but Jamaican investors face a mountain to climb in getting their share of the pot, as many legal variables are disrupting their march to conquer the frontier.

Regulations, regulations, regulations…that is the bug bear of players in the industry who say the rules, both inside and outside Jamaica, are making it super difficult for the industry to grow.

Another thorny issue is that the entities that exist and trade currently remain unbanked as commercial banks in Jamaica will not do business with cannabis enterprises.

According to Felicia Bailey, director of communications at the Cannabis Licensing Authority, the lack of banking facilities is one of the major impediments to the growth and development of the industry.

“The schedule 1 status of cannabis in the USA means that federally regulated banks and other financial institutions will not provide banking services to the cannabis industry, medical or otherwise. The US Federal Government's stance on the cannabis industry means that under some banking statutes, banks could face criminal and civil liability for providing services to cannabis businesses.”

Jamaica's banking industry is intrinsically tied to that of the US through corresponding banking arrangements between local banks and those in the US. For this reason, Jamaica's legal cannabis industry is severely impacted by issues of banking. To protect their corresponding banking arrangements, currently local banks are cautious and, in most cases, totally antagonistic in doing business with individuals and companies working in the legal cannabis industry.

For example, banks will not provide capital to build businesses within the industry; they do not allow cannabis businesses to bank monies and close accounts of employees and businesses within the industry.

The point is echoed by Alexandra Chong, founder of Jacana, one of the key players in Jamaica's cannabis industry. “We are totally unbanked and that is a nightmare.”

She noted that the issue is not unique to Jamaica and any positive movement will ultimately depend on the United States making cannabis federally legal.

“The United States is the largest cannabis industry in the world and they are preventing the rest of the world from entering their market by giving advantages to their companies. The industry is largely driven by regulations and that is the crux of the challenges that we are facing,” she said.

In April 2015, the Government of Jamaica amended the Dangerous Drugs Act (DDA) to decriminalise cannabis possession, legalise home cultivation for medicinal, spiritual and sacramental use, and create a new, licensed industry for medical cannabis and hemp.

There was much celebration and fanfare and investors rushed to get their affairs in order. But seven years later, many entrepreneurs have found it tough going and some have opted to alight the train out of frustration.

But one company that keeps puffing away is Jacana and its fortitude is borne out of a deep desire to see a Jamaican branded cannabis product make it big on the world stage.

“We believe that Jamaica has a rightful place on the world stage for cannabis, like Mexican tequila, French champagne or Cuban cigars. And we are committed to fulfilling that vision to bring world class cannabis products to Jamaica and the world and to create a winning environment for Jamaica.

“I believe in cannabis. I believe in its medicinal properties. It helped me get through law school. I am Jamaican, I represented the country in tennis when I was younger and I wanted to come back home and be involved in something that I can be proud of.

“We know that cannabis is disrupting some industries like alcohol and tobacco. We also know that the growth opportunities are significant but the pathway to realising those market sizes is the big question mark for many investors and entrepreneurs. Regulators are the bottleneck. They are the ones who dictate how large an industry can become. I don't envy the position of the regulators but they are the ones that set the rules.”

As at February 28, 2022, there were 97 licences issued for the handling of ganja in Jamaica. But the multi-tiered regulation process limits the extent of the activities that companies can undertake and the startup costs to some can be prohibitive.

Fees are associated with each category type and a non-refundable application processing fee and a security bond (where applicable) are payable per licence applied for. There are various categories of licences ( as shown in table).

The fees are payable in Jamaican dollars at the prevailing rate of exchange based on the Bank of Jamaica's weighted average.

So it is easy to see why the small ganja farmers from, for example, Westmoreland, which is reputed to produce the best strains on the island, are prohibited from entering the industry. This, industry officials believe, was not the vision Peter Tosh had when he advocated for legalisation in a hostile environment at the time.

Jacana runs a 300-acre farm in St Ann where it grows its products. The company would like to be able to purchase from small farmers but the regulations do not allow for that.

“The vision for us is to be able to buy from small farmers around Jamaica. We didn't want to be the main grower and in the future we want to be a mother farm in many ways and be able to give genetics and cloning out to other farms but the regulations just don't make it practical. It is difficult to buy from small farmers because they don't have licences. It is very difficult for the traditional ganja farmer to enter the space because of the regulations and it is very expensive.”

Under the regulations, individuals, companies and cooperatives can apply as follows:

Individual (for cultivation) must be 'ordinarily resident', meaning living in Jamaica for three or more years and the company must be registered with the Companies Office of Jamaica with 'substantial' ownership and control by persons 'ordinarily resident'. Cooperatives must have proof of registration or application for registration. In addition, the Regulations clearly outline persons that cannot apply either as individuals or as Directors as companies. These are:

Persons convicted of offences specified in:

Schedule 3 of the Criminal Records (Rehabilitation of Offenders) Act, 2014

Sections 92 and 93 of the Proceeds of Crime Act

Persons convicted of offences, not included above, under the Dangerous Drugs Act for which 10 years has not passed since the completion on the sentence, and during that time the person has not committed an offence involving violence or dishonesty;

Persons convicted of other offences, not included above, for which five years has not passed since the completion on the sentence and during that time the person has not committed an offence involving violence or dishonesty;

Any person convicted of a similar offence overseas.

Chong said: “There is no question in my mind that this will be a multi-trillion-dollar industry in the future, but the question is when will the opportunities become easier. I think it's about companies that really want to be in it for the long haul versus those that just want to get in for the green gold and get out and we have seen various cycles of that.”

The novel coronavirus pandemic dealt a major blow to Jacana's business but the organisation used the opportunity to open four stores, the latest being at Island Village in Ocho Rios. Despite being considered an essential service, Jacana was told they deliveries would not be allowed.

“Restaurants and pharmacies were allowed to deliver but we could not and our customers were not allowed to leave their homes to come to us. But we decided to persevere,” Chong said.

Jacana's business is split into three different segments – the medical cannabis line, the original flower line and the export line which ships cannabis flower to the European market. “We exported 50 kg recently, the largest quantity of flower that has left the island. The European markets have been slow in terms of how regulators allow them to open but we will give more details around the summer time,” Chong stated.

Jacana has a diverse line of products including tincture products which are being increasingly prescribed by doctors.

But Cannabis faces competition from new entrants to the alternative medicine and recreative products market like hallucinogenic mushrooms which can be bought in the market with no regulation and no red tape. “I think there should be regulations because it is unfair and there should be some kind of oversight to ensure a safe product gets to the market,” Chong said.

She added that Jacana is vertically integrated and probably has the most licences on the island. “We have to be licensed to grow our products, to process and to sell.”

With all the challenges she sees light at the end of the tunnel. “On the part of the Government I think there have been attempts to help but there is still stigma and there are many people who sit on certain boards that don't want to see cannabis thrive.

“You need to be willing to make bold decisions like Mexico, Uruguay and Canada have done,” Chong continued. “We need to move away from medical cannabis and go full force legalisation. Germany has just said it will go adult use and I think that is the only way we are going to see huge change but the Government has to be bold. I think under Aubyn Hill, the Minister of Industry, Investment and Commerce and the current CEO of the CLA Dainia Ashpole, there has been a tremendous amount of change in the last few months. I sense that there is a strong desire now to see this work.”

A ganja fieldoperated byJacana.
Jacana's first opened store at Manor Park, St Andrew.
BAILEY... the lack of bankingfacilities is one of the majorimpediments to the growth anddevelopment of the industry
BY ANDREW CLUNIS Senior staff reporter clunisa@jamaicaobserver.com

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