The Ganja Growers and Producers Association of Jamaica (GGPAJ) is proposing the National Peoples' Cooperative Bank as a solution to the banking services conundrum in which the country's fledgling legal marijuana industry finds itself.

The possession and smoking of specified quantities of ganja, and its use for medical, therapeutic and scientific purposes was decriminalise under The Dangerous Drugs Act which was ammended in 2015. The industry is regulated by the Cannabis Licensing Authority, which up to February this year said it had issued 202 conditional approvals from a total of 563 applications for licences since it was created.

But the GGPAJ says entrepreneurs are having a difficult time establishing buisnesses because the island's commercial banks are refusing to accept ganja money.

Special advisor to the GGPAJ, Orville Silvera says a cannabis bank, using the existing PC bank system, would relieve mainstream financial institutions of the apprehension surrounding facilitating transactions linked to ganja.

“It is important to note that the cannabis bank doesn't necessarily have to be a bank that is associated with our current financial system. As it stands right now, all financial institutions are intermingled. The economy is locked in by the financial system so all the transactions in finance must come through this system, which involves credit unions, insurance companies, commercial banks, [and] investments banks, all under the auspices of the Bank of Jamaica,” he explained in a Jamaica Observer interview.

Silvera pointed out that PC banks, which provide credit and other financial facilities to the agricultural sector, are perfectly positioned to serve this niche market.

“This bank already exists right around Jamaica; certainly, every parish capital has a PC bank. You can have branches similarly in districts wherever they are, people can make deposits, or go online,” he explained.

The NPCB is the premier community bank for rural agricultural development in the island, providing a range of services to members, such as savings instruments, loan facilities, legal services, bill payment services and family indemnity plan insurance.

Silvera suggests further that the Development Bank of Jamaica (DBJ), as a direct state institution, should be the source of capital funding to suit the needs of the legal cannabis industry. He said this would also eliminate the intermingling of funds with the mainstream and commercial financial network.

“The funds go directly to the PC bank, which would now be a ganja bank. These funds would be accessed by farmers and ganja-related businesses. These ganja-related businesses under a legal system would operate within a loop – I grow, you process, I sell to you, you sell to the retailer. So all of these businesses would have accounts with these banks,” he outlined.

Furthermore, Silvera said workers in the industry would expend money back into the economy, but that by the time those funds become intermingled with the mainstream financial system, it would be too far removed from the cannabis industry to have any negative implications or repercussions.

“This is the general model. It operates only among ganja-related entities, whether you farm, transport, distribute, marketing, whatever it is that allows you to be arms' length, you're good. But shorter than an arms-length, you bank with this bank,” he said, pointing out that a similar model has worked in other jurisdictions.

However, Silvera, who has chided the local banking sector for what he sees as cowardice in its approach to services for the legal ganja industry, said he does not expect the sector to embrace this idea of a dedicated financial institution for cannabis businesses. It would view it as a threat in the long-term, he said.

“But they are expecting it (the benefits) to change down the road, and while they wait, the industry goes bank-less. They're expecting to have the benefits down the road, but they don't want it taken away from you right now,” he asserted.