Eight months after noting “some delay” with Jamaica’s new regulatory regime governing the export of medicinal cannabis in an October, 2018 interview, Wayne Isaacs says the rules are still likely months away. That is a difficult position for the Jamaican-born Canadian; he founded medical cannabis producer Green Stripe Naturals in his home country more than a year ago, primarily with an export-focused strategy based on a 2015 law, yet the government appears to have adopted a blame-the-entrepreneur approach. In a conversation earlier this week with Cannabis Professional, Mr. Isaacs discussed what he considers the biggest challenges facing Canadians in the Jamaican cannabis market, and where he plans to export his products once the rules come out. Those main points are reproduced in Mr. Isaacs’ own words below.
Foreign Ownership Restrictions
There are a ton of hurdles for foreigners. There is a rule that specifically applies to the cannabis industry where a foreign investor cannot have a controlling interest in a cannabis company. The government there really wants the industry to be built by Jamaicans but with the help of foreign investors, but without foreigners coming in and controlling everything. Our company owns 49 per cent and our partnerships include people that, let’s just say, employee groups and so on, that would also own a percentage. We do actually have a program whereby our employees in Jamaica actually have an opportunity to own part of the company.
Export Rule Delays
There have been several announcements that the government would finalize the export regime for cannabis, but it still hasn’t been done. The most recent announcement said that they would be done in April of 2019, but it is now June and there have been no updates since then. It has gone somewhat silent. When I reach out the response I get is that it is still in the draft stage and is being reviewed, but in terms of a date that is a moving target. Also, industry has not had an opportunity to view the draft. In large part [those regulations] will decide [if our business model works]. Potentially as much as 80 per cent of what we produce in Jamaica will be for export. [Have you gotten any sense of what they might look like?] I have heard they will be modelled off the Canadian import rules, but that is only what I’ve heard, they haven’t opened anything up to the industry about what they are working on, but I have been told the rules are going to be fairly flexible in order to assist the industry in Jamaica to grow rapidly and profitably. One thing Jamaica needs to do is ensure it is not getting left behind in terms of overregulation, but I think probably in the early fall the rules will finally come out since things tend to slow down a lot in Jamaica over the summer months.
Although cannabis is medically legal in Jamaica and operating a medicinal cannabis company is legal, banks will still not accept your accounts if you are a cannabis company. The simple reason being the banks have correspondent relationships with U.S. banks and the U.S. banks have made clear that any Jamaican banks that work with the cannabis industry runs the potential of losing their correspondent banking relationship. We have had to come up with a creative workaround. We are not generating revenue yet in Jamaica so we aren’t banking it yet, and we are doing construction with money from Canada so far. There are a couple solutions we are looking at right now; there has been some talk about the industry developing its own private banking facilities in Jamaica that only deals with Canadian dollars and euros, and never touches the U.S. dollar. Others in the Jamaican cannabis space have expressed interest. There has also been some talk about potentially using cryptocurrency as a mechanism, though I’m not on board with that one. I can’t ask my employees in Jamaica and my vendors and so on to set up crypto accounts so I can pay them.
We have gotten a lot of inquiries from Germany - some from pharma but also what you would call distributors or agents in Germany who are looking to broker these products to the medical community in Germany. We have had a fair bit of inquiries our of Germany specifically but we are also looking at various other countries in the E.U., like Spain and France and Italy. Those are the markets that are looking for these types of premium-strain cannabis.