- Canada received its first and only shipment of extractive oil from Jamaica in September
- Businesses say a prohibitive licensing process is delaying the growth of an export market
- Government says entrepreneurs are mostly to blame for licensing problems
Jamaican marijuana is among the most coveted in the world and, with the opening of Canada’s recreational regime, should be poised to flood the medicinal market, but local entrepreneurs are complaining of a prohibitive licensing process that is hampering their efforts to cultivate their businesses.
Canada received its first and only shipment of extractive oil from Jamaica in September. The actual dried bud is not yet regulated by either Canada or Jamaica for export, but the potential market for medical marijuana is worth billions of U.S. dollars, by some estimates.
And while Meanwhile, in Jamaica, entrepreneurs are complaining of wait times of up to two years for a license to formally enter the industry.
“The problem is that they are taking a very long time to issue the licenses. They keep repeating and asking the same questions,” says Luke Issa, the CEO of cannabis company Frazzle. "This will hold back the entire industry.” He says the Cannabis Licensing Authority (CLA) is not providing enough guidance to those looking to get into the industry, and that the fees are out of reach for a lot of farmers. Mr. Issa has been waiting two years for a permit to cultivate, research and sell his products.
Andrew Cummings, a farmer who has been growing marijuana for 30 years, says he submitted his application in January of this year and is still waiting. “They always need something else, even when you think you are finished filling out forms,” he says.
Janene Chin, Director of Research and Development for the CLA, acknowledges that emotions may be high surrounding the process, especially given ganja’s cultural significance in Jamaica. However, she says that most of the responsibility for the delays lie with the entrepreneurs not meeting requirements.
“I appreciate that there may be a concern or a perception that we are not ready, but Jamaica has been doing this for barely two years,” she says, referring to the 2015 legalization. “We have never had a medical marijuana industry.”
To date, the CLA has received 500 applications and, by the end of September, had issued 24 licences. There are also 138 “conditional licenses” ready to be issued, Ms. Chin says, explaining these businesses will be allowed to operate while still leaving room to accommodate any changes that may be needed to meet standards.
Ms. Chin adds that other delays come from the fact that the United States is the “correspondent” bank for Jamaica, which means all transactions flow through American banks. So if Jamaica is doing business with Canada, the U.S. is involved as a third party, and marijuana is not yet legal federally. As a result, Jamaican banks are wary of contravening U.S. federal laws surrounding profiting from the proceeds of crime.
Joan Webley is a lawyer specializing in intellectual property, but she is also president of Itopia Live Limited, a medical cannabis company that has received a conditional license and is about to become operational. She says the CLA has done a lot in the course of a few years with finite resources. “What the CLA have been able to achieve in a short time is a solid start of a framework, but they need more resources. They are building the plane while they are flying it,” she says.
With the passage of the Dangerous Drug Act in 2015, possession of two ounces or less of marijuana was decriminalized, and people were also permitted to handle it for medical, scientific and therapeutic purposes. The same legislation created a licensing authority, which is in the process of drafting legislation that adheres to the United Nations Single Convention on Dangerous Drugs.
The CLA is a government agency under the Ministry of Industry, Commerce, Agriculture and Fisheries. To date, it has set up five categories of licenses: cultivation, transportation, retail, research and development and processing. it costs US$300 per license for an individual to apply to grow marijuana, while it is US$500 per license for a business to apply. The licensing fee is between US$2,000 and US$10,000, depending on the type of license. The CLA has also issued detailed requirements for actually cultivating marijuana, including the type and height of fencing, doors and windows; security and growing, processing, storage and handling practices. According to a diagram on the CLA’s website, the process should take roughly six months, but local reports show that only three businesses have been issued licenses.
Dessy Pavlova, a Toronto-based activist, says that the Jamaican market is currently restricted to its own borders. “Right now, the Jamaican market is essentially in Jamaica. There is unlikely to be a market for exports until extracts are added to the mix,” she says, explaining that extracts are more easily able to meet international standards than the actual dried bud.
However, some Canadian companies are entering into joint ventures with Jamaican farmers and other entrepreneurs. For example, CROP Infrastructure Corp., is building a facility in Western Jamaica; and the Jamaican Medical Cannabis Collective has invested US$2-million in Jamaican cannabis research.
Paul Burke, director of the Ganja Growers and Producers Association, the industry should not be so heavily regulated. He says the CLA is creating a “totally prohibitive, burdensome bureaucracy.” Some farmers and entrepreneurs already at a disadvantage, he says. “They have not been left behind, they have been left out of the industry.”
Maurice Ellis, vice-president of the Young Ganja Entrepreneurs Association, believes that there are natural synergies with Canada when it comes to cannabis. However, he objects to the type of government involvement to date. Mr. Ellis says there should be a registry rather than a licensing system. “Ganja in Jamaica is like maple syrup in Canada, if you want to make maple syrup, you can make maple syrup, you don’t need a license,” he says explaining that ganja is so embedded in Jamaican culture that it does not need to be so closely regulated, especially in light of the necessity to protect indigenous farmers.
He says the CLA have yet to develop an export protocol, but in the meantime, the local licensing process is extremely prohibitive for many. Startup costs alone can run into the hundreds of thousands of dollars for things that are required by government, such as chain link fences, a security firm, and all the equipment necessary to meet standards. The costs are often out of reach for small farmers, the man in his water boots, khaki pants and with a cutlass, Mr. Ellis says. “It’s not profitable or practical for a Jamaican to be paying $10,000,” he says. The government does have a program in place to protect small farmers, however.