Removing obstacles of ganja industry
AUDLEY SHAW, the minister with responsibility for industry and agriculture, tends to be optimistic and brings an aura of energy to the portfolios to which he is assigned. That, in part, is why we believe that with a bit of luck, he could find reasonable success in his current job. Mr Shaw is optimistic about Jamaica’s nascent cannabis industry. He has been talking it up, both locally and abroad. He was recently in the Canadian province of Ontario, talking with provincial government and private-sector officials on the potential for investing in ganja businesses in Jamaica.
“Canada and Jamaica have a long history of working together, and this opportunity to work together in the cannabis industry opens a world of opportunity for both countries,” Mr Shaw told a function in Toronto.
We agree with Mr Shaw about the global potential of the industry and about the logic of Canadian researchers and entrepreneurs considering the Jamaican option. But as bright as the prospects appear to be, there is much work to be done, some with international partners, for Jamaica to be really attractive as a place for serious long-term business investment in the marijuana and hemp industry.
More than 40 years ago, University of the West Indies (UWI) researchers Manley West and Albert Lockhart were at the forefront of research for the medicinal use of marijuana, from which they developed drugs for treating glaucoma and asthma. But while Jamaica’s notoriety grew as a major exporter of highly potent illegal marijuana, serious research all but stalled.
Things, though, are changing since Portia Simpson Miller’s administration, strengthened by similar moves in several US states, in 2015, changed the law to decriminalise the possession of small amounts of ganja for personal use and establish a framework for the establishment of an industry around cannabis and hemp.
Major companies like Lascelles Chin’s Lasco Manufacturing has announced that it is entering the research and product development side of the business, as has Henry Lowe’s Biotech Research, which is already into nutracueticals. Balram Vaswani operates an industrial-scale marijuana farm in St Ann and has opened a café and herb house in that parish.
Such investments are not cheap. Merely applying for a licence will cost an individual US$300; for a company, it is US$500. If a company wanted to cultivate, say, five acres of ganja for medicinal, scientific, and therapeutic purposes, there would then be a licensing cost of US$2,000, which would increase by a third if the acreage was expanded. And if that grower intended to process the ganja in a 200-square-metre facility, there would be another licensing fee of US$10,000. Additionally, there is a US$10,000 basic fee for transporting the marijuana, plus further costs based on the number of vehicles to be used. These fees are separate from other costs for establishing and operating the business.
Having scaled those hurdles, the entrepreneur is faced with uncertainties beyond the normal risks of the markets. A major one is that banks are unlikely to maintain an account for his enterprise because marijuana remains an illegal proscribed drug under United Nations drug treaties, and critically, in America, it remains illegal at the federal level, despite the decisions of a number of states. For that reason, Jamaican banks, under threat of being delinked by global banks that are concerned about the dangers of money laundering, now worry about being further blackballed because they hold accounts for marijuana-related companies.
Mr Shaw recognises the problem and has said that that is something local banks must seek to resolve. As former finance minister, he no doubt appreciates that it is not a matter Jamaica can resolve on its own. He has to insist that the Jamaican Government not only become aggressive, but co-opt its CARICOM partners in this effort if this potential growth industry is to have a fighting chance.