Hemp-based CBD a diamond in the rough
THE AVERAGE farmer in the Caribbean working with two acres of fertile land currently earns only between US$5,000 and US$10,000 a year selling produce in the local market. It is barely enough to get by. But what if there is a crop that is suitable for our climate that can allow the average small farmer to earn up to US$60,000 a year?
That crop is cannabis, or, more specifically, hemp grown for cannabidiol (CBD), which its adherents use for its purported health benefits. But despite exploding market growth of CBD products in North America, the Caribbean is yet to capitalise on it.
Once known for their strict regulations, several countries in the Caribbean region have begun to relax cannabis laws. St Kitts and Nevis decriminalised possession of small amounts of marijuana in August ahead of plans to create a cannabis industry, and late last year, St Vincent and the Grenadines passed legislation to begin medicinal marijuana exports. Perhaps, most significantly, Jamaica decriminalised marijuana use in 2015 and is also, four years later, preparing the groundwork for a cannabis industry.
Hemp is a crop closely related to marijuana with one significant difference – its level of THC, the substance that causes the famous hallucinogenic effect, is negligible. In Canada, hemp has been legalised since 2018. In the United States, several states began legalising CBD as a food supplement in the last decade, culminating in its nationwide legalisation through the Farm Bill of 2018.
The growing consumer demand for CBD has led to an explosion of new products, from food and beverages, to topical ointments, to cosmetics infused with CBD. The market is expected to reach US$22 billion in value by 2022.
This presents an opportunity for farmers in the Caribbean. Agriculture in the Caribbean can only grow if we develop an export-focused approach, shipping our products to larger markets. We are limited by both the small size of the local market and by what we can grow.
EASY TO GROW
It’s a common belief that cannabis is easy to grow in the Caribbean, and the same goes for CBD hemp. Like any crop that needs full sun, our equatorial location offers year-round sunlight, which gives us a natural climate advantage that translates into cost advantage, compared with greenhouse growers in North America.
However, good climate alone does not make growing CDB a slam dunk. To make CBD cultivation a viable industry, Caribbean countries must first bolster technical, marketing and legal capacities at the national or regional level. Technical demand for CDB is unlike other agriculture commodities, as the product needs to be grown and processed to a high standard to meet buyers’ specification for consistent chemical make-up of the product.
To achieve this, farmers need to follow good manufacturing practices, comply with global traceability requirements, and be consistent with their growing methods.
To foster a robust CBD industry, national authorities need to delineate policy that enables production and exportation of CBD. As of today, regardless of the legal status of cannabis, there is no sovereign Caribbean nation that has explicitly legalised CBD for commercial production and exportation. If this legal barrier is not removed, the industry will be virtually stillborn.
Even if the public and private players in the Caribbean do our parts, there may still be factors outside of our control. First, market demand may not sustain the current growth. Nobody truly knows the size of the market, especially the stable size.
The Caribbean risks losing ground to producers as they improve their efficiency while locking in markets and shutting out newcomers, especially if harvesting of hemp in more developed nations becomes mechanised.
The window of opportunity won’t be open for long. From government authorities to industry leaders to academic intuitions, the time to act is now.