A Cure for the Canna-Biz?
Medical cannabis has increasingly captivated legal, political and corporate interest on a global scale, as more than 20 countries have moved towards legalization of cannabis for medicinal use, and even some towards recreational use. On the other end of the spectrum, the United Nations still classifies marijuana as a psychotropic drug with no established medicinal value, and the Federal Laws of the United States continue to prohibit marijuana. However, an article published by Forbes magazine on March 1, 2018 predicts that spending on legal cannabis worldwide is expected to grow to US$57 billion by 2027.
In light of such optimistic predictions, the economic potential of the medical marijuana industry in Jamaica continues to be a source of great debate and intrigue. As we celebrate and reflect on Jamaica’s 56th birthday, it is well-known that marijuana has been a longstanding feature of folk medicine, culture and religious practices, and Jamaican-grown marijuana is internationally renowned. The relatively new development, however, is the legislative and regulatory regime aiming to translate that brand popularity into a burgeoning and reputable industry.
The Licensing Regime
In order to operate in Jamaica’s medical marijuana industry, an individual or entity must first obtain a licence from the industry’s governing body, the Cannabis Licensing Authority (“CLA”). About two years ago, the CLA issued interim licensing Regulations, which constitute the current legal framework for medical marijuana. There are five categories of licences available: cultivator, processing, transport, retail and research and development.
As at the end of April 2018, the CLA published that of the 439 applications it received, it granted 142 conditional approvals and 16 licences. The disparity between the number of applications received and the number granted indicates that qualifying for a licence is not an easy feat and requires adherence to particular standards.
Applying for a Cannabis Licence
Applications may be made by individuals, companies, or societies, and each applicant may apply for more than one type of licence. An individual applicant must be at least 18 years old and ordinarily resident in Jamaica for at least three years immediately preceding the application. Societies must be either a co-operative society registered under the Co-operative Societies Act, or a society registered under the Friendly Societies Act.
An applicant company must be incorporated under Jamaican law, or be a business registered under Jamaican law, and be substantially owned and controlled by persons ordinarily resident in Jamaica (“Jamaican residents”). Though the word “substantial” is not defined in the Regulations, the CLA has published that it requires that applicant companies have greater than 50% ownership and control by Jamaican residents. Foreign investors interested in entering the industry must therefore partner with Jamaican residents in order to qualify for a licence.
Criminal safeguards have been included in the Regulations to prevent persons with certain types of criminal convictions from entering the industry. There is permanent disqualification for persons convicted of money laundering offences and certain criminal offences which are not subject to expungement, including murder, kidnapping, robbery, burglary, certain sexual offences and other serious offences. For other criminal offences, the disqualification period depends on the type of offence, spanning either 5 or 10 years from the completion of serving the sentence, or if sentenced to a fine, from the date of paying the fine. This is subject to whether the person has been convicted of an offence involving violence or dishonesty during that time. The CLA therefore scrutinizes police records of individuals, company directors, members of societies, and also employees of the applicant.
The aforementioned criteria are just the preliminary hurdles, as an applicant must also satisfy a plethora of additional requirements specific to the type of licence being applied for. The CLA also indicates that it conducts a ‘fit and proper’ assessment of each applicant, including an assessment of character and integrity, skills and experience, financial resources, and history of compliance with the legislation. For applications from companies or societies, this assessment is conducted on the persons in effective control of the applicant’s operations.
The application process involves completing all relevant CLA application forms, providing all requested supporting documentation and due diligence information, in addition to paying the requisite fees. Once the application is made, the CLA will firstly assess whether to grant conditional approval subject to certain terms, which usually requires that the applicant satisfy certain preconditions within six months, and thereafter the CLA will assess whether to grant a licence. If granted, the licence is issued for a limited term, 1 year for a cultivator’s licence and 3 years for other types of licences, subject to applications for renewal. After the granting of the licence, the CLA retains the power to inspect and monitor the licensee’s operations, in order to ensure compliance with the terms and conditions of the licence, the legislation and the Regulations. In the event of non-compliance, the CLA may issue directions, revoke or suspend a licence.
It is undisputed that a lot has changed in the local landscape for medical cannabis over the past few years. However, there are still areas that remain unchartered, such as the creation of import and export regulations by the CLA, and the provision of banking services for the cannabis industry. Notwithstanding these teething pains, the Government has expressed commitment to facilitating the development of medical marijuana in Jamaica. It is exceedingly important that prospective applicants and licensees obtain thorough and reliable advice, in order to successfully navigate the evolving medical marijuana industry.
Stephanie Ewbank is an Associate Attorney-at-Law at Myers, Fletcher & Gordon, and is a member of the firm's Litigation Department. Stephanie may be contacted via firstname.lastname@example.org or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.