Green gold fails to sparkle

The promise of Jamaica's 'green rush' through ganja liberalisation was already slipping away for New Level Farms before Hurricane Beryl hit Jamaica's southern coast in July, with devastating consequences.

“Eighty per cent of my farm was destroyed in the aftermath of Hurricane Beryl. Everything was flattened. All of my greenhouses were destroyed … [although] I was able to salvage some of them (plants),” said a spokesperson, describing the destruction at the two-acre property in St Elizabeth.

The farm suffered extensive damage: a perimeter fence torn down, a wrecked surveillance camera system, and partial damage to the solar, water storage, and electrical systems.

“I lost pretty much half of my harvest. It takes me five to six months from clone or seedlings to harvest. That is right up until cutting and drying. Imagine all of that money that [was] put into that – everything for the last five months. Gone,” the spokesperson lamented.

The blow is estimated at US$300,000 (J$48 million), covering the loss of the harvest and infrastructure, including two greenhouses of 4,500 square feet each and a smaller one of 1,500 square feet.

Since Beryl, an outbreak of Septoria leaf spot – a fungal disease that affects a wide range of plants – has compounded recovery efforts.

Despite the Cannabis Licensing Authority (CLA) reaching out for a post-hurricane status update and a report submitted, support remains elusive, the farmer said, noting that about a dozen more farmers are reeling.

“We don't have insurance and there is nothing in place by the ministry or the CLA, like a pool for helping against acts of God,” the official noted. “To this date, I don't get any [information] on what CLA is doing, or the ministry.”

The Sunday Gleaner asked the Ministry of Industry, Investment, and Commerce (MIIC), which has oversight for the CLA, on August 20 about relief for ganja farmers, but it has not provided a response.

The alleged lack of support underscores a broader sentiment of abandonment felt by some farmers in the industry, who see the hurricane's impact as emblematic of their struggles. Critics argue that the punitive regulations are stifling innovation and that a slow march to include smaller, traditional farmers is restricting the growth of the sector.

“What the Government can do is a great question. But [what] is the Government willing to do? ... That is what we've been asking the Government,” said Ras Juta, a traditional farmer from Westmoreland with nearly 40 years of experience.

He argued that the current regulatory approach fails to consider Jamaica's cultural history of ganja farming and imposes onerous requirements on subsistence farmers.

“ ... The whole protocol that they ... put to the farmers in terms of the fence, the height of the fence, the fees and all dem sup'm deh,” Juta said, referring to the CLA's licensing requirements for cultivators.

“What the Government has to do now is to go into … those communities, and for the CLA to send in agents into those communities to hear from the people and see how they can regulate the people dem into the industry,” he suggested.

CLA'S MISSION, SCHEDULE 1 ROADBLOCK

The CLA was established under the 2015 amendment to Jamaica's Dangerous Drugs Act to manage cannabis licences for medicinal, therapeutic, and scientific purposes. Since then, more than 150 medicinal cannabis licences have been issued.

There have been several changes and ongoing efforts to improve the sector, the ministry said in response to Sunday Gleaner queries about the concerns and calls for changes.

“The authority continues to seek collaboration to improve field operations and has simplified the application and compliance processes. The authority has made considerable progress in reducing the application processing time by strategically implementing systems to give conditional approvals in less than 90 days, down from the previous two-year time frame,” said the ministry in an August 20 response.

The ministry, which is led by Senator Aubyn Hill, also noted that legislative and regulatory changes are under way to enhance the industry's appeal to investors and small farmers.

It also noted that the CLA has introduced a deferment policy allowing licensees to pay fees over an 11-month period, and has overseen an increase in retail establishments from 10 in 2022-2023 to 17 in 2023-2024. Additionally, eight out of nine licences issued this year were granted to new entrants.

The CLA issues five types of licences – cultivation, processing, transportation, retail, and research and development – with costs ranging from US$2,000 for a licence to cultivate up to one acre, to US$10,000 for a transportation licence. These fees, along with security bonds, application fees (US$300 for individuals and $500 for companies), and extensive background checks, present significant barriers for many small growers. Cultivators have to renew annually.

The industry is facing renewed scrutiny after The Sunday Gleaner exposed concerns about hiring decisions at the CLA and the competence and leadership of the staff regulating the industry.

“The medical cannabis industry faces significant challenges which inhibit its full growth and expansion potential, the ministry acknowledged, pointing to efforts to refocus the perception of the regulator as an enforcement agency “to that of a facilitator” that is business-friendly.

The ministry cited ganja's classification as a Schedule 1 drug by the United States, Jamaica's main trading partner, and the United Nations, through the 1961 Single Convention on Narcotics, to which Jamaica is a signatory. The treaty restricts export opportunities and curtails banking, forcing local banks to avoid the sector to protect vital correspondent banking relations with international financial institutions, leaving the industry cash-driven.

The global cannabis market, valued at US$44 billion in 2022, is projected to grow from US$57 billion in 2023 to US$444 billion by 2030, according to Fortune Business Insights. Another leading business intelligence provider, Statista, estimates that Jamaica's revenue from the medical cannabis market will reach about US$39 million in 2024, based on an annual growth rate of 3.93 per cent.

The latest figures are not immediately available, but up 2021, the CLA said trading figures within the closed-loop system, where licensees only do business with other licensees, were US$894,749 for the 2019-2020 financial year and US$627,089.79 in 2020-2021. Up to March 2023, some 224 export authorisations were issued to Jamaican companies, while two import authorisations were granted.

LOSING SKILLS TO FOREIGN OPERATIONS AMID CHALLENGES

Maurice Ellis, a researcher and director of a medicinal cannabis lab in St Andrew, believes that a fundamental handicap to the industry's development is the rigid system that excludes traditional farmers, growers who have cultivated ganja for decades despite state repression.

“Nine years later, the challenges that we had in the beginning are some of the same challenges that we have today,” said Ellis, an agroprocessor and a vice president of the Ganja Growers and Producers Association of Jamaica.

He emphasised the need to include all stakeholders.

“We found that to be a challenge because we've set up an alternative development programme and made suggestions [to the Government] repeatedly; had meetings for years to say, 'Okay, let us build out this programme to include all the traditional farmers to get them involved so that they can finally benefit from this green gold as well as brand Jamaica',” Ellis explained.

Despite these efforts, Ellis noted that the programme has not been fully implemented. His association once included over 3,000 traditional farmers, many of whom remain unable to meet the stringent requirements for licensure.

The slow integration of traditional farmers into the regulated industry has led to some of Jamaica's best growers being lured away by wealthy cannabis companies from Canada and the United States, according to Ellis.

“We have our skill set and technical expertise in ganja being exported. It's a good thing in one aspect, but in another aspect, you find that we're losing our best farmers,” Ellis said.

He emphasised that traditional farms hold unique value, with land-raised strains that may possess profiles capable of treating severe conditions.

In 2023, the Government faced criticism for granting a licence to a Canadian company to import a strain for research purposes.

Minister Hill defended the decision by stating the strain was not available in Jamaica.

In addition to the CLA research licence, growers can get ministerial orders for more extensive research. However, many farmers believe there is a need for a more structured ecosystem that incentivises research and development of by-products to move up the value chain.

Shiny equipment parked at the mothballed St Andrew lab for over two years reflects the lack of progress in research aimed at improving crop production and developing value-added products. Ellis mentioned ongoing efforts to revive the lab, representing a significant investment of over US$1 million (J$158 million) now sitting idle.

Ras Juta echoed the need for more research output and practical application.

“Take the lab and bring it into the field; [take] the research, bring it into the field,” he said, urging the authorities to speed up the inclusion of traditional farmers.

Amendments to interim regulations to provide a transitional special permit for small-scale ganja cultivators, aiming to simplify entry into the sector, are under consideration, the industry ministry revealed.

“The proposed draft regulations will also seek to make special permits much more attractive to small farmers, with some expected relaxed requirements, which will enable them to enter the sector and subsequently transition to existing licences under the regulations,” the ministry told The Sunday Gleaner.

A 'special community permit' is also being considered to allow collective cultivation of medical cannabis based on the regulations. The timeline for these amendments remains uncertain, though the process is described as “well advanced”.

The ministry did not provide a timeline for the amendments to reach Parliament, explaining that the process involves the Office of the Parliamentary Counsel and the Attorney General's Chambers.

“MIIC has no control of the legislative timeline. However, the ministry is committed to doing all that we can to finalise the regulations as soon as possible,” it said.

ONEROUS PROCESS

CLA's intensive monitoring of the production process – from purchasing seedlings to harvesting and selling is way too onerous, suggested one small farmer, who is urging focus on speeding up sales.

“CLA a really the boss, not us, although we own it. So we have to wait until when CLA comes forth and dem don't drag dem feet … . CLA comes now, monitors the harvest, collects the tags, watches the storage … and then now mek us do a back check and mek sure all that was put in is coming back out,” said the grower from St Catherine as he surveyed the hurricane-damaged farm, where about 300 plants weighing roughly 40 pounds were set to be discarded.

But he described the documentation process as stressful and time-consuming, noting that it takes, on average, two to three weeks to complete a sale due to the need for numerous signatures.

As part of the sale, the CLA requires a tri-partite agreement, which must be entered into among the cultivator, the purchaser, and the authority for each crop, allowing for the authority to purchase the crop for immediate sale to the purchaser. The ministry said it is required under international obligations and reduces the risk of diversion of the crop.

“To make a sale, I have to have 'bout 12 signatures pon one document. Do up a document invoice that would have all the parties, and on the day of the sale, everybody signs. Confirm the sale, yes, … because is a Schedule 1 thing. If GraceKennedy was to sell goods so, there would be no Grace today,” the farmer said.

Swift movement is critical to maintaining the quality of ganja, he noted, as reaped plants start losing weight, affecting colour, flavour, and, ultimately, earnings.

High-grade marijuana can fetch between US$600 and US$800 per pound. Lower-quality weed can yield US$400 per pound, a rate that will not cover operation costs of about J$2.5 million for each crop cycle of about five months for an acre of production. The figure includes nutrients, seeds or clones, travelling, electricity, security, and two full-time employees.

For some companies, the pressures are too great and pulling out is the logical choice, according to Rear Admiral Hardley Lewin, a former consultant with a major firm that exited the ganja industry in 2023, citing regulatory and financial issues.

“Challenges facing the industry can be summed up as regulatory, banking and funding, energy costs, transportation (air) overseas and product testing,” Lewin said. “The interim regulations have not been updated in order to reflect the experiences in the industry. If your licence expires, what you have in the ground, you can reap, but you cannot plant again until your licence is renewed. If you have markets overseas, you will be in trouble.”

He also complained about the turnaround time for test results, which he said takes about three weeks. He said it forces the export of the products under quarantine, facing the risk of test failures at the destination and the destruction of the product.

The Bureau of Standards Jamaica, which provides testing services, said turnaround times vary from seven days to 28 days, dependent on the nature of the test and any follow-up needed based on initial results. Salmonella testing, for example, will take up to 28 days.

JACANA, a local medical marijuana company, is also blaming slow reforms for some of its struggles and key to the closure of one of its four stores in May. Founder and CEO Alexandra Chong criticised the lack of regulatory change and urged “immediate and decisive action” to revise the framework.

“Although the industry was established with the best of intentions, the operational realities have not been fully considered, resulting in significant challenges that stifle growth and innovation,” Chong argued. “There needs to be a genuine commitment to addressing the concerns that have been repeatedly raised by industry stakeholders for [eight-plus] years.”

“At JACANA, we've had to diversify into non-cannabis areas to sustain our operations, a strategy that many other licensees have also adopted. However, the lack of regulatory change is forcing us to make significant changes to our business model and strategies,” she said.

According to Chong, “The industry is at a crossroads, and without urgent regulatory reforms, the future remains uncertain.”

jovan.johnson@gleanerjm.com