Marijuana, once the backbone of the underground economy in St. Vincent and the Grenadines is moving centre stage with the coming into effect of the Medical Cannabis Amnesty Act and other legislation passed in the nation’s Parliament. In December 2018, the national assembly passed into law the Medical Cannabis Industry Bill and an amendment to the Drugs Prevention of Misuse Act.
The Medical Cannabis Industry Act, 2018 provides for the granting of licenses to grow marijuana for use in the pharmaceutical industry. Several categories of licences are available under this law, namely, a cultivation licence, a research licence, a manufacturer licence, a dispensing licence, an import licence, an export licence, a transport licence, and a traditional cultivator’s licence.
Under this Act, the amnesty will run from 3 March 2020 to 2 March 2021 and may be extended at the discretion of the Minister of Legal Affairs. The amnesty is intended to provide an avenue for current illicit growers of cannabis to transition to legal cultivation for the purposes of the medicinal cannabis.
Under the law, the amnesty applies to anyone who, on or before the commencement of the amnesty period, was or is engaged in the cultivation of cannabis, contrary to the relevant section (8) of the Drugs Prevention of Misuse Act and may, otherwise, be liable to criminal prosecution and other proceedings under the law.
The revised laws also make possession of 56 grams and under of marijuana a ticketable offence for which one cannot be imprisoned, and for which one would not get a criminal record. The laws also decriminalise smoking of marijuana in private, while public recreational use remains a crime.
The changes to the law follow on a region-wide consultation by the Caribbean Community (CARICOM) Marijuana Commission, which was set up in 2013 at the urging of Prime Minister of St. Vincent and the Grenadines, Dr. Ralph Gonsalves. In its April 2018 report, the Commission recommended the decriminalisation of marijuana for all purposes and cautioned against a medical marijuana-only approach to reform.
The Government of St. Vincent and the Grenadines, however, had long expressed its intention to ensure that the country benefits economically from any changes to the marijuana law. Prime Minister Gonsalves had pointed to Jamaica — which had gone ahead and decriminalised small quantities. He noted that the national coffers in Kingston had not benefitted from the reforms there in terms of fees that Kingstown has collected for licences and application.
However, in the absence of a direct financial benefit to the national coffers, countries that have decriminalised possession of small quantities or even legalised the cultivation of a few trees, may realise savings from the State no longer expending resources on arresting, prosecuting, and jailing people for possession of small quantities of marijuana.
The latest data on the performance of the medical marijuana industry in St. Vincent and the Grenadines was released on 3 February 2020 by Minister of Finance, Camillo Gonsalves, in his Budget Address.
The Medicinal Cannabis Authority (MCA) has received 280 licence applications from 25 foreign investors, seven local investors, 26 local cultivators, 210 traditional cultivators and 12 traditional cultivators’ cooperatives. So far, the MCA has approved 70 applications, including 10 local farmers’ cooperatives (with a membership of 140 traditional cultivators) and 18 regional and international companies. The value of the licences approved thus far is EC$13.5 million (EC$1=US$0.37), however, the MCA’s billing, including for application fees and other ancillary items exceed EC$14.3 million.
For the first two years, a traditional cultivator with up to 5 acres of land does not pay any licence fee beyond the EC$100 application fee. Cultivation, manufacturing, transport and research licence fees for Vincentians range between $500 for one acre or part thereof (a non-refundable EC$100 fee is applicable) and $2,100,000 for more than 100 and up to 300 acres ($7,000 per acre or part thereof). For more than 5 and up to 25 acres ($9,000 per acre or part thereof), the fee is EC$225,000.
For non-Vincentian cultivation, manufacturing, transport and research licence fees, the levy is EC$100,000 per acre for one acre or part thereof. In addition to this, there is a licence fee of EC$100, a non-refundable application fee of EC$5,000 and a Food Security Authorization Fee (payable within one year of licensing) of EC$250,000. This Food Security Fee remains unchanged regardless of the land acreage.
At the other extreme, for more than 100 and up to 300 acres, the licence fee is $2,670,000; the non-refundable application fee is $5,000.
There is also an import/export fee per shipment, Camillo Gonsalves, in his Budget Address which includes a licence fee of EC$1,000 and a non-refundable application fee of EC$500.
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The amount collectable is almost three times what the government had predicted for 2019, but the MCA has so far accepted only EC$6 million in fees from approved applicants.
The Finance Minister said:
“The reluctance to immediately accept all fees is due to caution on the part of the MCA and the local banking sector about potentially jeopardising our fragile correspondent banking relations, particularly when dealing with cannabis companies that have American directors or board members.”
The minister said the challenges were anticipated from the outset and banks in St. Vincent and the Grenadines are consulting with their correspondent banks and attorneys about “the most efficacious ways to process and accept these fees, as well as the day-to-day transactions that will increase as the industry matures”.
He said that active licensees are establishing farms and medicinal cannabis processing facilities in St. Vincent and the Grenadines and the government hopes to see the first export of medicinal marijuana product in late 2020.
However, local cultivators are not expected to encounter any such challenges as the Government announced in February that the Bank of St. Vincent and the Grenadines — in which the state is a major shareholder — would allow them to open accounts.
The monies generated from these licences will go to the Consolidated Fund, the “pot” into which all government funds go, unless a particular law mandating otherwise is passed in Parliament.
The government has not detailed any particular use to which the marijuana industry earnings will be put. Another question is the role that traditional farmers will play and the extent to which they will benefit from the reforms.
Minister of Agriculture, Saboto Caesar has said all investors in the medical marijuana industry must purchase from the traditional cultivator 10 per cent of the marijuana they intend to process.
The minister said:
“So, this, in and of itself, is guaranteeing a market. So once you have the land, you have the labour, you have the capital, you have the transfer of the technology, you have the support that is outlined in the bill for the training, and you have a market, then we start to see the shaping of all the limbs of a potential industry in which the traditional farmers will pay an important role.”
Caesar, who is also Minister of Industry, Fisheries, Forestry, Labour and Rural Transformation said the industry had the potential to positively transform rural livelihoods and communities while changing the lives of patients who suffer from medical conditions that are unresponsive to other treatments.
