“It’s a sacrament. It’s sacred. It’s how we communicate with our ancestors. Genesis 1:29 says the earth brought forth grass and herb-bearing seed, and the Lord saw that it was good. I don’t see how men could see that it is not,” said Ras I’an, a Rastafarian Priest.
He drapes a hand-crochet prayer scarf, clutches a Rastafarian flag bearing the lion of Judah and enters the Mount Carmel Tabernacle, tucked in the Barbadian parish of St. John.
This Tabernacle is different. It has no doors or windows, and the floor is the land.
Instruments of worship dot this natural Tabernacle, punctuating the posts adorned with the enlarged pictures of Emperor Haile Selassie, the Rastafarian “King of Kings”.
After pronouncing a blessing, the elder Priest sits on the wooden bench that traces the octagon perimeter of the Tabernacle and explains the importance of a plant rocking the world.
“Tell me any other plant you know on earth that is as renowned as the ganja plant. It is the discussion in the world, not only the discussion; it is the economics of the world now.”
Priest Ras I’an’s sentiments echo across a multi-billion-dollar industry, which Barbados is now entering … cautiously.
According to New Frontier Data’s Cannabis Capital 2023 Industry Market Report, North America is the biggest winner in the marketplace.
“Canada and the U.S. have opened access to the widest base of existing consumers and together accounted for 96% of legal cannabis sales across the globe in 2022. (U.S. legalised states accounted for 85% of sales with $30 billion last year),” it says.
“However, the legal market is capturing just 30% of estimated annual cannabis spending in North America ($113 billion in 2022).”
The report further asserts that Canada, the first to legalise cannabis, “saw close to $4 billion in annual legal cannabis sales in 2022.”
Mixing illegal and legal cannabis purchases, “cannabis consumers globally spent an estimated $459 billion on high-THC cannabis and cannabis products in 2022, with annual spending projected to climb to $508 billion by 2025*.
(A-C) Source: Equio Global Dashboard (D) Source: “Herbal Cannabis for Medical Use: A Spectrum of Regulatory Approaches” – World Drug Report 2023
One of the most significant areas in the legalised cannabis industry is medical usage. A report by Grand View Research shows the value of medicinal cannabis.
“The global medical marijuana market size was valued at USD 13.8 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR**) of 21.80% from 2023 to 2030.
Barbados in the Marketplace
Barbados wants to tap this lucrative medicinal cannabis reservoir. In 2019, the Barbados Medicinal Cannabis Industry Act was passed, creating the Medicinal Cannabis Licensing Authority (BMCLA) and giving it the power to issue licenses.
The Minister of Agriculture and Food Security, Indar Weir, stated in parliament that medicinal cannabis “is an industry that is tipped, in six short years, to grow to USD 100 billion in trade (and) could position Barbados (to) become a global leader for research and development”.
Ambassador to the United States of America and the Organization of American States (OAS), Noel Lynch, mirrored this optimistic outlook in a meeting with Barbadians in the diaspora.
“This opportunity to invest or to create a medicinal cannabis industry is one of the best steps that we have had, creating great options for us as a society to look to another plank of economic development outside of the two that we know best now, which are tourism and international business,” he said.
Accounting and Special Services firm Deloitte Barbados proposes in an online article, Medicinal Cannabis in Barbados: An Industry Poised for Growth that Barbados is in for a “significant positive disruption should the cannabis industry and all its potential for Barbados be embraced (creating) new opportunities for research, cultivation, manufacturing, exportation and quality control standards.”
Although there is much hype for this new endeavour, questions surrounding the reality of economic enfranchisement exist.
“Tommy”, the Grower
“Tommy” (not his real name), a grower and supplier of “black market” cannabis, does not believe that “economic enfranchisement” is something he will easily achieve.
Tending secretly to a few plants at his residence, he cannot see himself having the finances to enter the legal marketplace.
“Unfortunately, the people that will benefit from this setup sound like the rich because a poor man can’t get the license. He doesn’t have the money to put up for it, so he can’t get into the door to see the fruit from the operation,” “Tommy” said, wondering how the system with no dispensaries would work for him.
Like “Tommy”, Attorney-at-law Lalu Hanuman describes an experience confirming whom he believes will benefit.
“I met this Canadian guy, and he told me that he’s invested something like 70 million Canadian dollars*** in the medicinal industry in the Caribbean. These are big investments; if you’re operating on that scale, you’re shutting out the small person,” he said.
However, Executive Director of the BMCLA, Senator Shanika Roberts-Odle, does not share “Tommy’s” and Hanuman’s reservations, insisting that the variety of licenses and pricing schemes offers several entry levels as either a sole proprietor, partnership, co-operative or company.
(A) The BMCLA’s fee structure. (B,C) An explanation of the fee structure by Dentons Delany Barbados. (Designed by BMCLA and Dentons Delany Barbados)
“We want Barbadians to be involved in this industry, Barbadians from whatever kind of socio-economic background,” said Roberts-Odle while outlining some of the initiatives to One-On-One host Lisa Lorde and admitting that some of the licenses are “high”.
“We do, as a country, want to be able to make money from the industry, but we want people to be involved. And we had to balance those things out,” Roberts-Odle said. She also explained that the BMCLA created a 60/40 split to create balance.
“You could pay 60% of your license when you are issued that license; the 40% you can balance that over the next three years,” she said.
Roberts-Odle revealed at least a 30% local ownership prerequisite regarding international players.
“The area under which an international person can be part of an application, they can be part of a co-operative, a partnership, or a company. However, there would need to be a 70/30 split related to ownership,” she said.
Working alongside the Licensing Authority is the Co-operatives Department. One role of this governmental institution is to assist Barbadians in creating co-operatives for entrance into the medicinal cannabis industry.
Co-operatives fall under the Co-operatives Society’s Act, which provides for co-operative tax exemption under the Income Tax Act and government technical assistance through the Co-operatives Department.
Registrar Brent Gittens further explained how the group approach could lessen the financial burden.
“Working together always makes more sense than trying to operate as an individual. Co-ops have a better chance of purchasing in bulk because they pool resources, ideas and equipment. They also lobby the Government and the private sector for contracts,” he said.
Even so, the uptake has been slow. To date, the department has formed one medicinal cannabis co-operative.
“I am not sure why it is. There are people that are aware (that) coming together as a group would make much more sense. I’m surprised I haven’t seen more people approach us. But I don’t know if people are intimidated (they believe that) it’s for a certain set of people. That could be the perception,” Gittens said.
Backing the collective approach, the Chief Executive Officer of SigniaGlobe Financial Group Inc., Paul Ashby, cannot envision another workable scenario.
“I can’t easily see how your single person is going to make a go of this to make it viable. If you get people together, they can access the resources,” he said.
Despite these various options, like “Tommy”, Priest Ras I’an, though thankful for the changes, feels slighted and does not see himself getting the license.
“We shouldn’t have to contemplate to get no license. Rastari should be the freest body with ganja; remember they persecute us? So, how could I have to get a license from the Government? When I was growing this without a license and getting persecuted, now that there is a license, they should come and give me a license as the most experienced person in growth,” he asserted.
This fact holds little water to the traditionally high-end medical industry, as mentioned by the Director of International Services and specialist in emerging markets and Fintech at the global legal services firm Dentons Delany Barbados, Robert Simmons.
Unlike selling recreational cannabis, some international rules and regulations stipulate the safe dispensing of medicine.
“I always challenge people to answer this question – name a few, or if you could, any at all, medicinal industries that have a value chain process where it’s low cost to get into. Remember, there’s a medicinal factor to it. Medicinal industries are usually high-cost, regardless of whether it’s medicinal cannabis or opioids. If we reduce it to reduce the costs, we’re essentially saying reduce the standards,” Simmons said.
The Business of Medicinal Cannabis
The affordability of licenses becomes a moot point without access to financing.
The traditional way of seeking funding from a banking institution does not work for the medicinal cannabis industry. When a Barbadian bank wants to transfer or receive funds, it routes through a corresponding bank. This bank is most likely in the United States.
U.S. banks are under the jurisdiction of the Federal Government, and federally, cannabis is illegal despite being legal in certain states.
“The correspondent banks are not going to want to, or they will not be able to support any financial institution that wants to lend to or support this industry. (If I do lend) my correspondent bank will cut me off. When they cut me off, I can’t do business internationally.” revealed Ashby.
The Senior Manager (Tax & Legal) at Deloitte Barbados, Chris Sulaiman, also backs this sentiment, outlining why banks steer away from anything that could de-risk or shut down their operations.
“It’s easy for me to sit here and say banks need to get on board. But there are (Anti-Money Laundering) AML and (Know Your Customer) KYC issues that you have to go through. It’s almost next to impossible to get bank accounts. In terms of that relationship with the U.S., that’s going to be a tough one for years to come until they legalised federally,” Sulaiman said.
The banking prediction not only deals with funding and selling cannabis but also paying staff, utility bills and the many other things necessary to conduct business, as Simmons explained.
“It is the elephant in the room from both the macro and micro side. Macro, meaning the capitalisation of the actual licenses, the product and the operations. The micro side – (how) are you paying the individuals? That is the issue. Unfortunately, the position that the U.S. has taken with the USD and certain stances of the banking industry has stagnated a lot of the potential of medicinal cannabis and cannabis regimes the world,” he said.
But Simmons is crossing his fingers that the Secure and Fair Enforcement – SAFE Bank Act will finally pass in the United States Senate and eventually initiate steps to relax banking rules.
(Information sourced from the Reason Foundation, graphic designed by Esther Jones)
“If the SAFE Bank Act is passed, then a lot of U.S. banks will open up a bit more liability for handling transactions, and consequentially, that means our correspondent banks will maybe allow transactions. I don’t think it will be the end all. Regulations and licenses don’t automatically allow banks to provide services,” he said.
Beyond sourcing investment, it boils down to breaking historical banking cycles. A financial analyst who wishes to remain anonymous knows that entrance means restructuring old norms.
“If we could figure out how we can move money between this side of the world and Africa without going to the United States, the back is broken. (A) south/south collaboration is important because it separates you from the metropoles that have kept us colonised financially,” the analyst said.
The small island state of St. Vincent and the Grenadines chipped away at that mould and created history. In January 2022, according to a Reuters report, 110 lbs (49.8 kilos) of medicinal cannabis was shipped to Germany through Canada using only Euros and Canadian dollars. The Government set up the account at their National Bank and created an account for the licensees, then structured a “ring-fence” to separate it from the other transactions.
Following this case, Simmons hopes this measure could work for the region.
“They (St. Vincent and the Grenadines) have to be extra careful. If any of those dollars slip up to be U.S. currency or have a U.S. currency source, that’s going to be a huge issue. I applaud them for taking the risk; so far, it seems to have worked,” he said.
The SigniaGlobe Financial CEO, meanwhile, acknowledges the key to unlocking the industry is private investment or equity.
“If an individual can access the capital, they’ll be fine. But that’s the challenge. A lot of people will think that they want to do it because it sounds good. But if you want to be serious in business, you need good knowledge,” Ashby said.
Finding the Entry Point
“Tommy” surveys his small cannabis garden, inspecting the recently rapid growth; he gives this prognosis for the industry’s future.
“It’s not only the flower, but its byproducts. Things like ‘hempcrete’ that go into construction industries, health and skincare. it’s a very important plant. It could be very important to an economy, not only in bringing in money but sustaining certain sectors of the economy,” he claimed.
Financial and legal experts Sulaiman and Simmons believe that Barbadian entrepreneurs should aim for the high-end boutique-level grade of medicinal cannabis, exploring what each value chain stage best suits their knowledge and finances.
“Sometimes people go in the wrong direction when looking at the end product. Indeed, if someone does go about creating a spa, they’re going to need a transport license person, they’re going to need a security company, they’re going to need a cultivator, they’re going to need a processor, and so on,” said Simmons who also encourages entrepreneurs to see how they can fill a void.
“I think people need to move away from this mindset that cannabis is for people dying or in pain. I think that when we look at it from a non-communicable disease (NCD) perspective. I think there is a target to create a fairly large market,” he said.
Sulaiman, too, is encouraging new ideas for the already saturated industry. He believes that to stand out, Barbadian entrepreneurs and growers must carve a niche.
“How do Barbados and the players involved look to foster innovation? (It’s) looking at what worked and what didn’t. Innovation goes beyond product selection (look at) what you can do regionally within CARICOM,” he suggested.
The sky turns from a bright blue to orange as the sun departs the day. Stretching slightly, Ras I’an gives this pledge.
“So, I expect that the youth would create that kind of meditation, even amongst us as Rastas, that create an atmosphere for change, especially with the knowledge I am seeing. I will try to do as much agitation as I could and enlightenment.”
The recommendation to the Drug Enforcement Agency (DEA) from the HHS came last year from the Biden Administration.
This possible change is a step towards decriminalisation and, according to a Reuter’s report, an opening up of the cannabis industry.
“If marijuana classification were to ease at the federal level, that could allow major stock exchanges to list businesses that are in the cannabis trade and potentially allow foreign companies to begin selling their products in the United States,” quotes the report.
Cannabis/marijuana still remains illegal federally.
*marking a compound annual growth rate (CAGR) of 3.9%
**CAGR = The Compound Annual Growth Rate
*** $70 million CDN = $51 582 475.00 USD (Aug 31/23)
WHO Expert Committee on Drug Dependence – Critical Review: Cannabis and Cannabis Resin – World Health Organization (WHO) – 2018
Drugs of Abuse: A DEA Resource Guide – U.S. Department of Justice Drug Enforcement Administration – 2020 Edition
Herbal Cannabis for Medical Use: A Spectrum of Regulatory Approaches – World Drug Report 2023
Report of the Joint Select Committee on the Medicinal Cannabis Industry Bill, 2019 – Barbados Parliament – 2019
SAFE Banking Act legislation https://www.congress.gov/bill/118th-congress/senate-bill/1323/text
That SAFE Banking Act for Legal Cannabis Companies Stalls in the Senate, Again – Reason Foundation – https://reason.org/commentary/that-safe-banking-act-for-legal-cannabis-companies-stalls-in-the-senate-again/
U.S. Health Officials Recommend Moving Marijuana to Lower-Risk Drug Classification – PBS NewsHour – https://youtu.be/mDpO8uL8A-g?feature=shared
Controlled Substance Schedules – U.S. Department of Justice, Drug Enforcement Administration Diversion Control Division – https://www.deadiversion.usdoj.gov/schedules/
Caribbean Nation of Saint Vincent Exports First Cargo of Medical Cannabis- Reuters –
Medicinal, A Major Investment Poised for Growth – In & Outs of St. Vincent & The Grenadines – https://www.insandoutsofsvg.com/articles/medicinal#:~:text=After%20months%20of%20trial%20and,Vincent%20and%20the%20Grenadines.
Guidance on Correspondent Banking – KYC Lookup – https://youtu.be/obHLdNDOu3s?feature=shared
Barbados Medicinal Cannabis Licensing Authority’s (BMCLA) YouTube Information Page https://www.youtube.com/@thebmcla/videos
BMCLA’S Investment page – https://www.bmcla.bb/invest