Marijuana market: Turning over a new leaf

Kiran Mathur Mohammed

kmmpub@gmail.com

Last month, the Prime Minister announced that cannabis legislation will be tabled in Parliament next year. This follows public backing from the Chief Justice. The Catholic Archbishop supports decriminalisation (not legalisation). They join the international establishment.

Countries from Uruguay to Canada have already legalised, along with a host of American states. The Economist has long been an advocate. More than US$8 billion in cannabis deals have been made in anticipation of Canadian legalisation. Coca-Cola has announced a canna-beverage and Corona has spent US$4 billion on a cannabis producer.

The Prime Minister framed it as a matter of social justice. More than 3,000 disadvantaged young men are arrested for cannabis possession every year. Many lose years living brutal prison lives before they even receive a trial. Even if they weren’t hardened criminals before, prison soon changes that. Outside, gangs and traffickers spill blood as they grab for turf.

Legalisation would free up cash and resources for the police and judiciary. The government will save a bundle and can hoover up some taxes. Criminals will be starved of their single biggest source of revenue and will have one less thing to kill for.

The medical consensus is that cannabis is less harmful than tobacco and alcohol. But that does not mean that it is good – unless you have a medical condition that it alleviates. Increased cannabis use could lead to respiratory disease and reduced productivity. And what about people either high on the job or high whilst driving? Current tests that rely on measuring cannabis’ active compound – THC – are not very accurate.

So how could costs be managed? Cannabis should be taxed enough to discourage its use – but not too much. Excessive taxation could keep the black market alive and negate much of the benefits of a more liberal regime. New funds could be ploughed back into an effective public health campaign.

Labour laws should be adjusted to allow employers more freedom to manage and discipline employees that are high on the job. And as new testing technology becomes available, we should adopt it.

And how can we unlock the opportunities? We could back cannabis as an export, just as we do with cocoa. What then is our competitive advantage?

Canada and Portugal will have developed industries fuelled by billions of dollars of capital. How will we compete against large scale indoor hydroponic farms? We cannot achieve scale and will have less access to funding. The only way to generate significant value is to carefully target our products. Millennials demand all things organic, natural and authentic. That could be our market.

We can look to old Europe for an example. Winemakers in Europe charge a premium for their products based on their terroir – the unique mixture of soil, topography and climate that creates each wine’s distinctive taste. Why shouldn’t Canadians be sipping a fine Burgundy paired with Trinidadian cannabis? We would reap the benefits.

That said, the regulatory framework for recreational cannabis remains less developed. It is dwarfed by the medical cannabis market, which is projected to grow from US$8 billion in 2017 to US$50 billion by 2025, according to Bloomberg and the PI Financial Corp. To market a "natural" approach, we could look at Indian holistic products as a model.

There are still lots of practical hurdles to jump – particularly the thickets of maritime law and the International Air Transport Association. As dull as it may sound, compliance and audit will be at the heart of any successful cannabis export industry.

Jamaica has leaped ahead. This is a chance to work closer with Jamaican businesses. NCBJ is acquiring Guardian Holdings, and Jamaica’s Facey group has a joint venture with Micon Marketing. Why shouldn’t there be more collaboration? Trinidadian money can be married to Jamaican expertise. Caricom can help, and already has a cannabis commission.

Capital is also flooding into Canada’s nascent cannabis industry. The market is positively frothy. How can we tap into this? Trinidadian firms could cross-list on the Toronto Stock Exchange or form joint ventures with emerging US and Canadian players, such as Canopy Inc or Americann.

Existing legislation already allows the government to issue licences for medical cannabis. They should start doing so now.

The stakes are too high. It is not just economic growth. Writer Debbie Jacob has worked tirelessly with young prisoners. She celebrated her birthday in a prison –with damaged young men left with little but rage, and courageous prisons’ officers, worried for their lives and families. Finally, we can offer them hope.

Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh.