Officials from the University of the West Indies (UWI) are predicting that Barbados could earn up to $1 billion from the medical marijuana industry.
Lecturer in the Department of Economics at the Cave Hill Campus, Jeremy Stephen said the island could be earning millions each year from consumption tax, import duties and the issuing of licences within that industry.
He was making a presentation on a paper titled Economic Model of the Incremental Approach of Medical Marijuana Legislation in Barbados during the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) 20th annual conference at the Hilton Resort on Wednesday.
Stephen said based on an “informal sector currency demand model” proposed for Barbados in 2008, the size of the informal economy in the country was estimated to have reached close to 30 per cent of the gross domestic product (GDP).
“In doing so, I looked at assuming ten per cent, 12.5 per cent and up to 50 per cent of this informal economy you could capture somehow if it is that you are going to assume that a large part of the informal economy is linked to marijuana trade, directly or indirectly,” Stephen explained.
When the model was used assuming that ten per cent of the informal economy was linked to marijuana, it found that Barbados could have raked in about $100 million in 2008.
“If you go up to around 30 per cent, which is more actually the number I wanted, you are looking at $400 million or there about in 1990, and up to about $1 billion that could be linked to this trade. So it is a sizeable economy as far as these models were putting out,” he said.
The economist said the mock-up showed that a consumption tax, using the Value Added Tax (VAT) model, between the years 2008 and 2018 could have earned the country an average of between $27 million and $137 million per year from the medical marijuana industry.
In relation to licences, Stephen said using a proxy in terms of excise taxes, Government would have been able to net between $7 million and $34 million per year between 2008 and 2018.
Lecturer in Sociology Dr Alana Griffith warned that the road to implementing a legal medical marijuana industry in Barbados would not be an easy one.
She said systems would have to be put in place in order to curtail any diversion of product between the formal and informal markets.
“The intended legislation must delineate approved medical cannabis from recreational cannabis, and specific reference here is made to legislation to authorize persons access to cannabis and related products for medicinal purposes, and protect them from prosecution,” she said.
“The challenge is that there is going to be some disruption to the illicit market if we implement cannabis for medical purposes. Legalizing medical cannabis will also create an opportunity for diversion [of the product] to be used for recreational purposes,” Griffith warned.
She also indicated that the issue of cost and security would have to be ventilated, while pointing out that quality control and standardization issues would also need to be addressed.
“Policymakers should bare in mind that it is not necessarily going to be a one shot in terms of getting the policy right initially, that they will have to make minor adjustments as in anything else,” she cautioned.
Meanwhile, Senior lecturer in Pharmacology Dr Damian Cohall said the industry should be established with some guiding principles, which could be rolled out in three phases.
He said the first phase would be to identify finished products that were approved by the US Food and Drug Administration (FDA) and regulatory boards and make them available, and phase two would be to import other formulations of medical cannabis.
“We need to have a regulatory framework to allow for these compounds to be imported and to be a part of the supply chain, reaching patients who are deserving,” said Cohall, who added that he believed it was the “right of patients” who have very clear indications to benefit from pharmaceutical products that are cannabis related, to get access to these drugs.
“And of course, the most complex part, which is phase three, will look at cultivation and how cultivation can lead into the development of products, which will be developed locally,” he added.
He further explained that if the country develops the medical marijuana industry several things should be considered including the possibility of developing and registering a new strain, developing value-added medical products through biosynthesis, improving extraction of cannabinoids and developing products with new treatment modalities.
Government has been looking at implementing a medical marijuana industry but said the availability of the drug for recreational use would be decided through a referendum.