Despite rapidly growing interest in the medical cannabis industry, the head of the industry’s regulator has identified banking obstacles at the top of several challenges hampering investment.
Shanika Roberts-Odle, the acting chief executive officer (CEO) of the Barbados Medicinal Cannabis Licensing Authority (BMCLA), made the revelation on Friday as the agency granted the University of the West Indies the first research and development licence.
“We have an issue as it relates to banking. That is the absolute reality but we are not the only persons who [have] ever had that problem. California, for many years, was a cash-only business with large warehouses [filled with] cash,” she said.
“What I will say to you, is that it is not an issue I am unwilling to continue to attempt to bridge the gap [on]. I know that the [permanent secretary] and the minister are with me on that in terms of bridging the gap of comfortability for our banks, and for their US correspondent partners, and how do we move forward.”
“We are also looking at alternatives,” the acting CEO added.
“When you don’t have horse, sometimes you have to ride cow.”
US banks – with whom most domestic banks do business – are unable to take funds from cannabis businesses, which risks prosecution for “aiding and abetting” and money laundering, US federal crimes. Cannabis possession and selling are still federal felonies, despite the legalisation of recreational cannabis in 24 states, while another seven states have decriminalised its use.
Roberts-Odle said new investors expressing interest in the industry regularly, adding that the BMCLA has ensured that at least 30 per cent of all licences are locally held.
She disclosed that 77 per cent of the licences are locally owned, with 15 per cent being a mixture of Barbadian and CARICOM nationals and a combination of domestic and overseas players making up the remaining eight per cent of licences.
The acting CEO added: “One of the positions we had put forward is that at least 30 per cent of every licence must be owned by a Barbadian, except in two cases – research and development, and laboratory, because . . . those are extremely capital-intensive areas.”
Identifying insurance as another long-time obstacle to the industry’s development, Roberts-Odle nevertheless indicated that local insurer Gallagher Barbados had recently come on board.
“ [We] want to thank our good partners, Gallagher Barbados, who have advised us that they are willing to insure [the] medicinal cannabis industry. I want to ask our other insurance partners in Barbados to come on board. We’ve had conversations with them, [and] I’m sure we will continue to have conversations with them,” she said.
The BMCLA head also pushed back against claims that small businesses were being shut out of the sector because of the high cost of licences.
Acknowledging that licence fees would be prohibitive to some entrepreneurs, she maintained that the medical cannabis industry requires significant investment to pass all necessary regulations.
Roberts-Odle explained: “From various ends, the medicinal cannabis space is a space that is capital intensive, there is actually no way around it. The licences could be $100 and it is still going to be a difficult matter because you have to grow to a standard and you have to be able to test. Doctors who are going to prescribe medicinal cannabis need for their patients to know what is in that medicinal cannabis.
“And so, while there are persons who have absolute skill at growing, sometimes that is limited to a recreational format because you have to be able to go through particular processes as it relates to cultivation on a medical basis.”
But the regulatory agency’s head said the government would soon announce “something that would be able to allow some persons to get involved, and to be able to get involved in a meaningful way”, though she did not elaborate.
“There are still also ways that people can get involved,” she noted, adding that some entrepreneurs have formed cooperatives and are “seeking investments through that cooperative”.
(SB)
