To launch a cannabis business in Jamaica’s emerging medical cannabis market, Wayne Isaacs, a Jamaican native who was raised in Canada, had to first find a domestic partner. Now, with the partnership nearly finalized, the founder and CEO of Green Stripe Naturals Ltd. is waiting on a forthcoming cultivation license with an eye to the country’s nascent export market.
Here, Isaacs discusses how he got here and what lies ahead on Green Stripe’s journey to becoming a frontrunner in Jamaica’s cannabis industry.
Cannabis Business Times: Can you provide some background on the company and its path to launching a business in Jamaica’s cannabis industry?
Wayne Isaacs: The company was started roughly about a year ago, [and] we started operations in Jamaica. We started with identifying suitable partners to enter into the cannabis space in Jamaica. Jamaica has a rule with respect to foreign ownership of cannabis companies where a foreign company cannot own more than 49 percent of a cannabis company in Jamaica. So, as a result of that, we started looking at a number of different partnerships. We settled on one, which we started with last June.
The partnership that we settled on, these guys came with five conditional licenses. Those licenses included [Tier III] cultivation, Tier II processing, [an] R&D provisional license for analytics, a transportation license and a dispensary license. That really is the full suite of licenses that are available in Jamaica for commercial cannabis operations. Like I said, roughly about a year ago, we started with this partner [and] started construction on a 20-acre cultivation facility in Jamaica. We recently completed the construction of the cultivation facility. It’s fully fenced, and it’s met all the conditions of the Cannabis Licensing Authority (CLA), which is the primary authority for cannabis licensing and enforcement and monitoring in Jamaica. The Cannabis Licensing Authority has come out and inspected the property. They’ve also granted a verbal approval, and we’re just waiting right now on the final licensing paperwork, which we expect to get shortly.
CBT: What is the current state of the Jamaican cannabis market overall? Can you describe the regulatory landscape and how the market has been received by cannabis businesses?
WI: There are a couple of different challenges. Those challenges are basically across the board [for] everyone operating in the commercial cannabis space in Jamaica, with the exception of those that are set up for just the local market.
The primary challenge, as I mentioned before, is there’s a restriction on foreign ownership that restricts foreign ownership to 49 percent. We have found a very good way to work with it because we’ve empowered and included our on-the-ground employees in the ownership on the Jamaican partnership side. So, although we own 49 percent as Green Stripe, our primary managers and employees in Jamaica are the ones who own equity interest in the local Jamaican economy.
The second challenge I would say is the banking challenge. That is a challenge that applies to all of us, regardless of whether we’re foreign investors or foreign operators or domestic operators, simply because Jamaican banks at this time are not taking accounts from cannabis companies. Even though commercial cannabis operations on the medical side are legal in Jamaica, banking is a bit of an issue because Jamaican banks are very tied to U.S. banks.
The third challenge would be the absence of clear export regulations. This, again, would affect the foreign investor or the foreign companies investing in Jamaica for export, and we sit in that category. There was a recent announcement, I think in February, that the export regulations would [be] completed by April 2019. They haven’t been, as I understand it. It’s still in the draft stage.
There are a few domestic operators, and they primarily operate just within Jamaica. Most of these are vertically integrated operations. In other words, they have a cultivation license, along with a small processing license and a dispensary license. The cultivation license is usually Tier I or Tier II, the processing license is a Tier II license, and they just produce for their own retail operations. A lot the domestic companies in Jamaica are really not producing for the export market. We do not fit into that category. We’re almost exclusively there for the export market, although we are looking at opportunities in the domestic retail market, as well.
CBT: Can you elaborate on the formation of Green Stripe’s international partnership? What characteristics was Green Stripe looking for in a partner, and how were potential partners vetted?
WI: You need to do due diligence. My recommendation to anybody going into Jamaica seeking partnerships would be [to first] find a very good law firm, a firm that understands the cannabis industry and understands the CLA and the rules that are set by the CLA. It’s very, very important that partners are vetted because there is the opportunity for potential transactions really not turning out the way that they were intended. So, doing some due diligence on your potential partners to the extent that you can, vetting your partners through potentially the CLA, would be potentially the first step.
CBT: What are some of your overall business strategies for this market?
WI: Right now, we have approximately 20 acres of cultivation space in Jamaica. We’ve built out five and we intend to build out, incrementally, additional five acres [at a time] as [the] market demands. In terms of a strategy, it’s exactly that. In the absence right now of the export regulations, we’re starting with small-scale commercial production. Potentially with our first harvest, [and] a lot of the harvests, will go toward processed products—oils. Oils, generally speaking, have a much longer shelf life than flower. So, in the absence, like I said, of clear export regulations at this time, what we’d be doing as a cultivation strategy is to grow and process and potentially store that processed product for the export market when the export regulations are clearly defined.
Jamaica’s the only country that I know that has an international, world-renowned brand of superior cannabis. We have, in terms of strain selection right now, some of those superior brands. I really don’t want to give that away at this time, but we are positioned right now to start growing some of the more prolific Jamaican strains of cannabis.
CBT: What was one challenge that the company has faced, and how did it overcome this challenge?
WI: The biggest challenge that we have right now is just really getting to the stage where we can start cultivation. We’ve finished our construction. Our facility has been built, it’s been inspected, it’s passed the inspection. It’s a bit of a process to get to the final licensing stage, not for any other reason than the fact that it’s just so busy in Jamaica right now with so many applicants. I understand that there are over 600 applications in right now with the CLA. They’re doing a fantastic job, given the resources that they have, but it is a fairly heavy volume of applications, so that tends to slow down the process somewhat.
CBT: What are some of your favorite lessons learned throughout this process of launching a cultivation operation in Jamaica?
WI: Patience. That would be the big one. I’m Jamaican born, but I was educated and grew up in Canada. My career has been exclusively in Canada, with the exception of now when I’ve got this company set up in Jamaica. I’m used to how things work in Canada as far as administrative processes. In Jamaica, things just take a little bit longer because it is a third-world country, it is an emerging economy, so things just tend to move a little bit slower. Not for any other reason that the administrative processes are just not at the stage yet where they can support this type of industry that’s just come on so strong, so suddenly, in just a short period of time. So, the biggest thing is really patience. It seems like opening up a bank account or vendor account tends to take a bit of time, simply because a lot of the processes in Jamaica are still paper based instead of electronically based. So, these kinds of things just tend to add to your time.
CBT: What are some of the company’s growth plans and overall goals moving forward, once it gets plants in the ground?
WI: We now have 20 acres of total cultivation facility. We intend to increase that incrementally, and one of the things I’m in the process of doing right now is securing some land that’s somewhat contiguous to where we are right now. I’m in the final stages of negotiations with securing at least another 250 acres around us. So, that will give us the ability to scale up when we need to scale up.
In addition to that, we plan on adding a processing facility. [For] the processing facility we’re looking at adding right now, we’re in discussions with the executive with the University of West Indies in Kingston. We’re looking at potentially establishing the processing facility on campus, simply because we’d like to wrap a little bit of scientific and academic process around our extraction facility. In addition to the extraction facility on campus, we’re going to bolt on an R&D facility, as well. We’d like to get into potentially some strain development, developing a seed bank and developing potentially ailment-specific strains for the medical markets overseas. We’re also contemplating, as well, setting up a dispensary—at least one dispensary, potentially three on the island. We’re looking to capitalize on the tourist traffic, the travelers from North America, Europe and across the world who are looking for that unique Jamaican ganja experience. We’ve selected three potential locations and we’re in discussions with strategic partners with respect to setting up dispensaries on the island.
We’ve been getting some very, very good feedback, not just from the government, but also from industry in Jamaica with respect to how we’ve positioned ourselves and how we’re really structured and set up in Jamaica. One of the things that I think we’ve done in a very positive way is that we’ve engaged local communities and we have a program whereby all the employees of the company have the ability to earn a certain percentage of an acre on the cultivation facility. So, what happens is if you’ve been working with us for quite a while and you’ve been doing good work, you actually have the ability to earn whatever that percentage is—half an acre or a quarter acre—and whatever is grown on that acreage, we will buy from you. That’s really one method of really empowering the people economically so that they’re not just workers—they become partners, in a sense.
A lot of people and governments throughout the Caribbean region who are intending to or would like to legalize commercial cannabis, they’ve been looking to Jamaica as the example. A few people—potential operators from other countries within the region such as Barbados, Antigua, St. Vincent [and] St. Lucia—have reached out and contacted me and asked if I would consider partnerships with them in their countries. So, what we’re doing in Jamaica seems to be getting a lot of traction. I’ve been asked to speak at several conferences over the next couple of weeks in Barbados [and] Trinidad. I was invited to participate in the launching of Harvard Medical School’s Phytomedicines and Medical Cannabis Institute back in late May. I was invited as part of the Jamaica delegation because Harvard intends to do a great deal of collaboration with Jamaica with respect to its medical cannabis institute. So, some really good things are happening. Everything that we’ve done has been very deliberate, it’s been very sober, it’s been very planned. We want to make sure we do this right. There’s a great opportunity in Jamaica, and I believe that we’re positioned to be one of the frontrunners in the industry in Jamaica.
Editor’s Note: This interview has been edited for style, length and clarity.
Published at Fri, 14 Jun 2019 14:38:00 +0000