Jamaica Gleaner / The viability of Jamaica’s legal ganja and hemp industry has been called into question, with Government lawmaker Marisa Dalrymple Philibert suggesting that Jamaicans might be
clinging to false hope as there are financial barriers that could exclude small farmers from participating in the sector.
Members of Parliament’s Public Administration and Appropriations Committee (PAAC) yesterday indicated that there was need for clarity as to how investors in the cannabis sector would either source funding from the banks or deposit proceeds from the sector into financial institutions when there were concerns relating to correspondent banking.
Dalrymple Philibert said that small farmers seeking to form a company and participate in the cannabis sector should be given the assurance that they could do business with the banks without facing major roadblocks.
“There is such a thing as false hope. You live and you think it will happen, and it does not materialise because we cannot put money under our mattresses to do business now,” she asserted.
“I am concerned that this is an area that is not just grey. It is very dark,” she added.
At the end of October, this year, the Cannabis Licensing Authority (CLA) approved three licences to players in the industry, with one issued to a processor and two to cultivators.
The number of conditional approvals as at October 31, 2017, is 61.
Corporate secretary at the CLA Ellory Taylor told committee members that the authority’s mandate is to regulate the industry and to ensure that stakeholders operate within the framework of the entity’s regulations.
“The challenge is that even though we have been establishing relationships with various stakeholders within the industry, we do not have the potential to influence the policies and decisions of the bank,” she said.
Taylor shared with the committee that banks have expressed concerns in relation to their correspondent banking relationships.
Correspondent banking involves the facilitating of certain services by banks operating in different jurisdictions. The services may include wire transfers, business transactions, and deposits.
A number of international financial institutions have ended or restricted their relationship with banks in the region owing to concerns such as money laundering and fraud.
Taylor indicated that the authority has given some measure of assurance to the banks that it has carried out proper due diligence in terms of persons fit and proper to be awarded licences to operate in the industry.
Permanent Secretary in the Ministry of Industry, Commerce and Agriculture Donovan Stanberry also acknowledged that the banks were tentative for fear of backlash as it relates to correspondent banking.
He suggested that an effective communication strategy be pursued to engage stakeholders in the cannabis industry and to encourage them to be “candid about what the situation is so that expectations can be adjusted and managed”.
Committee chairman Wykeham McNeill said that the ministry and the CLA should take the lead in “dealing with this issue” as players would not be able to move money through the banks.
“You cannot have big businesses built on cash transactions. You cannot expect a man to be walking with some bag of money to (conduct business),” he said.
McNeill asked the ministry and the CLA to provide details of how it intends to address the concerns discussed at the meeting.