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Intoxicating Financial Prospects For Ganja Trade - Changing Foreign Laws Seen As Business Opportunity
Published: Sunday | January 12, 2014 1 Comment
Delano Seiveright, director of the Ganja Law Reform Coalition. - File
Delano Seiveright, director of the Ganja Law Reform Coalition. - File
Richard Browne, Business Reporter
The legalisation of marijuana for recreational purposes in the state of Colorado, United States, has pushed prices up to US$400 (J$42,448) per ounce as demand quickly outpaced supply in that market.
The price spike has created a differential between legal Colorado marijuana and the illegal Jamaican product of some $41,988 per ounce, and has given even greater impetus to the drive to legalise the crop here.
Those efforts were previously held back as Jamaica was "always concerned about US policy", said Delano Seiveright, director for the Ganja Law Reform Coalition.
But the movement has been gathering strength over the last two years, since the US states of Colorado and Washington started to legalise marijuana in 2012, Seiveright said.
Tourism would be one of the industries to benefit most if and when ganja is legalised here. Then, visitors could legally use ganja for recreational purposes "creating many business opportunities for Jamaicans", he said.
But not just for farmers, as marketing is a key element of the marijuana industry, which produces many different strains with variations in chemical make-up affecting quality and strength.
Marketers could have their work cut out for them, however.
"Jamaican ganja is no longer considered as highly as before," said Seiveright, who travelled to Colorado recently and met with several people in the marijuana industry there.
Experts there told him that there was concern about the quality of ganja here, as it was "not as good as it should be" and would require some "rehabilitation" of the various strains, he told Sunday Business.
Still, the demand in Colorado alone is so high that shops have been running out of the product, suggesting there is room for legal suppliers to trade higher volumes of the weed.
Locally produced ganja currently sells in Jamaica for about J$500 per ounce. That equates to US$4.72 per ounce, or just over a per cent of what Americans now pay for the legal product in Colorado.
The issue is still a prickly one, however, and not all sources were quite as forthcoming as Seiveright.
An official connected to the Ministry of Agriculture's commodity boards said he had "no interest" in considering any aspect of the marijuana trade in Jamaica, nor how the development in Colorado could affect the industry here.
The commodity boards are only concerned with the legal stimulants of coffee and cocoa, as well as with coconuts and spices such as pimento - no herbs.
Ganja in Jamaica is usually sold in small quantities for $100 per purchase, which is enough to make three 'spliffs' or cigarettes, authoritative sources told Sunday Business.
The cost per pound is $7,000 to $8,000 (US$66 to US$75), though the price "depends on potency".
Under Colorado's new law, marijuana can be sold like alcohol, with residents able to buy up to one ounce, and non-residents a quarter of an ounce.
The sale of the drug is taxed in the same way as alcohol, and state officials have said they expect to raise hundreds of millions in revenue from the business activity.
The levy comprises a 15 per cent excise tax and a 10 per cent sales tax. The first US$40m to be earned from taxation is to be used for school construction, according to The Denver Post, from Colorado.
More than 130 businesses in Colorado applied for the licence to sell cannabis, mainly in the capital of Denver, according to the BBC. The state has a population of about twice the size of Jamaica, with 5.2 million people, and Denver has a population of about 630,000.
In Colorado, although marijuana is now legal for both medicinal and recreational use, there can be a large price differential between the two. A one-eighth ounce of a marijuana product, called 'Girl Scout Cookies', recently sold for US$50 plus US$14.25 in taxes, for a total of US$64.25, according to specialist magazine High Times. But if bought with a prescription the cost would be halved.
PRICE CONTROL
Uruguay, where the state has legalised the drug and taken control of the market, has set the price of marijuana at around US$1 per gram. That translates to about US$28 per ounce.
The South American country is weighing exports of the drug to Latin American markets, forcing new conversation on drug policies inside some of those countries.
Medical marijuana is currently legal in 20 US states, and at least three more are moving towards legalisation, said Seiveright, including New York, Alaska and Florida.
In Europe, the Czech Republic, The Netherlands, Spain and Portugal have legalised the herb to some extent.
Closer to home, Costa Rica and Puerto Rico are the "next places to watch", said the ganja coalition director.
Inside Jamaica, ganja farmers plan to launch their own association at the University of the West Indies later this month.
richard.browne@gleanerjm.com
Published: Sunday | January 12, 2014 1 Comment
Delano Seiveright, director of the Ganja Law Reform Coalition. - File
Delano Seiveright, director of the Ganja Law Reform Coalition. - File
Richard Browne, Business Reporter
The legalisation of marijuana for recreational purposes in the state of Colorado, United States, has pushed prices up to US$400 (J$42,448) per ounce as demand quickly outpaced supply in that market.
The price spike has created a differential between legal Colorado marijuana and the illegal Jamaican product of some $41,988 per ounce, and has given even greater impetus to the drive to legalise the crop here.
Those efforts were previously held back as Jamaica was "always concerned about US policy", said Delano Seiveright, director for the Ganja Law Reform Coalition.
But the movement has been gathering strength over the last two years, since the US states of Colorado and Washington started to legalise marijuana in 2012, Seiveright said.
Tourism would be one of the industries to benefit most if and when ganja is legalised here. Then, visitors could legally use ganja for recreational purposes "creating many business opportunities for Jamaicans", he said.
But not just for farmers, as marketing is a key element of the marijuana industry, which produces many different strains with variations in chemical make-up affecting quality and strength.
Marketers could have their work cut out for them, however.
"Jamaican ganja is no longer considered as highly as before," said Seiveright, who travelled to Colorado recently and met with several people in the marijuana industry there.
Experts there told him that there was concern about the quality of ganja here, as it was "not as good as it should be" and would require some "rehabilitation" of the various strains, he told Sunday Business.
Still, the demand in Colorado alone is so high that shops have been running out of the product, suggesting there is room for legal suppliers to trade higher volumes of the weed.
Locally produced ganja currently sells in Jamaica for about J$500 per ounce. That equates to US$4.72 per ounce, or just over a per cent of what Americans now pay for the legal product in Colorado.
The issue is still a prickly one, however, and not all sources were quite as forthcoming as Seiveright.
An official connected to the Ministry of Agriculture's commodity boards said he had "no interest" in considering any aspect of the marijuana trade in Jamaica, nor how the development in Colorado could affect the industry here.
The commodity boards are only concerned with the legal stimulants of coffee and cocoa, as well as with coconuts and spices such as pimento - no herbs.
Ganja in Jamaica is usually sold in small quantities for $100 per purchase, which is enough to make three 'spliffs' or cigarettes, authoritative sources told Sunday Business.
The cost per pound is $7,000 to $8,000 (US$66 to US$75), though the price "depends on potency".
Under Colorado's new law, marijuana can be sold like alcohol, with residents able to buy up to one ounce, and non-residents a quarter of an ounce.
The sale of the drug is taxed in the same way as alcohol, and state officials have said they expect to raise hundreds of millions in revenue from the business activity.
The levy comprises a 15 per cent excise tax and a 10 per cent sales tax. The first US$40m to be earned from taxation is to be used for school construction, according to The Denver Post, from Colorado.
More than 130 businesses in Colorado applied for the licence to sell cannabis, mainly in the capital of Denver, according to the BBC. The state has a population of about twice the size of Jamaica, with 5.2 million people, and Denver has a population of about 630,000.
In Colorado, although marijuana is now legal for both medicinal and recreational use, there can be a large price differential between the two. A one-eighth ounce of a marijuana product, called 'Girl Scout Cookies', recently sold for US$50 plus US$14.25 in taxes, for a total of US$64.25, according to specialist magazine High Times. But if bought with a prescription the cost would be halved.
PRICE CONTROL
Uruguay, where the state has legalised the drug and taken control of the market, has set the price of marijuana at around US$1 per gram. That translates to about US$28 per ounce.
The South American country is weighing exports of the drug to Latin American markets, forcing new conversation on drug policies inside some of those countries.
Medical marijuana is currently legal in 20 US states, and at least three more are moving towards legalisation, said Seiveright, including New York, Alaska and Florida.
In Europe, the Czech Republic, The Netherlands, Spain and Portugal have legalised the herb to some extent.
Closer to home, Costa Rica and Puerto Rico are the "next places to watch", said the ganja coalition director.
Inside Jamaica, ganja farmers plan to launch their own association at the University of the West Indies later this month.
richard.browne@gleanerjm.com
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