The legal cannabis waves are beginning to hit the shores of the Caribbean, as the region’s nations anticipate a potential economic boom. Buoyed by an already fruitful tourist-driven economy, Caribbean countries such as Jamaica, Barbados, the Bahamas, and Colombia are already making moves towards lifting prohibition to better serve their tourist’s desires.
At a recent meeting of the Caribbean Community (CARICOM), the 19-member organization of island nations discussed a new report recommending that all member nations “review marijuana’s current status with a view to reclassification.”
The movements being made by both CARICOM and Latin American countries have not been lost on some of the cannabis industry’s biggest players. Recently several North American companies have begun making moves into the region, as cultivators, extractors, and sellers, including Aphria Inc. (TSX: APH) (OTC: APHQF), Canopy Growth Inc. (TSX: WEED) (NYSE: CGC), GSRX Industries Inc. (OTC: GSRX), and CROP Infrastructure Corp. (OTC: CRXPF) (CSE: CROP).
When the leading cannabis player in the world, Canopy Growth, announced its entry into Colombia, it was quickly followed by others wanting into the Caribbean region. Canopy’s Caribbean tour was soon followed by Aphria’s entry into Jamaica. By the end of July, the two were joined by CROP Infrastructure, who also brought their footprint onto Jamaican soil, through a strategic joint venture agreement.
OPPORTUNITIES ABOUND IN THE REGION
Back in June, US expert Brian Staffa, a chief strategist at the cannabis consulting company BSC Group, promoted the idea of Caribbean countries chasing the potential for cannabis industry to officials attending Caribbean Week in New York.
Staffa made a strong case for these countries to strategically set up their regulatory and taxation regimes in a way that doesn’t cause growers and sellers to shy away, nor leave open the door for the black market. “The big thing is (to) be very cognizant of what the market will bear in your region, and perhaps take note of what black market pricing is, because your ultimate goal is to stamp out that black market – get everybody onto the regulated side because it is much safer, and it is much more beneficial to the local economy,” said Staffa.
He pointed towards Colorado’s successes, where during 2017, the state took in USD $247 million in taxes and fees. The state has a population of over 5.6 million, which is nearly double that of a country like Jamaica, which has a population of just under 2.9 million, but also has an annual tourism boost of 3 million visitors. An injection of tax revenues like that of Colorado’s would be incredibly beneficial to the numerous Caribbean nations considering lifting prohibition.
RECENT CARIBBEAN CANNABIS DEVELOPMENTS
Aphria Inc. (TSX: APH) (OTC: APHQF)
Ontario-based Aphria made a serious push into the Caribbean and into South America in July, by announcing business plans in both Colombia and Jamaica. Through an acquisition of a minor competitor’s subsidiary, Aphria began to establish its presence in Colombia and several other countries. The company’s Colombian operation will be anchored by Colcanna SAS, which holds cultivation and manufacturers licenses to product medicinal extracts from cannabis, including oil for domestic use and for export. In Jamaica, Aphria now takes control of Marigold Projects Jamaica Ltd., which also holds several licenses to cultivate, process, and sell cannabis products and services for therapeutic, medical, and scientific purposes.
Canopy Growth Inc. (NYSE: CGC) (TSX: WEED)
Near the beginning of July, cannabis giant Canopy Growth made waves through a potential plan that could cost more than USD $150 million in order to target Latin America’s emerging medical marijuana market. Through a deal that could be worth up to approximately USD $96 million in Canopy stock, the company acquired Spectrum Cannabis Colombia S.A.S., which not only came with an ideal growing site, but also the required national licenses to produce, manufacture, and export cannabis derivatives. Moving forward, the subsidiary will now build the required facilities for “value-added production and sales” in Colombia and the surrounding region.
GSRX Industries Inc. (OTC: GSRX)
Closing out the month of July, GSRX made progress on a new medicinal cannabis dispensary in Puerto Rico. Under its wholly-owned subsidiary Project 1493 LLC, GSRX will build what will be its eight medical cannabis dispensary on the island. Based out of Dorado, Puerto Rico, GSRX has cannabis dispensaries in both California and Puerto Rico, but is allegedly in the process of expanding its business to include its own cultivation, extraction, manufacture and delivery of cannabis and cannabinoid products.
CROP Infrastructure Corp. (OTC: CRXPF) (CSE: CROP)
Spanning 25 acres or 1,089,000 sq feet, CROP’s 30% owned Italian Joint Venture partner XHemplar Italia recently planted high-CBD ‘Cannabis Light’ plants. This was an over 100% increase on its previously announced capacity for the facility. CROP’s entry into the European market through Italy was strategic, and adds another market to the company’s expanding regional portfolio which now includes California, Nevada, and Washington State as well.
JAMAICAN LOTS OF SENSE
The fertile agricultural landscape of Jamaica recently proved alluring enough for CROP Infrastructure Corp. (OTC: CRXPF) (CSE: CROP) to enter the market, and add its third country to the company’s portfolio. Through a joint venture agreement, Crop acquired a 49% interest in a zero-cost lease of a 217,000 sq ft property ideally situated for cannabis production and extraction.
Located upon five acres of some of Jamaica’s most fertile prime agricultural land, Crop secured its newest site in the Westmoreland Parish region.
“CROP continues to build its global footprint by securing this strategic joint venture in Jamaica,” said CROP Director and CEO Michael Yorke in the company’s latest news release. “Many countries are now introducing new licensing and legislative regimes for CBD and cannabis and are prime entry points for our growing organization.”
With just under 2.9 million residents, Jamaica doesn’t seem like a major market on the surface. However, when factoring the island nation’s significant tourism industry, Jamaica tacks on approximately three million visitors each year. According to Jamaica’s minister of tourism, Edmund Bartlett, the estimated global marijuana tourism market is around $494 billion. As the country begins to soften on its previous cannabis crackdowns, Bartlett expects his ministry can expand to five million annual visitors as the country continues to cultivate its cannabis connections. Thanks to its growing conditions, and cultural affiliations with the plant, Jamaica presents a somewhat unique market in the Caribbean region.
CROP’s business strategy from the start has been to bolster investment in new cannabis projects, through facilitating infrastructure, providing growing SOPs, branding, and many other aspects of the sector. By adding Jamaican production to their footprint that also includes multiple US states, and Italy, CROP is building an impressive portfolio of assets for itself and its tenants.
Yorke added, “Jamaica is of particular interest as its licensing regime allows for a full suite of genetics which will give our tenant growers the advantage of being able to provide buyers with a broad variety of CBD and THC end products.”
Building off quotes from Jamaica’s minister of commerce, industry, agriculture, and fisheries, Audley Shaw, CROP sees the country’s immense potential for further development of the cannabis industry for export.
On a Jamaican government website, Shaw was quoted as saying, “[Jamaica] cannot afford to miss this boat,” and that Jamaicans should be “bold and move with a deep sense of urgency” towards tapping into the derivable economic benefits. Export into other markets, including the USA, props up the potential for the Caribbean island’s economy.
With CROP’s expertise and investment acumen, as well as the entry of Aphria to the market, Jamaica’s potential as an important cannabis player was enhanced greatly in July. How the rest of the Caribbean’s nations respond could bring the whole region to a mutually beneficial tipping point in the very near future.
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