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Politicians “extremely concerned” by lack of medicinal cannabis regulation

Politicians “extremely concerned” by lack of medicinal cannabis regulation

Thursday 06 January 2022

Politicians “extremely concerned” by lack of medicinal cannabis regulation

Thursday 06 January 2022


Lack of regulation, questions over quality control, planning problems, unclear Ministerial responsibility... a panel of politicians says its "extremely concerned" about Jersey's burgeoning medicinal cannabis industry, and is warning that the island's reputation could be tarnished if the issues are not fixed.

The criticism comes in a 149-page report released today by the Economic and International Affairs Scrutiny Panel, which has been reviewing the regulations for the licensing, production and export of medicinal cannabis for nearly a year.

Back in 2019, Economic Development Minister Senator Lyndon Farnham announced his intention for Jersey to become a "centre of excellence" in medicinal cannabis production at a London conference. Since then, the industry appears to have developed at pace, with licences approved and planning applications to create medicinal cannabis farms registered.

But today's Scrutiny report expresses concerns that Jersey hasn't drafted its own dedicated set of regulations to control this development. It also notes that producers do not need a recognised EU safety mark to operate on the island, meaning that Jersey's exports might be considered lower grade.

Questions are also raised over whether the potential economic benefit to the island of the industry has been overstated by Government.

In the report, panel Chair Deputy David Johnson explained that the group had “major concerns” over the fact two medicinal cannabis licences had been granted despite an apparent lack of regulations for the industry.

He added that the review had confirmed the Panel’s concerns were “justified” and prompted 24 recommendations.

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Pictured: Deputy David Johnson chairs the Economic and International Affairs Scrutiny Panel.

One of the main issues raised by the Panel is that the island does not have its own regulations for the industry and is instead relying on a Memorandum of Understanding (MoU) with the UK Home Office Drugs and Firearms Licencing Unit (DFLU). 

To enter the MoU, the Jersey Cannabis Agency (JCA) was set up. The JCA is made up solely of the Health Minister, Deputy Richard Renouf, with no other Ministerial input, and is administered by the Chief Pharmacist.

The Panel believes this arrangement is “inadequate” and called for a single piece of bespoke legislation to be created locally to control the emerging medicinal cannabis industry.  

While Economic Development Minister Senator Lyndon Farnham has largely been the face of announcements on the island's burgeoning industry, the panel said that the lines of accountability were in fact "blurred".

They explained that at the outset of the review, they believed Senator Farnham had overall responsibility for the industry, but that it later emerged that no single Minister had such responsibility, with the industry appearing to cut across the portfolios of the Health, Home Affairs and Environment Ministers too. They also suggested that the latter should have had more input, particularly in relation to Planning matters, when in fact he hadn't.

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Pictured: The Panel said the lines of accountability for the industry are blurred.

“It is the Minister for Health and Social Services (in his capacity as sole member of the JCA) who has responsibility for the issue of licences with the Minister for EDTSC being responsible for the overall economic development and rural economy," the panel explained.

"...Further, whilst the Minister for the Environment currently has little or no input in relation to the licence application process, or indeed some basic matters relating to the planning process (which are discussed in more detail within this report), we have recommended that officers of the Planning and Environment Department be responsible for the assessment and approval of any Environmental Impact Assessment submitted with the licence application.”

They recommended “a more holistic approach” for the future of this industry.

The Panel also noted that cannabis can be exported without a European Union Good Manufacturing Practice (EU GMP) certification, which they described as “the highest recognition available to pharmaceutical companies” as it requires rigorous testing to ensure compliance with strict EU regulations.

The Panel said all medicinal cannabis exported from Jersey should be under the EU GMP certification, as otherwise they fear the island could be viewed as exporting “lower grade medicinal cannabis”, which may tarnish its reputation.  

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Pictured: The Panel said a full business case should be "essential" when applying for a licence.

The Panel also mentioned the industry’s future revenues are “speculative” and profitable tax intake is likely to remain “minimal” for several years, even though the medicinal cannabis industry might be financially successful through employment, taxation and investment.

They also questioned the economic viability of the medicinal cannabis licence application fee, which is low compared to other jurisdictions, and recommended an immediate review. They also called for the licence application process to include a full business case.

 “The cultivation of medicinal cannabis in Jersey is promising as it demonstrates the potential for a thriving new sector within our island’s economy,” Deputy Johnson, said.

“However, we wish to ensure that it operates within a strong regulatory framework to encourage investment and enhance Jersey’s strong international reputation. We hope that the Council of Ministers will seriously consider our recommendations as to the implementation of robust levels of regulation and other measures designed to ensure that this emerging industry maintains the high reputational standards for which Jersey is recognised.”

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Posted by John Henwood on
Jersey’s success was based on a low tax, light touch regulatory approach to its economy. Not any more. Medicinal cannabis had all the signs of being a successful addition to the overall economic mix and one with great potential. So what does our government do? First it slaps the nascent industry with a 20 percent tax rate (a rate, incidentally, previously reserved for utility companies which are already substantially publicly owned) and now another bunch of politicians wants to impose regulatory burdens. For goodness sake give this new sector a chance. It needs a tax break and very light touch regulation whilst its in its infancy. I’m afraid our current crop of politicians appear to have little idea how to create a diverse, successful economy for the future.
Posted by Martin on
The politicians need to have a "joint" plan to "weed" out these problems rather than "puffing" so much!
Posted by Guy Le Sueur on
Jersey does not, and never will, have a burgeoning medicinal cannabis industry due to the short sightedness of the politicians as highlighted in John Henwood's comment. The 20% tax rate (double that which is currently paid by the established Finance Industry) coupled with a significant lack of international tax treaties means that there is unlikely to be any further inward investment from foreign investors. A nascent industry yet to generate any revenue gets slapped down by a punitive tax rate. The potential economic benefit to the Island was not overstated two years ago. It is ironic that Deputy Johnson and his scrutiny panel colleagues now raise doubts about the economic benefit when they and their colleagues are the main protagonists of the decline in interest in Jersey as a medicinal cannabis centre. Do they know anything about what drives inward investment in the Island. Clearly with the decision to impose a 20% tax rate and their recommendation of an immediate review of the licensing fee, they have not the slightest understanding about the private sector or, specifically, the substantial capital investment necessary to commence and sustain a commercial medicinal cannabis facility. More worrying is scrutiny's apparent lack of how the medicinal cannabis market works. Buyers of pharmaceutical grade medicinal cannabis require EU-GMP certification to comply with their own industry standards. No Jersey based grower will survive without EU-GMP certification - simple. Give the industry a fighting chance to establish itself and provide an attractive tax and licensing regime to encourage inward investment in the Island.
Posted by IanSmith97 on
And so the grubby headlong rush into ‘legal’ drugs descends into farce. Of course it must be regulated, we are talking about medicine here (or is that a ruse to legalise spliffs?). We’re talking about a dangerous substance. Big money getting involved, who’d have thunk it? All this baloney about it being a new, super industry in Jersey is hokum.
Posted by Geoff Sandwood on
Could not script this better Scrutiny. A couple of questions for Deputies Johnson and Steve Luce.
1. Which other European offshore jurisdiction is competing with Jersey to establish a viable medicinal cannabis industry?
2. Which other jurisdiction is looking to attract as much inward investment as possible from medicinal cannabis?
3. Which offshore jurisdiction would love to see Jersey's medicinal cannabis industry fail and its own cannabis industry thrive?
4. From which offshore jurisdiction did scrutiny - in its wisdom - seek professional advice on tax and revenues, regulation and license requirements?
Answers to 1-4? Malta
Would any of your readers in the finance industry, agricultural industry, fishing industry or hospitality industry welcome a States of Jersey Scrutiny Panel taking advice on how to tax and regulate them from a Guernsey, France or Luxembourg based firm of accountants competing for business with Jersey? Here's a Key Finding for the Scrutiny Panel "You displayed rank stupidity seeking advice on how to regulate Jersey's medicinal cannabis industry from an advisor in a competitor jurisdiction keen to see Jersey's cannabis industry flounder". And here is a Recommendation "Take advice from an independent advisor, not a competitor".
Can you imagine if potato growing or fishing was a new start up industry in Jersey today? Scrutiny would have a field day looking to impose as much regulatory red tape as it could possibly imagine. I wonder if today those industries would pass the economic benefit hurdles now being joyfully thrown in the path of the medicinal cannabis industry? Why worry about the OECD black list, lack of housing, lack of labour, failing retail, etc. when the Islands politicians seem so willing to completely stifle a potential revenue generator for the Island at birth. For goodness sake leave private enterprise to entrepreneurs and concentrate on solving the Island's real problem which is the massive deficit it faces from covid and the hospital.
Now, if only someone could think of a diverse new industry for the Island....
Posted by Scott Mills on
We already behind the rest of the world by atleast 20 years, catching up to the final product of countries like australia, israel, canada, america and the United Kingdom (yes Teresa May's husband sideline with GM pharmaceuticals). Then to tax them double than finance, some of the politicians should have a camberwell carrot and think again.
Posted by Rex Cardy on
I heard that when it went to the vote, that a few of the members shouted back " far out man"
Posted by Graham Nears on
Electorate 'extremely concerned' by lack of Politician regulation.
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