Cannabis Law Report


Cannabis Law ReportChief Justice, Roberts, Reports “Federal Cannabis Prosecutions Are Dropping”Marijuana Times Article: ” In Defence Of “Big” Cannabis”California: State-backed Financial Institution (Public Bank) for the State of California Servicing the Cannabis Industry Feasibility Study 2018 PublishedTalking Publish Interactive Google Map of Drug Policy Changes Around The World in 2018Mixed Messages From Nebraska’s AGs on CBDCalifornia Cannabis Collectives…The Sky Is Falling…Or Is It?Hemp Academy To Open in KansasCredit Union Journal Publishes Article On 2019 Cannabis Banking & USA Credit UnionsCLR’s Top Ten Stories of 2018Are Small Cultivators Getting Screwed In California By Bigger Vertically Integrated Operators ?California Cannabis 2018Barbados: Regulating Medical Cannabis & Holding A Referendum On Adult UseCannabis Control Commission takes over medical marijuana oversight in MassachusettsBloomberg Article: Law Firms Growing Cannabis Practices With Privacy Cases in MindSt Vincent & The Grenadines Decriminalize Cannabis For Medical Purposes & Research Cannabis Law News Wed, 02 Jan 2019 04:10:09 +0000 en-US hourly 1 Wed, 02 Jan 2019 04:10:09 +0000

Supreme court end of year report concludes federal cannabis prosecutions are dropping whilst other drug prosecution are slightly up.


Marijuana Moment reports…

As more state marijuana legalization laws come online, federal cannabis prosecutions are dropping.

That’s one takeaway from an end-of-year report released Monday night by Supreme Court Chief Justice John Roberts.

At the same time, other drug prosecutions are slightly up over the past fiscal year.

“Drug crime defendants, who accounted for 28 percent of total filings, grew two percent, although defendants accused of crimes associated with marijuana decreased 19 percent,” Roberts wrote.

States that approved legalization in 2016 began to implement parts of their laws during the Fiscal Year 2018 period Roberts’s report covers.


Read also at Scotus Blog

Recommended Citation: Amy Howe, The chief justice’s 2018 year-end report: The federal judiciary and #MeTooSCOTUSblog (Dec. 31, 2018, 6:00 PM),


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The let’s get rid of regulators argument starts here ? In article entitled, “The Hysterics Over the Evil Coming of Corporate Cannabis” Dangerous path, we suggest.


Here’s the intro to their piece

Yes, I know the drill. Corporations are evil. Business people are greedy. No good can come from these evil, greedy people getting their hands on our beloved cannabis plant and selling it for *gasp* profits.

I’m not here to argue the greed of anyone. Greed is a trait human beings display to varying degrees; they have throughout all of known history and will continue to do so. But what I will say is that we have little to fear from corporations dominating the cannabis industry, and much to gain.

I know what many of you are saying: this guy is just some shill for big corporations, he hates the little guy, he’s probably getting paid to praise big business, etc. To be honest, I don’t care who “dominates” the cannabis industry. What I care about is getting the best possible price for the best quality product I can, just like in every other purchase I make. In the end, I don’t really care whether the company that made that product has 2 employees or 20,000.

Furthermore, the ultimate goal in a market should be competition. That’s what drives efficiency and innovation. So if small businesses are barred from entering a market, that’s bad for the goal of better products at lower prices. But “big corporations” aren’t the ones who bar smaller competitors from entering a market, the government is. Wal-Mart can’t stop you from opening a blender store, but government regulations and red tape can. A zoning board can.

Full article

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Published 24 December 2018. “Every single channel through the set of possibilities that we followed ended up reaching a dead end.”


Here’s the report in full

The Santa Rosa Press Democrat write

“We went in to try to find a way to make it work,” said William Roetzheim, the founder of Level 4 Ventures, a business analytics firm based in San Diego that studied the feasibility of cannabis banking, then wrote the report and presented it to the state working group on Thursday. “Every single channel through the set of possibilities that we followed ended up reaching a dead end.”

Instead, Roetzheim and his team wrote that the thorny banking issue has to be ultimately settled at the federal level, given that marijuana is still classified as an illegal drug under federal law — in the same class as heroin and LSD. Therefore, most banks will not open accounts for cannabis-related enterprises. They fear losing their banking charters, something that would put them out of business.

“While today’s announcement may not lay out the path some of us had hoped, it did reinforce the inconvenient reality that a definitive solution will remain elusive until the federal government takes action,” Chiang said at the last hearing of his working group. “They must either remove cannabis from its official list of banned narcotics or approve safe harbor legislation that protects banks serving cannabis businesses from prosecution.”


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They write…”2018 has seen support for cannabis reform surge around the world, but many countries – including Bangladesh, the Philippines, and Brazil – have been intensifying their prohibitionist drug policies, or seem intent to do so. Take a look at the map below to see some of the developments that have taken place over the past year. Please note that this is not an exhaustive list.”


Here’s a screenshot

Link here to see the map

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By this time next year this will most likely be a moot conversation. But for now state AG says he doesn’t have time to prosecute CBD but county attorneys are still pushing on the subject.


KETV reports

Douglas County drug prosecutors are in court on big-time marijuana busts, dealers peddling cocaine and killer amounts of fentanyl.

Despite warnings from the Nebraska Attorney General and crackdowns in the Panhandle and Sarpy County, don’t expect the caseload in Don Kleine’s office to start including CBD.

“We have other priorities,” the veteran prosecutor said in a KETV NewsWatch 7 interview.

Kleine says yes, under Nebraska law, any substance that comes from a hemp plant is illegal.

“It’s illegal under the law in the state of Nebraska, because Nebraska’s definition of marijuana includes hemp,” he explained.

But the CBD from hemp isn’t getting anyone high like weed. There are just trace amounts — if any — of THC, the active component of marijuana that causes a high. For Douglas County’s top prosecutor, that’s a key component of taking a case to trial.

“The people who test drugs for us say it doesn’t have that impact, so I think it would be very difficult to get a conviction with that in mind,” Kleine said.

Still, other prosecutors, like Sarpy County Attorney Lee Polikov, are cracking down. He told a CBD store in Bellevue it has until next Friday to close up shop.

Owner Jeff Queen said he doesn’t want a fight.

“But, I’m not unwilling to stand up for myself or unwilling to stand up for all the people that come into this store who are finding relief from these products,” Queen said.

He and lawyers for CBD American Shaman have communicated with Polikov’s office.

Kleine says legislators in Lincoln need to address this issue in 2019, especially considering Congress legalized the commercialization of hemp nationwide in the 2018 Farm Bill. Clearing up the confusion will help law enforcement focus on what matters, he said.

“They need to fix this,” Kleine argued.

Queen wonders if those lawmakers won’t finish 50th in the nationwide CBD race.

“Because right now, we’re competing with two other states on who’s going to be last,” he said.


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Whilst we have great respect for California NORML as they are usually one of the “adults” in the room, they recently published an article that either fell into the “clickbait” category, or the writer should have been better informed before putting finger to keyboard.


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A northeast Kansas businessman is opening a new academy to train farmers to grow industrial hemp now that its production is legal.


The Miami Herald reports

The Topeka Capital-Journal reports that Joe Bisogno’s belief in the crop’s potential inspired him to open America’s Hemp Academy in DeSoto, about 20 miles (30 kilometers) southwest of Kansas City. It plans to offer four-day courses led by agronomists and botanists starting in January.

“Industrial hemp is not pot, but it is a pot of gold for Kansas farmers,” Bisogno said during the academy’s recent ribbon-cutting ceremony.

More at

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One of the better pieces we’ve seen on banking cannabis and moving forward in 2019. Well worth a read


Here’s the introduction

Even though there is a growing number of credit unions willing to bank marijuana companies, the drug remains illegal at the federal level. That means any financial institution attempting to serve legal pot businesses does so with the uncertainty of how the Department of Justice may choose to enforce current law.

“What you’re seeing is anticipation of the end of prohibition, so states are becoming more aggressive about issuing their own charters pursuant to providing cannabis banking services,” said Tom Zuber, an attorney with Zuber, Lawler and Del Duca, a California-based law firm working on marijuana legal issues. “Furthermore, politicians are increasingly supporting in a public way the notion of offering cannabis banking – and aggressively so. So that’s different in terms of the intensity of such pubic support by politicians.”

Part of what has driven that support, analysts say, is the fact that in many cases voters in individual states are approving ballot initiatives to legalize the drug. For instance, in November, voters approved measures in Utah and Missouri for medical marijuana while Michigan residents passed a law allowing for recreational use.

And that, many say, could force lawmakers to finally provide clarity for financial institutions intent on providing pot banking services.

“It creates additional pressure for them to stop and take a better look at what the landscape is, because the people in not just one or two states but in almost all the states are approving this,” observed Katrina Skinner, interim president and general counsel at Safe Harbor Services, a pot banking firm launched by Sundie Seefried, CEO of Partner Colorado Credit Union. “It doesn’t make a lot of sense that there continues to be a conflict at the national level, but that’s where the change needs to be made. It certainly puts more pressure on financial institutions that are trying to bank the industry, as well as law enforcement, which now has a bigger market and sales to try to monitor.”

Full article at

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We’ve dug the data and here’s our top ten for 2018 and to be honest we’re a bit surprised by the results especially no.1 which garnered almost 3 times as many reads as no.2. Here we go….


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Here’s the trap for the small cultivator onselling…”If the receipt that you receive from the Distributor or Manufacturer does not EXPRESSLY state an amount of CCT that you as the Cultivator are deemed to have paid, or the Distributor or Manufacturer doesn’t EXPRESSLY state that they assume the liability for the CCT, then CDTFA may seek to collect the CCT directly from the Cultivator.” Read Jordan’s full article to understand what can happen to a small cultivator in California if t’s aren’t crossed and i’s not dotted.


We have been receiving feedback from small cultivators that should be cause for concern when they sell product to some of the larger vertically integrated operators in California.

Specifically, the devil lurks in the details of the information contained on the receipts and other documents that a distributor or manufacturer provides to a cultivator. If the cultivator isn’t alert to what to look for, they can get screwed in a number of ways.

We have seen receipts where the only detail provided to the Cultivator is “we purchased X pounds of trim at $80/pound”. The concern starts with the Cannabis Cultivation Tax [“CCT”].

The California Dept. of Tax and Fee Administration’s publication Tax Guide for Cannabis Businesses tells us:

The cultivation tax applies to all harvested cannabis, medicinal or adult-use, that enters the commercial market. Cannabis ‘enters the commercial market’ when the cannabis or cannabis products, except for immature cannabis plants, clones and seeds, have completed and comply with both the quality assurance review and testing as required in the Medicinal and Adult-Use Cannabis Regulation and Safety Act. The cultivation tax also applies to cannabis transferred or sold to a distributor if the licensing agency allows cannabis or cannabis products to enter the commercial market without being tested. If the cannabis or cannabis product does not pass testing, cannot be remediated, and does not enter the commercial market, you are entitled to the return of the cultivation tax collected from you. The Distributor is responsible for returning to you the cultivation tax collected from you.”

  • Distributors are required to collect the cultivation tax from you, as the Cultivator, on all harvested cannabis based on weight and category of the cannabis that enters the commercial market.

  • If the first transfer or sale of unprocessed cannabis is to a manufacturer, and not a distributor, the manufacturer is required to collect the cultivation tax from you at the time of the first sale or transfer of the unprocessed cannabis based on the weight and category of the cannabis sold or transferred. The cultivation tax you pay to a manufacturer will be passed on to a distributor for payment to the CDTFA.

The cultivation tax is imposed on the cultivator. As a cannabis cultivator, you are responsible for the payment of the cultivation tax to your distributor or manufacturer. The tax is due on all harvested cannabis based on the weight and category of the cannabis that enters the commercial market.

No cannabis may be sold unless the cultivation tax has been paid.

You should obtain an invoice, receipt, or other similar document from the distributor or manufacturer that you pay the cultivation tax to. The invoice should identify:

  • The distributor or manufacturer’s name, as the licensee receiving the product.

  • Your name, as the cultivator.

  • The associated unique identifier for the cannabis.

  • The amount of cultivation tax.

  • The date of sale or transfer.

You are liable for the cultivation tax until it has been paid to the state or you are provided documentation that indicates that cultivation tax was paid, such as an invoice or receipt from a distributor or manufacturer.”

There is the trap…if the receipt that you receive from the Distributor or Manufacturer does not EXPRESSLY state an amount of CCT that you as the Cultivator are deemed to have paid, or the Distributor or Manufacturer doesn’t EXPRESSLY state that they assume the liability for the CCT, then CDTFA may seek to collect the CCT directly from the Cultivator.

Let’s take a moment to understand the financial consequences of the liability staying with the Cultivator. Let’s use our example of $80/lb. and assume that the Cultivator sells 15,000 lbs. of cannabis leaves for a total price of $1,200,000. The CCT for leaves is $44/lb. which means that the Cultivator owes CDTFA $660,000 for CCT plus the interest and penalties they add for failure to pay the tax.

In general, the law imposes a 10 percent penalty on taxpayers and feepayers for failure to timely pay the tax or fee due, or for filing a late return. In addition to these 10 percent penalties, the cannabis tax law imposes a mandatory 50 percent penalty for failure to pay the cultivation tax or cannabis excise tax due. Therefore, it is very important that you report and pay the cannabis taxes on or before the due date for each reporting period.

You may be relieved of the penalties assessed, including the 50 percent penalty, if the CDTFA finds that your failure to timely pay the tax was due to reasonable cause and circumstances beyond your control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect.

Just to follow up on our example, if CDTFA were to assess the failure to pay penalty on the Cultivator in our example, the penalty would be fifty percent of the CCT or $330,000. The result being that out of the $1,200,000 proceeds of sale, the Cultivator’s taxes and penalties are $990,000 leaving them with $210,000 or 17.5% of the proceeds before consideration of any of the Cultivator’s costs of production


It is important to be mindful of CDTFA’s recordkeeping requirements which you can review here.

We can’t be any more emphatic about the need for cultivators, particularly small cultivators to carefully review the receipts and other documentation they receive when they sell to a distributor or manufacturer.

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The end of the year roundups haven’t been overly positive. Here’s what some outlets are saying after what can be best described as an up and down year.]]>

Los Angeles cannabis market’s slow liftoff and future: Q&A with city’s top regulator, Cat Packer

California issues recalls for 29 marijuana firms caught in Sequoia Labs fallout

Cannabis Business Executive

Will California’s Section 5032 Disrupt the Cannabis Market?

On December 7, 2018, California’s three cannabis licensing authorities submitted final versions of the state cannabis regulations scheduled to be approved by January 16, 2019. California’s Bureau of Cannabis Control (Bureau) submitted a final version of Section 5032 of the regulations that substantially limits commercial cannabis activity between licensed and unlicensed entities. Section 5032(b) states that “Licensees shall not conduct cannabis activities on behalf of, at the request of, or pursuant to a contract with any person that is not licensed under the Act.” Read More

The legal marijuana market, so long a twinkle in the eye of the cannabis cognoscenti, has hit hard times in California, where high prices, red tape and competition from the black market have cast a pall over what was supposed to be a triumphant first year of recreational sales.

The cost of legalization was so high in 2018 that hundreds of growers and retailers went out of business, the number of available products spiraled down, tax revenues from sales fell below projections and the black market revved up, according to industry officials and business representatives.

It was, said one insider, “death by a thousand cuts.” And the drip, drip continued this month with the recall of thousands of pounds of marijuana, extracts and products after a Sacramento laboratory was caught faking test results for 22 pesticides over a four-month period.


One Year Of Legal Pot Sales and California Doesn’t Have the Bustling Industry it Expected.


One Year Of Legal Pot Sales and California Doesn’t Have the Bustling Industry it Expected.


Here’s how Year One of legal cannabis in California played out. Many hope playing by the rules will be more profitable in 2019

Here’s how Year One of legal cannabis in California played out


Oregon’s got about a tenth of California’s population but more recreational weed shops than its southern neighbor.

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Although we have already reported on Barbados we thought it worth referencing this piece in Talking if you need a bit more background on the jurisdiction.


Talking Drugs.or report:

Barbados is preparing to create a domestic medical cannabis industry and will hold a referendum on broader legalisation, the prime minister has said.

Speaking earlier this month, Prime Minister Mia Mottley stated that “there is no doubt that we will put a framework in place for medical cannabis within the next week or so. In fact, we have more or less taken a decision, we just need some refining and training with practitioners.”

Mottley may have been particularly keen to legalise the domestic trade of medical cannabis due to economic reasons, which she directly referenced in her announcement: “You cannot have your primary market which is Canada, the international business and financial services sector moving rapidly into new areas of investment and you can’t match as a domicile, the ability to accommodate those new areas of investment because if you don’t what are they going to do? Go elsewhere.”

The country’s Chief Medical Officer, Dr Kenneth George, later confirmed that the Ministry of Health was preparing for medical cannabis regulation.

“The Ministry [of Health] will be focused on the use of cannabinoids in very specific conditions,” Dr George said, “We expect medical marijuana will be given [appropriate] safeguards to protect the population and the persons who will dispense the drug.”

Legalising the production, sale, and use of the drug for non-medical (recreational) purposes will be decided in a referendum, although any details of this vote – including the specific question and date – have yet to be announced, Barbados Today reports.

Under current Barbados law, possessing cannabis for personal use can garner a fine of up to 250,000 Barbadian Dollars ($124,890/£98,966) or imprisonment for up to five years. Possession of over 15 grams of cannabis can be considered a “trafficable quantity”. Someone convicted on indictment of trafficking cannabis – or any other drug – can face life imprisonment.

Barbados joins several other Caribbean countries in making progressive cannabis reform in recent years. Jamaica decriminalised possession of up to two ounces or five plants of cannabis in 2015. More recently, in late 2018, the government of Antigua and Barbuda announced plans to legalise the production and supply of cannabis for religious and medical purposes – having already decriminalised personal possession and cultivation earlier this year.


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“The Cannabis Control Commission has taken over Massachusetts’ medical marijuana program. Sunday’s transition of the program away from the Department of Public Health went smoothly, according to commission staff.”


Mass Live reports…

The Cannabis Control Commission has taken over Massachusetts’ medical marijuana program.

Sunday’s transition of the program away from the Department of Public Health went smoothly, according to commission staff.

According to the commission, patients, caregivers and dispensaries did not experience any substantial changes in service as the CCC took over the program’s administration.

Nichole Snow, executive director of the Massachusetts Patient Advocacy Alliance, which advocates on behalf of medical marijuana patients, said, “So far, so good.” Snow said she has not heard any complaints about the transition.

The move means oversight of Massachusetts’ medical marijuana and recreational marijuana industries are now both housed under the same government agency.

State officials said previously that the 22 DPH staff members who were working on the medical marijuana program will move to the Cannabis Control Commission.

The CCC is not planning any immediate changes, but the two agencies had to sort out details related to transferring technology, public records, legal and financial affairs and other aspects of the program.

The commissioners at the CCC have said they will address any longer term policy issues related to medical marijuana later on, so that they can give those issues time and attention without interrupting patient service and so they can make use of the knowledge of the former DPH employees working on the program.

The medical marijuana program has a new toll-free phone number, which is (833) 869-6820.


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“Privacy law compliance is one piece of the compliance pie that cannabis companies need to stay on top of,” Hilary St. Jean, corporate tech attorney at Rogoway Law Group in San Francisco who work on cannabis industry issues, said in an interview.


Bloomberg report….

Posted Dec. 27, 2018,

  • Growing number of U.S. law firms boast cannabis industry practices
  • Firms focus on privacy issues, including health law compliance

Imagine this scenario: Hackers have infiltrated the computer of a new pot shop and now possess sensitive customer data such as names, addresses, birth dates and payment card numbers. Victims include residents of states where some or all types of marijuana are illegal.

Could a data breach notice bring unwanted scrutiny from state attorneys general looking to crack down on dispensaries? Would federal health regulators want to slap a penalty on a medicinal shop for not protecting medical data?

These are the types of legal questions marijuana sellers could be facing if they are lax about protecting the privacy of their customers, attorneys told Bloomberg Law. More law firms are developing cannabis-focused practices and are offering counsel to sellers as more states greenlight both recreational and medical marijuana.

“Privacy law compliance is one piece of the compliance pie that cannabis companies need to stay on top of,” Hilary St. Jean, corporate tech attorney at Rogoway Law Group in San Francisco who work on cannabis industry issues, said in an interview.

Ten states and the District of Columbia now have some form of recreational cannabis rules, and 33 states in total have medical marijuana laws. However, all 50 states and the District of Columbia have data breach notification laws and privacy standards that any consumer-facing company must follow. These laws allow regulators to go after out-of-state cannabis companies that fail on privacy practices.

Retail sellers of recreational marijuana that collect payment card data instead of cash, or collect drivers’ licenses, are likely to face heightened hacking risks due to their troves of sensitive data. Medical dispensaries face similar privacy concerns, but have an extra layer of restrictions due to the federal Health Insurance Portability and Accountability Act and state equivalents.

Cannabis sellers could avoid many privacy lapses simply by following basic privacy and data security protocols in their state, cannabis attorneys said.

To help sellers meet the myriad regulations, large firms such as Dorsey & Whitney LLP, Duane Morris LLP, and Burns & Levinson LLP are offering legal guidance to navigate the shifting rules of a newly booming market. The recreational cannabis industry should bring in roughly $11 billion in sales in 2018, with that expected to reach $75 billion by 2030 as more states legalize marijuana, according to Bloomberg data.

Legal Compliance

All cannabis companies should have enough data security to prevent breaches in the first place. If a company is hacked, companies could limit their legal headaches by having a comprehensive data breach response plan that alerts regulators for affected consumers, cannabis attorneys said.

“The same data security and privacy laws and regulations apply to businesses generally, regardless of the fact that that cannabis is not legal federally,” St. Jean said.

Medical cannabis businesses must ensure they’re protecting sensitive health information under HIPAA standards and must separate health data from recreational information to stay in line with federal rules, they said.

“Medical records should be treated with the protection medical information in general is required to be treated under applicable” state privacy laws, St. Jean said.

Cannabis companies should know when to notify state regulators after a data breach, privacy and cannabis attorneys said. Even if a company operates in one state, businesses still have to alert consumers in other states that may have different notification periods or standards, they said. Some states, like California, also make cannabis companies follow specified data security standards to protect marijuana consumers’ sensitive personal information, they said.

A data breach could put a cannabis company in a precarious position if it has to alert a consumer in a state where marijuana isn’t legal, Griffen Thorne, tech and cannabis attorney at Harris Bricken, told Bloomberg Law. A state attorney general opposed to marijuana legalization, for example, may target out-of-state marijuana companies for partisan or personal reasons, going after them for minor privacy infractions, like not having updated privacy policies or leaking non-sensitive data, he said.

To lower enforcement risk, companies should alert all state attorneys general as soon as possible after a data breach, privacy attorneys said. They should also have a heightened focus on data security standards because of the sensitive personal information, such as drivers license numbers, payment card data, and cannabis purchase history, that is very enticing to hackers, they said.

Health privacy issues for the U.S. cannabis industry could soon go away as more states seek to legalize marijuana. Michigan voters approved recreational marijuana in November, and weed shops opened in Massachusetts over the Thanksgiving weekend. New York and Connecticut lawmakers said they’ll start to consider legalizing marijuana in 2019.

“This bifurcated approach may phase out more as the industry evolves given that the need for medical referrals have waned in light of the ability to purchase the product recreationally in many areas,” St. Jean said.


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St. Vincent, and a chain of smaller islands, SVG  a member of the Organization of Eastern Caribbean States (OECS) are the first OECS members to decriminalize cannabis for medical purposes and scientific research. Fifteen nations in the Caribbean Community (CARICOM) organization also place marijuana decriminalization high on its agenda.  


Forbes report..

Speaking from SVG, Minister for Agriculture, the Honorable Saboto Ceaser said the passing of the Bill in Parliament on December 11 signifies the Caribbean island is now positioned to become a globally leading medicinal cannabis hub; not only in terms of high-quality production but research, according to an OECS news release.

“The planning of this innovative industry has been carefully conducted over a long period in close consultation with the agricultural sector and many different stakeholders to reach the level of maturity we see today,” says Minister Ceaser. “There is broad recognition and buy-in of the economic benefits this tightly controlled and regulated industry is expected to bring regarding direct employment, the creation of support industries and foreign investment.”

The minister went on to describe the unique microclimate of the islands boasting, “SVG’s growing conditions are suited to producing the highest quality grade medicinal cannabis available on the global market.”