Curaçao’s Cannabis cultivation project
The proposal to start the possibility of Cannabis Cultivation projects in Curaçao is based on an integrated wellness and health approach. In this method, alternative healthcare including medicine based on herbs and other natural resources get special attention.
It also allows the establishment of projects of medicinal cannabis use and sales. Curaçao’s Minister of Health, Nature & Environment, Mrs. Susanne Camelia - Römer is leading this challenging legal reform project that can create significant economic benefits for the island.
Last year, Curaçao’s government was approached by investors who wanted to know its vision related to local cultivation of medicinal cannabis. Based on this request the cabinet of the Minister of Health made an extensive feasibility study to assess its viability, in light of the export possibilities. According to mr. Alvin Daal Director of this Cabinet, the first exploration showed that Curaçao has several factors in its advantage for the cultivation of Cannabis. The island’s medicine laws are properly structured, which creates an adequate legal framework for this purpose. Besides that, there are potential
investors who see a viable possibility to move their production of Cannabis based medicine to Curaçao. These indications encouraged a further research.
Legal Cannabis production is on the rise
Cannabis for medicinal use is now being cultivated in several countries. Canada and the Netherlands among others, have liberalized its use for medical and recreation purposes. In the USA 33 states have legalized Cannabis for medical and in 10 cases also for recreational purposes. The same goes for Colombia, Mexico, Belgium, Spain and Uruguay. Some produce the raw material first and then the final product, in pills, oils, ointments and so on. According to the current proposal, in Curaçao Cannabis use will be legalized for medical purposes only.
According to Daal, Curaçao has a perfect climate for this project, with enough sunshine, more than 12 hours per day. Besides that, the island is located outside the hurricane belt. Other islands in the Caribbean have this advantage too. What gives Curaçao the edge he thinks, is the combination of the climatic advantages and the adequate legal framework. In that sense he refers to the laws that govern the medical system but also to the reliable banking legislation.
“Other Caribbean countries such as Jamaica, St. Vincent, St. Kitts and Puerto Rico have legalized the production and medical use of Cannabis. Even though these countries’ climate is similar to Curaçao, they have higher risks of being hit by a hurricane, damaging their crops or greenhouses. Besides that, their legal framework is often less suitable” says Daal.
Being part of the Dutch Kingdom can be considered another advantage. The Netherlands is known for tolerating cannabis, both medical and recreational. This gives it a reputation of a country where it will be possible to do business with Cannabis. Although local costs of doing business are higher in Curaçao, the research showed that the advantages outweigh these. The majority of the companies that have expressed their interest in starting Cannabis production in Curaçao, give these arguments as the most important reasons to consider their establishment.
Minister Camelia-Römer is cautious
Minister Camelia-Römer explains that the government will not impose limitations to the number of permits that can be granted. “As long as there is land available, the permits can be obtained. At the moment there are enough possibilities”. According to an economic impact study of the Ministry of Economic Development, this sector can create between 700 and 1.000 jobs, in the cultivation and processing. The Minister is a bit cautious about these figures, but even if the outcome is lower than projected, the impact will be significant. Another advantage of developing this industry in Curaçao is its spin off on the development of agriculture.
“The skills of modern farming technology that this project will bring about, can also be used for the development of green houses for profitable local cultivation of crops that are now imported”, says the minister.
Cannabis production in the Caribbean
The Caribbean has introduced adaptations to its legislation since 2015 to be able to make use of this industry. The general warning for Caribbean countries according to a report of the CARICOM is to ensure that development of this industry is premised on innovation and not unduly rely on the provision of raw products for industrialized countries. This advice is not a surprise given the historical examples of persistent poverty that occurred with the cultivation of sugar, banana, cocoa and other Caribbean crops and raw products.
With this measure CARICOM wants to avoid the typical practice of multinationals producing and exporting the raw material from the islands, while the higher added value activities take place in the industrialized countries and thus take away the Caribbean’s chance of making a higher profit. In those cases, the islands are left out of most of the technical knowledge and profits. In the report from its Regional Commission on Marijuana 2018, ‘Waiting to exhale – safeguarding our future through responsible socio-legal policy on marijuana’, CARICOM recommends the Caribbean countries to introduce legislation that forces the multinationals to share their knowledge with the producing country.
According to Daal, the new legal structure in Curaçao takes this into account. The permits are granted to local investors, or international companies with a local partner. This agrees with the laws of the World Health Organization (WHO) on the production of herbal based medicine. The license owner is required to train its staff to be able to handle the production. This starts from the moment the seeds are imported. The staff should be able to do all the work. From the start of the production process, till the end.
Technology driven production
The cultivation and production will take place in hygienic and safe environments as is mandatory for the production of medicine. Besides cultivation of the crop, the medical cannabis production also includes extracting the oil, processing, packaging, storing etc. The companies are forced to train the local staff to meet the high standards of the WHO, as they will not get permits to hire workers from abroad.
The new companies can produce the final product locally, but they can also sell the semi-finished product. “The focus is on export, but the core of the production will take place in Curaçao”, says Daal. “At this level we are dealing with registered medicine. It might become a challenge to get enough locals with the necessary skill set. You need several pharmacists when producing at this scale”. He thinks that even though the export of final products is to be preferred, the profit that can be made on the export of semifinal products and oils should not be underestimated.
There is no preference incentive for a company that decides to go further in the production process to produce and export the final product. The production of only final products might require so many specialist workers that it’s questionable if Curaçao’s workforce would be able to fill that demand. According to the analysis, the project will produce around 700 direct jobs in the first year. The projection of these number of jobs is based on the plans that have been submitted by the 15 interested investor groups who are all required to work with a local partner. The new law is expected to be accepted by Parliament in the first quarter of 2020. The local producers can sell their products only to other pharmaceutical companies. Registered medicine can only be sold at local pharmacies.
Protection and security of the farms
The farms will all be located in a gated physical site, for safety reasons. There will be a lot of control on the production. Most Cannabis based medicine has a low level of TSC, which is the substance that creates the feeling of high. The production will thus not be attractive for recreational purposes as they do not have the level to make you go high. The local companies will produce prescription drugs, mostly to relieve pain but not to cure illness.
The products have not been fully tested and all their possible uses are not yet known. The products are now being used for relief of epilepsy, asthma and as a pain reliever. Scientists are still researching their usefulness in the cure of cancer.The Caribbean countries conducted consultations with different community and stakeholder groups. In Curaçao there were open consultation sessions at the University of Curaçao and presentations for the Chamber of Commerce. The promoters of the project gave presentations during a local wellness fair and there were consultations with the local drugs prevention and management organization and the Cannabis Bureau in the Netherlands.
The Ministry of Economic Development conducted a research and the local inspection of medicine and the Inspector General gave expert advice on the project.
An advantage of being part of the Dutch Kingdom is that they already have institutions with experience with medicinal cannabis. They have permitted recreational use for years. Being part of the Dutch Kingdom makes Curaçao a serious competitor in the Caribbean. “Those that are in the hurricane zone do not have a way to protect their green houses or outside cultivation against these storms.”
“With the correct legal structure Curaçao will have an advantage that one will not find easily”.
The new law is expected to come into effect in the first half of 2020. 15 companies have already submitted their license request. The screening and acceptance process will be meticulous. The potential investors are finalizing their business cases. An independent committee consisting of representatives of different ministries will review and approve the requests. The Minister of Health creates the framework but will not be involved in the acceptance process. The local national laboratory will also be involved in this process. “It’s important to remember that this is a medicine. Each plant is coded.
They are being harvested in a controlled manner and laboratory tested on quality. The packaging process is the same as any other prescription medicine”, says the Minister. The cultivation and production of medical cannabis in Curaçao will take place in controlled environment under strict regulations and control. “It will not be possible for everyone to sow some plants in their garden and after harvesting bring them to a main silo for packaging and sale”, says the Minister.
The companies have to comply to all the WHO requirements for the production of cannabis-based medicine and will be submitted to inspection by the Health Department. If local farmers have serious intent to enter this business, the government will create the possibility to help them set up a cooperation and get the proper training to develop the necessary skills to produce cannabis at the standard imposed by the WHO. All interested parties can get the information package with information about the necessary requirements. These entrepreneurs can get help with their farming, which can also become a big business as long as high quality requirements are included from the beginning.
The companies can start their operations, the moment that they receive the permit. The first production is expected by the end of 2020. The first jobs will take off in the preparation phase as the projects will need people to prepare the land. Besides that, the companies cannot wait until the green houses are ready to begin with training for the personnel. As soon as the companies begin to run, they will need more workers. Most will work on a contractual basis. Due to the character of the business, it will not be wise to work with temporary workers.
Why in Curaçao?
From the viewpoint of the investor, Curaçao is attractive for its adequate climate, outside the hurricane belt location, political stability and logistics possibilities. There is access to a skilled workforce that can be upgraded to work in this industry. The Cannabis projects will make use of technology driven agriculture. Every plant will have a bar code. Aside from the impact on technology and direct employment, the Cannabis industry also creates spin off activities that will spur employment in transportation logistics. An increase is expected in the people who work in shipping and handling. As the production of the medicine takes place locally, this can benefit the local pharmacies as the medicine is registered and available in Curaçao. Persons who live in countries where the sale of medicinal cannabis is not yet regulated, can come to Curaçao to buy it. If their disease is chronic such as epilepsy, they can even consider relocating to the island.