How government plots to lock out locals in marijuana trade

Friday January 31 2020

Restrictions. Some marijuana growers have

Restrictions. Some marijuana growers have started getting licences to export the drug for medical purposes. File photo 

By Yasiin Mugerwa

The Cabinet sub-committee on medical cannabis has proposed what sources called “elimination method” to lock out speculators from the budding medical marijuana trade.

Sources say the draft plan to limit access to marijuana trade was first discussed at State House after the Minister of Health, Dr Ruth Aceng, and National Drugs Authority officials complained about the “scramble for the licences.”

Explaining why government imposed strict guidelines, Dr Medard Bitekyerezo, the chairperson of NDA board, said people who want to grow medical marijuana must be financially stable so that once they are licensed, they start producing cannabis for medical use only.

“We need very serious investors, we don’t want speculators. If you allow everyone to grow cannabis, then we shall have only marijuana with no food. And we shall look on as our people starve,” Dr Bitekyerezo told Daily Monitor yesterday.

More than 100 companies and individuals (local and foreign) have already applied for government permits to grow and export medical marijuana to South Africa, Israel, UK, Germany, Canada and US.

The companies seek to tap into the $345 billion global market for the drug. But the process dragged due to lack of guidelines for the business.

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However, government has drafted 15 guidelines to regulate the trade. The first one calls for a capital base of $5m (Shs18.3b) and a bank guarantee of Shs4b for companies and individuals seeking to join the industry.
In Zambia, the latest African country to join the lucrative market, medical marijuana investors require only $30,000 (Shs110.5m) to secure a licence.

The country has also put in place safeguards on the cultivation, processing and export of the weed. The country approved medical marijuana for export last year.

Preferred foreign companies
Since most of the local companies cannot raise the proposed Shs22.4b, government is targeting selected foreign companies to run the industry.

These include Naturalgro, Barak, Cannops Africa, Quest Worths International Group, Prime Ranchers and Together Pharma Ltd, a listed cannabis company in Israel.
The Israelis are currently working with Industrial Hemp (U) Ltd, local company growing marijuana. They have invested $360m (about Shs1.3 trillion) and established marijuana farms in Hima, Kasese District.

A joint security team headed by the Internal Affairs Minister, Gen Jeje Odongo, is currently scrutinising piles of documents, including related background checks on all the applicants before they write to Health minister to issue letters of consent.

Although the involvement of the Internal Affairs minister is not provided for in the Narcotic Drugs and Psychotropic Substances Act 2015, government was forced to constitute a joint security team to mitigate risks of opening floodgates without due diligence on the companies and individuals in the trade.

The Act allows cultivation, production and exportation of medical marijuana and mandates the Health minister to issue written consent for dealers.

The draft document also includes provisions for who can grow and sell cannabis for medical purposes as well as regulations aimed at preventing it from falling into the wrong hands.

However, other analysts say the proposed stringent guidelines denote the sensitivity of the business in a country where illegal recreational marijuana dealings remain one of the problems, yet government is under pressure to raise the GDP per capita of $1,301 (Shs3.8m) and put the country into middle income status in the next five years.

The Permanent Secretary in the Health ministry, Dr Diana Atwine, and Mr Benjamin Cadet, one of the directors of Industrial Hemp (U) Ltd, a medical marijuana company, have warned of dire consequences if government allows anyone to grow marijuana.

“This cannabis business in Uganda needs to be highly regulated at Ministry of Health, NDA and security level so that the crop remains strictly for medical, dental, veterinary and industrial use only,” Mr Cadet said.

Danger
“Recreational use should never be accepted in Uganda. Having the money is not enough. The export conditions and security guidelines imposed by EU are even tight that few people can handle,” he added.

Prof Venansius Baryamureeba, the former Makerere University chancellor, backed the government guidelines
“You have to limit those involved in manufacturing nuclear bombs. Just imagine if poor countries are allowed to have a nuclear bombs? Likewise, marijuana is not for everybody to grow,” Prof Baryamureeba said.

“Growing marijuana for medical purposes should be for those who already have money and that’s how you can ensure that it does not leave the gardens and end up in the hands of young people or others who are not supposed to access it. It should be in the category of producing for export to the Western world and government should ensure that more than 95 per cent is exported,” he added.

But Dr Ekwaro Obuku, the head of Medical Workers Association, believes that in trying to tighten access to the trade, government is aiming at a lucrative market to meet the revenue collection targets set out in the 2020/21 – 2024/25 National Development Plan III.
Government is seeking Shs342.607 trillion to finance a new plan that promises to increase average household incomes and improve the quality of life of Ugandans.

“The downside is what government is trying to do in order to raise the required funds, however, is that smaller scale medical marijuana farmers who will be locked out, in particular Ugandans who lack such capital or infrastructure. Possibly this is part of the regulatory environment to tighten access to marijuana,” Dr Obuku said.

On the medical use of marijuana, he said there is new literature suggesting it is useful in pain management in chronic illnesses
Dr Ben Manyindo, the executive director of Uganda National Bureau of Standards, called for appropriate national laws and regulations on marijuana trade and warned that funds required may lock out Ugandans investors.
“Laws and regulations are key in management of business,” he said.

Other guidelines
Investors will also be required to present a tax clearance certificate from the Uganda Revenue Authority, lists of employees and their job descriptions, a valid trading licence, evidence of value addition to cannabis and audited accounts. The marijuana farms/sites must not be located near schools, hospitals and residential areas and in case of any associates/business partners, the details must be disclosed to government, including site designs, a robust security system with access control systems and intrusion systems in place.

Some marijuana firms
Licensed
1. Industrial Hemp (U) Ltd
2. Together Pharma Ltd
Applied pending licence
3. Natgro Phama (U) Ltd
4. Medraw (U) SMC Ltd
5. Urban Properties (U) Ltd
6. Prime Ranchers
7. Silver Seeds (U) Ltd
8. Dave and Dave Group
9. Seven Blades
10. Cannops Africa
11. Quest Worths International Group
12. Premier Hemp
13.Sativa Agro-tech Ltd
14. Zeus Agro Ltd
15. Owesia U Ltd

ymugerwa@ug.nationmedia.com

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