Different entities and individuals are fighting over the control of Uganda’s prospective medicinal cannabis industry, with a section of government officials reportedly fronting a number of companies to cash in on the multi-billion dollar business.
Several entities with connections to already established companies in Europe and North America have been lined up by different officials as the government ponders a dive into the lucrative but dicey business.
There is also a fight between several entities of government on who should take the lead in directing to the different investors lining up to engage in the lucrative business estimated to be worth $3b (about Shs11.1 trillion) when it commences.
Among the entities that would be involved in licensing the entire chain are the ministries of Health, Agriculture, Justice and Constitutional Affairs and Internal Affairs; the National Drug Authority (NDA) and Uganda Investment Authority (UIA).
The use of cannabis for recreational purposes such as smoking remains illegal in the country. Authorities are, however, exploring its production for medical purposes subject to authorisation by relevant government bodies in line with the Narcotic Drug and Pyschotropic Substances (Control) Act 2015.
This newspaper has seen a Cabinet information paper by the Ministry of Health indicating that “the minister of Health has received applications from 14 companies interested in the cultivation, extraction and export of cannabis oil for medical purposes in line with the provisions of Narcotic Drug and Pyschotropic Substances (Control) Act 2015”.
The 14 are besides an already established firm, Industrial Hemp Uganda Ltd and its partners, which have been in the country for the past decade with operations in Kasese and other areas.
A source with insights into the infant industry told this newspaper that competition should not be a problem among the firms considering the export demands in the rapidly growing world market coupled with Uganda’s advantages like climate, labour costs and fertile soils. The problem, the source says, are major corporations that are trying to influence government officials to gain monopoly, from both local and international firms. The source says this will affect revenue that would have accrued to government and other such benefits to the country.
Medical cannabis is a term used to describe the use of the cannabis plant and its constituent cannabinoids to alleviate symptoms and help people struggling with medical conditions.
Across the globe, cannabis is one of the most exciting growth industries and is garnering significant attention from investors, manufacturers and researchers.
“There is a big economic value potential for the country considering the rate at which countries are opening up their markets for the sale of cannabis products for medical purposes,” the Ministry of Health notes in the brief to Cabinet.
In the Cabinet document, the minister lists the benefits to include employment opportunities, taxes, technology transfer, investment opportunities, and trade surplus, among others. For example, the paper notes, cannabis farming is labour intensive, all plant care and harvesting are done by hand, providing employment opportunities.
The Health ministry, however, warns that there is reasonable fear that legal cultivation of medical cannabis could lead to increase of the product, which will lead to escalation of cannabis abuse and associated consequences.
“The risks associated or resulting from the legal cultivation of cannabis are mitigated by the fact that cannabis is a highly controlled plant globally, regulations are overly strict, which ensures maximum adherence,” she adds.
In the Cabinet paper, it is proposed that the Minister of Health will issue written consent for the cultivation of prohibited plants, NDA will issue production and export licences and both the police and NDA will conduct inspection and enforcement of the law.
“As much as the area of cannabis cultivation and extraction on an industrial scale is new in Uganda, stringent measures are in place to regulate it. These projects will create jobs, bring in foreign currency, and above all there is no imminent threat to the people of Uganda or the environment if the measures put in place are adhered to,” the Health Ministry memo to Cabinet concludes.
Documents seen by this newspaper indicate that Industrial Hemp Uganda Ltd, founded and incorporated in 2012 in Uganda, is the only local entity that has so far been authorised to undertake activities related to the growing and processing of medical cannabis (medical marijuana) and cannabis products alongside Sativa for industrial purposes in Uganda, with the supervision of Ministry of Health and other responsible government agencies/department such as the police.
The company, which partnered with Together Pharma Limited of Israel, has commercial contracts signed for supplies in excess of $350m(about Shs1.3 trillion) annually to European Union countries, specifically Germany and Canada in North America.
“Industrial Hemp Uganda Limited obtained a no-objection from the National Drug Authority and equally has all the necessary clearance from the Ministry of Agriculture, Ministry of Internal Affairs and the Ministry of Health,” Justice and Constitutional Affairs minister, Gen Kahinda Otafiire, writes in a February 15 letter to the chief operations officer of Together Pharma Limited.
He adds: “The government of Uganda is well aware of their operations in Kasese District and the various benefits the said project has in terms of employment of Ugandans, revenue generation, technology transfer, development and improvement of the medical application of hemp and medical cannabis in the medical sector”.
On January 22, 2015, Prof Anthony Mbonye, the then director of Health Services at the Health ministry, wrote to Industrial Hemp Uganda recommending the company to work with various government entities.
“We are very interested in the medicinal component of your industrial activities and how it could contribute to the reduction of the burden of non-communicable diseases in Uganda.
Accordingly, I am recommending to you the Department of Pharmacy-Makerere College of Health Sciences, together with the Division of Pharmacy - Ministry of Health. They will address issues of product development and quality control,” he wrote.
On March 18, UIA issued an “Investment Licence” under section 16 of the Investment Code 1991 to the company to grow “medical cannabis for export” in Kasese, Busongora County North, Hima Town Council, and Uganda.
The holder of the investment is required to file annual returns of data on actual investment, actual employment created and status of the project.
The company expected to commence operations this year, will specialise in the cultivation, production and marketing of medicinal cannabis with high therapeutic potential and products extracted from the cannabis plant, for medicinal purposes and commercialisation of the pharmaceutical industry.
A report strictly to “Government of Uganda and agencies” that this newspaper has seen indicates the firm will produce active pharmaceutical ingredients for internationally approved pharmaceutical products, including Sativex, Marinol and Syndros and Epidiolex.
Sativex is approved as a botanical drug in the UK since 2010 as a mouth spray to alleviate neuropathic pain, spasticity, overactive bladder and other symptoms of a cancer called multiple sclerosis. This drug is developed by the UK Company GW Pharmaceuticals.
On the other hand, Marinol and Syndros is an appetite stimulant, antiemetic and sleep apnea-reliever. It is approved by the Food and Drug Administration (FDA) of USA as safe and effective for HIV/Aids-induced anorexia and chemotherapy induced nausea and vomiting. The pharmaceutical formulation is an oily resin in capsules which the company indicate it will manufacture here in Uganda. Epidiolex was approved in June 2018 in the US by FDA for treatment of epilepsy disorder, Glaucoma, Lennox-gas taut syndrome, Dravet syndrome and neurological disorders.
Licencing. Section 14 Narcotic Drugs & Psychotropic Substance (control) Act, 2019, which commenced on January16, 2019, empowers the National Drug Authority (NDA) to issue licences for export, import, manufacture, etc.
(a) issue licences, for sale, manufacture, production or distribution of specified narcotic drugs or psychotropic substances;
(b) prescribe the manner in which a narcotic drug or psychotropic substance is to be packed or marked for export;
(c) prescribe the records to be kept for the export, import, receipt, sale, disposal or distribution of a narcotic drug or psychotropic substance; and
(d) determine the line of narcotic drugs or psychotropic substances which may be supplied and prescribed for medical, dental and veterinary purposes and prescriptions.
Section 4 of the Act criminalises possession of narcotic drugs and psychotropic substances and provides sanctions, including lengthy prison sentences and fines.
Exceptions. The exception is in
Subsection (3) “(a) a person who has possession of a narcotic drug or psychotropic substance under a licence issued under Section 27 of the National Drug Policy and Authority Act, permitting him or her to have possession of the narcotic drug or psychotropic substance;
(b) a medical practitioner, dentist, veterinary surgeon or registered pharmacist who is in possession of a narcotic drug or psychotropic substance for any medical purpose;
(c) a person who possesses a narcotic drug or psychotropic substance for a medical purpose from, or using a prescription of, a medical practitioner, dentist or veterinary surgeon; or
(d) a person authorised under regulations made under this Act to be in possession of a narcotic drug or psychotropic substance.
Hemp Vs other crops
One acre of hemp produces much fiber as 2-3 acres of cotton. Hemp also uses less water than cotton. Cotton requires lots of pesticide and herbicides, while hemp doesn’t need any and only moderate fertilisation. On annual basis, one acre of hemp produces as much as 2-4 acres of trees from tissue paper, cardboards and all types of paper products can be produced from hemp.
The quantity of hemp paper is superior to tree-based papers and requires less toxic chemicals in the manufacturing process. It takes years to grow wood but only 120 days for hemp. Hemp seed contains a protein that is more nutritious and more economical to produce than soya bean protein.
Hemp seed is used to produce nontoxic diesel, paint, varnish, detergent, ink and lubricating oil.
Hemp can be converted into clean burning ethanol, produces more biomass than any plant species thus major source of ethanol fuel.
Countries legally growing marijuana
Countries such as Uruguay, Canada, Lesotho, Zimbabwe, and South Africa, some states in the United States, Germany and many other countries in the European Union have legalised cannabis for medical use.
In Lesotho, for example, Cannabis is widely produced and is a leading cash crop for the country. In 2017, Lesotho became the first African country to grant a licence for the cultivation of medical cannabis for export. Currently, the UK is the largest exporter of medical cannabis in the world. According to the International Narcotics Control Board (INCB), 95 tonnes of cannabis was produced in the UK for medicinal and scientific use, accounting for 44.9 per cent of the world total
Hemp is commercially grown in Africa by Egypt, in Americas by Canada, USA, and Chile.
In Asia, it is grown in China and India and China is the biggest exporter of hemp paper and textile, earning at least $200m (Shs745b) per year. Canada is now the biggest producer and exporter of hemp seed products, including hemp oil, hemp protein powder. It accounts for 60-90 per cent of the total USA hemp import market.
In Europe, it is grown in Austria, Denmark, Finland, France, Germany, Britain, Hungary, Poland, Portugal, Romania, Russia, Slovenia, Spain and Ukraine. Europe hemp industry is focused on industrial uses such as materials for automobiles and construction. European Union subsides farmers at $400 (Shs1.5m) per acre.