Forget marijuana licence if you don’t have buyers, says government

Sunday March 01 2020

As Cabinet convenes tomorrow to approve the new guidelines for marijuana growing, ministers have proposed a new pre-licensing regime that requires investors in the country’s nascent marijuana industry to secure buyers before they are given licences.
Sunday Monitor understands that the new proposal to the Cabinet sub-committee on marijuana came from National Drug Authority (NDA) and Health ministry.
The architects of the new proposal hope that such a radical measure would streamline things and help the government kick out speculators in the multi-billion medical cannabis industry.

“We need serious people not vendors. We don’t want people who are going to get clearance and then start vending medical cannabis licences….We want serious investors who are going to produce cannabis for medical purposes only,” the NDA chairman, Dr Medard Bitekyerezo, explained.
Under the proposed revised guidelines for marijuana business, the more than 100 companies and individuals with pending applications, will be asked to present evidence of marijuana buyers before getting licences for growing or exporting marijuana products.

Sources close to the Cabinet sub-committee on marijuana told Sunday Monitor that discussions are ongoing to decide whether all those who had applied should be asked to re-submit applications with “mandatory offtake agreements”. These agreements take months or even years to negotiate.
The agreements are entered between producers and buyers to buy or sell a certain amount of the future production.
They are usually negotiated long before the construction of a facility to guarantee a market for the facility’s future production and improve chances of getting financing for the installation concerned.

Other requirements
The requirement for offtake agreements comes hardly a month after the Cabinet sub-committee on medical cannabis proposed a minimum capital of $5m (Shs18.3b) and a bank guarantee of Shs4b.
They had also demanded 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 other requirement is to ensure that marijuana farms or sites are not 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.

Growing of cannabis for treating severe medical conditions such as cancer, Parkinson’s disease, Alzheimer’s disease, arthritis and other neurological conditions is already happening in Uganda even as other investors continue to complain about the Cabinet delays.
The Health minister, Dr Jane Ruth Aceng, is expected to present the new guidelines and a confidential list of more than 100 companies and individuals seeking government permission to grow and export cannabis for medical purposes.

Background
The Narcotic Drugs and Psychotropic Substances Act, 2015, allows cultivation, production and exportation of medical marijuana and mandates the Health minister to issue written consent for medical marijuana.
However, Dr Aceng has since April last year kept the companies guessing due to absence of guidelines for the new industry. Cabinet has for the last five weeks been postponing debate on the matter, pending approval of the draft guidelines.
Ms Robinah Nabbanja, the State Minister of Health (General Duties) explained how coronavirus, locust invasion and other urgent emerging issues diverted Cabinet attention and reiterated that the proposed guidelines will be discussed and approved by Cabinet before going to Parliament.

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  • Government sets strict rules for marijuana growing

    Monday January 27 2020

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    Individuals and companies seeking to grow or export marijuana for medical purposes will be required to present minimum capital of $5m (Shs18.3b) and a bank guarantee of Shs4b.

    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.

    Cabinet is expected to convene this morning to discuss and approve the list of 15 guidelines for medical marijuana growing in the country before Parliament is briefed on the matter.

    The Health minister, Dr Jane Ruth Aceng, is expected to present the new guidelines and a confidential list of more than 100 companies and individuals seeking government permission to grow and export cannabis for medical purposes.

    The Narcotic Drugs and Psychotropic Substances Act, 2015, allows cultivation, production and exportation of medical marijuana and mandates the Health minister to issue written consent for medical marijuana. However, Dr Aceng has since April last year kept the companies guessing due to absence of guidelines for the new industry.

    “On Monday [today], I will be presenting paperwork on cannabis to Cabinet for them to approve guidelines and consider the growth of cannabis. So my humble request is for you to wait for Cabinet to pronounce itself on this issue.” Dr Aceng told Daily Monitor last Thursday.
    A senior official at the National Drugs Authority (NDA) told Daily Monitor at the weekend that the new guidelines were drafted by a joint team from Health and Internal Affairs ministries, and NDA to minimise the risk of diversion of medicinal cannabis.

    Current practice
    Growing of cannabis for treating severe medical conditions such as cancer, Parkinson’s disease, Alzheimer’s disease, arthritis and other neurological conditions is already happening in Uganda.

    Industrial Hemp (U) Ltd is currently working with Pharma Limited, one of the biggest Israeli cannabis firms, in growing marijuana for medical purposes in Uganda. They have invested $360m (about Shs1.3 trillion) in Hima, Kasese. The company is expected to export medical marijuana from Uganda in March.

    Increasing need for pain management therapies and growing disease burden of chronic pain is also expected to boost demand. Scientific study of the chemicals in marijuana called cannabinoids has led to approved medications that contain cannabinoid chemicals in pill form. Those backing marijuana also say the plant contains chemicals that may help treat a range of illnesses, particularly for people with intractable nausea and vomiting, chronic pain, spasticity and epilepsy.

    More than 100 companies- foreign and local - have positioned themselves to grow and export marijuana in Uganda. The government has formed a committee chaired by the Internal Affairs minister, Gen Jeje Odongo, to screen the applicants with a view to kicking out “speculators” and recommending “serious companies and individuals” for medical marijuana licences.

    Other committee members include the Permanent Secretary in the Ministry of Internal Affairs, Dr Benon Mutambi, and the police commissioner-in-charge of narcotics, Mr Tinka Zerugaba. The Health ministry is also represented on the committee. The Narcotic Drugs and Psychotropic Substances Act, 2015, mandates the ministers to issue letters of consent.

    Marijuana companies
    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

    editorial@ug.nationmedia.com

  • 50 firms compete to grow, export marijuana

    Wednesday July 24 2019

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    Foreign and private companies have joined the shove to grow and export marijuana in Uganda, even before the authorities in government complete consultations on the medical and financial benefits of cannabis.
    The Narcotic Drugs and Psychotropic Substances Act 2015 that was passed by Parliament, has triggered a gold rush among prospective local and foreign marijuana entrepreneurs, who are keen to invest in the medical marijuana industry.

    Even when the authorities are still grappling with the idea of how to regulate the growing of medical marijuana, Daily Monitor understands that the number of people and private companies seeking to grow and export weed for medical purposes has increased from 20 in April to 50 in July.
    The government is also under pressure from the various marijuana dealers to explain why they allowed Industrial Hemp (U) Ltd, a private company working with another Israeli-based cannabis firm to grow marijuana in Kasese and “frustrated” others through “delaying tactics”.
    Health minister Jane Ruth Aceng has for more than three months been ambivalent on how to proceed on a matter.
    When contacted to explain the status of the government consultations, Dr Aceng yesterday asked Daily Monitor to leave her alone.
    The minister vowed not to comment about ‘marijuana things’ anymore and without divulging details, confirmed writing to all the competing companies.

    “I’m tired of responding to the issue of marijuana, please leave me. I am tired. I don’t know what else you people want me to tell you that I have not already told you….Forgive me [but] I am tired and am not going to discuss that subject anymore. Go to the companies [and] ask them to give you the minister’s response and I responded to nearly 50 of them,” Dr Aceng said.

    In view of continuous calls from ganja planters wanting to know the fate of their applications and those seeking information about marijuana business, sources said Dr Aceng on July 3 wrote to all the 50 marijuana companies and alleged that Uganda had not yet started issuing operational permits for companies to grow and process marijuana for medical purposes.
    Although the minister told companies that government had not yet started issuing marijuana permits, in April this year, Daily Monitor broke a story with details on how Uganda on December 7, 2017, exported unrefined cannabis buds/ flowers to South Africa’s National Analytical Forensic Services in Pretoria.

    Industrial Hemp (U) Ltd, a private firm working with an Israel company, Together Pharma Ltd, is currently growing and processing marijuana from its Kasese facility. The company was given the licence in 2016.
    The company is also in the process of exporting marijuana, Cannabinol (CBD) and Tetrahydrocannabinol (THC) with mixture of 2.7mg THC and 2.5mg CBD for Sativex drugs approved in USA, Europe and Canada. Oil Risin contain Dronabinol for making Marinol and syndros capsules and CBD enriched creams for various skin disorders.

    Minister’s letter
    In one of the letters to marijuana firms applying to grow and process cannabis for medical purposes in Uganda, Dr Aceng wrote: “The government of Uganda through the Ministry of Health is still in early stages of carrying out wide consultations on this nascent area to understand the economic benefits of cannabis, its medical value based on scientifically proven evidence including the challenges of regulation so that we can formulate a way forward.”
    She added: “In line with the above, we have not yet progressed to the stage of granting operational permits for entities to grow and process cannabis for medical export in Uganda. However, we welcome more information and input on the subject matter.”

    Reactions
    Mr Edie Kwizera, the former Bufumbira legislator who described himself as “a strategic consultant” for a consortium of UK-based companies, seeking to grow and process marijuana in Uganda, yesterday accused Dr Aceng of frustrating investments and playing politics yet Section 11 (I) of The Narcotic Drugs and Psychotropic Substances Act 2015 mandates her to issue written consent.
    “The minister could be dillydallying because she is a Born-Again Christian but the law allows growing and processing of marijuana for medical purposes,” Mr Kwizera said.

    “Many investors are stuck, they are losing business because she has refused to act. Let the minister ask Parliament to repeal the law if she doesn’t want people to invest. She is hiding behind wide consultations on the matter yet the same government in 2016 licensed some companies to grow the same crop. These are double standards,” he said.

    What is medical marijuana?

    Relevance. The term medical marijuana refers to using the whole, unprocessed marijuana plant or its basic extracts to treat symptoms of illness and other conditions.
    According to World Health Organisation, several studies have demonstrated the therapeutic effects of cannabinoids for nausea and vomiting in the advanced stages of illnesses such as cancer and Aids.
    For instance, dronabinol (tetrahydrocannabinol) has been available by prescription for more than a decade in the USA.

    Other therapeutic uses of cannabinoids are being demonstrated by controlled studies, including treatment of asthma and glaucoma, as an antidepressant, appetite stimulant, anticonvulsant and anti-spasmodic.
    The US Food and Drug Administration (FDA) has not recognised or approved the marijuana plant as medicine even though scientific study of the chemicals in marijuana, called cannabinoids, has led to two FDA-approved medications that contain cannabinoid chemicals in pill form.

    ymugerwa@ug.nationmedia.com

  • How government plots to lock out locals in marijuana trade

    Friday January 31 2020

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    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.

    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

editorial@Uganda.nationmedia.com

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