Legal Weed: An Opportunity to Reimagine International Trade

By Claire Nelson

During the 1990s, free trade policies introduced by the World Trade Organization (WTO) destroyed the banana industry of St. Vincent and the Grenadines. In turn, many farmers in St. Vincent turned to growing cannabis when they could no longer make enough money growing bananas or other agrarian products. As a result, St. Vincent is now one of the largest producers of cannabis in the world when adjusted for size and population. Although farmers are now allowed to grow marijunana for medical use, the industry is also not without its issues. Legalization is often touted as the solution to the problems and damages done to growers and users of marijuana when it was illegal. However, blanket legalization and liberalization of the marijuana economy also puts small scale and traditional growers at risk of exclusion and exploitation. 

Junior “Spirit” Cottle, a co-founder of the St.Vincent and the Grenadines Cannabis Revival Committee (SVGCRC), grew up in rural St Vincent. Now Cottle serves as a liaison with the government and advocates for small growers whose livelihoods are once again being threatened by large corporations. In a 2015 statement about the state of drug and economic policies in St. Vincent, Cottle says: “We are concerned about the lack of farmers’ representation in a debate that is so close to them, which ultimately is going to affect them more than anyone else […] our growers need equal and sustainable development of the rural economies.” Certainly the newly legal status of the marijuana economy is going to remove many of the barriers that have been faced by cannabis growers up till now. However, it still presents a different, but ultimately familiar challenge: managing the concerns and needs of longtime traditional and small growers against those of quickly growing cannabis corporations. 

In North America, the anticipation of legal weed becoming a massive industry has created a ‘green’ rush. This has led to the growth of large, heavily-invested-in cannabis companies. The wealth and power of these companies has sparked concerns about them dominating the market, excluding small growers, and even exploiting international labor and product. 

Canadian Corporate Cannabis

The Canadian government legalized cannabis for recreational use in June of 2018. This act made Canada only the second country to create a nationwide market for marijuana, after Uruguay.

Currently, international trade of recreational marijuana is banned by international narcotic treaties, including the 1961 Single Convention on Narcotic Drugs, the Convention on Psychotropic Substances (1971) and the UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988). However, unlike US companies (where marijuana remains illegal at a federal level), Canadian companies are allowed to export medical marijuana to other countries that allow imports of medical marijuana. 

As a result, Canadian cannabis companies have a significant head start as the global leader of cannabis exports. They are already the main exporters of medical marijuana to European countries where medical use is legal, with Germany as their biggest importer. 

Cam Battley, the chief corporate officer at Aurora Cannabis, one of Canada’s largest medical marijuana companies, believes that the demand for international exports of cannabis is significant and will only continue to grow as more countries legalize its use. Large cannabis corporations are becoming adept at cutting through red tape. In the case of Aurora, Battley brags, “We’ve gotten good at this, we’re able to get our permits on both sides in under 30 days” referring to the company’s dealings in Germany. Canadian corporations see this proverbial ‘headstart’ as their opportunity to dominate the global market, both now and in the future. Indeed, by developing an infrastructure of international exports and cultivation of medical marijuana, Canadian companies seem to be laying the groundwork for the eventual legalization of international trade of recreational cannabis.

In January 2020, Canada’s Trade Commissioner Service (TCS) announced that medical marijuana companies will now be eligible for financial aid and support from the government. The TCS assists Canadian corporations looking to expand their business overseas by providing grant money, carrying out market research, and helping companies acquire import permits. At the moment TCS can only help marijuana companies who are looking to trade cannabis for medical or scientific purposes. Not only are Canadian corporations looking to expand globally, but the Canadian government sees opportunities to grow the Canadian economy and economic influence through the expanding marijuana market.

Critics of Canadian cannabis policy have argued that Canada is violating international free trade policies by not importing any marijuana for commercial sale. Since fully legalizing marijuana and creating a national market in 2018, Canada has only imported 20 kilograms of dried cannabis and 200.35 milliliters of cannabis oil. These imports were entirely for scientific purposes. In contrast, in 2019, 5,372 liters of Canadian cannabis oil was exported to 17 countries.

Mark Warner, an international trade lawyer, says that this practice violates Canada’s trade agreements and that other countries could potentially have the grounds to sue the Canadian government. Jamaica has already accused Canada of protectionism and is planning on making an appeal to the Canadian government. Jacana, a prominent Jamaican company that specialises in medical marijuana, has tried to work with Canadian licensed producers to ship their products to patients in Canada, but the Canadian government has denied them import licenses multiple times.  

The practices of Canadian companies reflect a national industry that is focused on becoming the global leader, even at the expense of traditional growers. This includes protectionist trade policies as well as expanding growing operations and exports to foreign countries. In particular Canadian companies have begun setting up production operations in Latin America, Africa, and the Caribbean.  

Caribbean Concerns

Kevin Edmonds, a Canadian doctoral student, warns that colonial patterns of extractive trade may emerge in the global marijuana market. Edmonds predicts that as more countries legalize and international trade soars, large amounts of cannabis grown in the Caribbean will be exported for medical marijuana products. The expertise and expensive equipment needed to refine cannabis into oils that can be sold at higher prices is concentrated in North America and Europe. Edmonds sees the potential for extractive patterns of trade using Caribbean labor to grow raw cannabis that will then be exported to the global north for refining. In such a case, the majority of the profits would go to large, western corporations as opposed to the growers in the Caribbean.

The Caribbean Community (CARICOM) Regional Commission on Marijuana released a report in 2018 called “Waiting to Exhale.”  The report stated that the Caribbean people have been overwhelmingly harmed by the illegality of marijuana use and trade. The commission advocates for the legalization of both medical and recreational marijuana; however, it has concerns about the role of international companies and governments. The report makes the point that legalization and reform cannot be undertaken “without a proper appreciation of the deep historical inequities between CARICOM states, as a group of underdeveloped, often exploited nation-states and companies from large, powerful nations interested in marijuana as an industry.” It then affirms that “CARICOM must avoid the unequal paradigms that were experienced in other trade arrangements and learn lessons from historical experiences with other crops and indigenous services.” 

The commission also expressed the challenges of integrating small growers who are already dependent on marijuana as their livelihood into a liberalized, legal economy that might favor companies, particularly foreign ones, with more capital. The commission estimates that up to 40% of people in St. Vincent and the Grenadines make their livelihoods off of marijuana. Consequently, the commission believes that the CARICOM states must work together to create a legal system that will both provide increased opportunities and protect those who have traditionally relied on marijuana production. 

Jamaica is one such Caribbean state which has a long tradition of using and growing marijuana. Some of this tradition stems from the usage of marijuana as a sacrament of the Rastafari faith Jamaica is home to. The followers of this faith, known as Rastas, have faced discrimination, poverty, and oppression from both the colonial and post-independence Jamaican government. Due to their exclusion from power and resources, Rastas and other traditional growers often do not own the land they grow on. As a result, these traditional growers fear being left out of the new legal economy due to high costs for licenses and lack of access to land. 

Jamaica decriminalized marijuana use and possession in 2015. Jamaican leaders hope that with legalization Jamaica can benefit from its longstanding associations with cannabis. To help enable this, the Jamaican government has set up a system of licensing for growers who wish to sell marijuana for medical or scientific purposes. Amongst others, Canadian companies are investing in and setting up cannabis operations in Jamaica, including companies like Aphria and Canopy Growth. 

In order to help small and traditional growers’ transition to the legal economy, the Jamaican government has created an Alternative Development Program (ADP) However, because most traditional growers lack titles to the land they grow on they have not been integrated into the ADP. The goals of the ADP are a good first step; however, the Jamaican state must further implement and expand the ADP, or adopt other policies, in order to integrate and help traditional growers compete with foreign corporations. 

Although there is already ample awareness of the damages many Jamaican people and growers have suffered as a result of the illegal economy, the acceleration of international marijuana trade has the potential to put them at risk of even more harm and exclusion. For this reason, the Jamaican state must manage the needs of small growers and the interests of large corporations both Jamaican and Canadian.  

Reimaging Trade 

In June 2019, Canopy Growth, another large Canadian company, was seeking to leverage ‘its substantial cash position to lay the foundation for a global, revenue-generating network.’ However, by April 2020 Canopy announced that it was leaving South Africa and Lesotho and stopping its cultivation in Colombia. In July 2020, Aphria reported $47.9 million in impairment charges in its operations in Jamaica, Lesotho, South Africa, and halted cultivation in Colombia. These actions suggest that Canadian companies may have been too ambitious and overestimated how quickly the global cannabis market would expand.

Still, despite this overestimation, there is continuing progress towards a globalized legal, medical, and recreational marijuana trade. This creation of a ‘new’ industry presents an opportunity for countries in the global south, particularly those historically hurt by the war on drugs and colonialism, to benefit from a new economic model. 

The international community must avoid falling into the traps of historical patterns of exploitive and colonial trade. International organizations like the UN and trade organizations like the World Trade Organization (WTO) must consider approaches that would not ‘kick away the ladder’ that Canadian companies are climbing up right now. The Canadian TCS currently will not work with companies that try to influence foreign governments and policies. Canadian, and in the future US, corporations should not attempt to influence other countries’ drug policies or try to ‘open up’ markets to foreign investment, as has happened many times throughout history. States in the Caribbean, Latin America, and Africa should in turn protect their small and traditional growers ahead of the interests of foreign companies. A newly legal marijuana market creates the opportunity for the international community, states, and businesses to reimagine how international trade can and should work. 

The views expressed in this article are the author’s own and may not reflect the opinions of The St Andrews Economist.

Photo by Brian Jones on Unsplash

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