7 months ago
37
Medical marijuana company Jacana will shutter one of its four, saying ineffective regulation, including the inability to deliver products on par with illicit ganja operators, has hurt its viability.
“We need to be commercially competitive with the black market,” said Alexandra Chong, founder and CEO of Jacana, in an interview with the Financial Gleaner.
Jacana employs about 100 staff, seven of whom were positioned at the Portmore location. The store will close by month end, and the staff there will be made redundant.
The company has no plans to close other locations, Chong said. Jacana operates retail outlets in St Ann in Island Village; and two in Kingston at Manor Park Plaza and New Kingston Business Centre.
On the ground, the lack of enforcement of informal and illicit traders has seen illegal weed operators distributing their products in proximity to Jacana’s Portmore location. Additionally, while illicit operators can deliver product to consumers, legal operators cannot, due to a regulatory blockade.
Chong said that Jacana along with other legal operators are forced to evolve and sell other products to augment flat weed sales. This includes offering coffee, farm tours, and spa services.
Since the company started seven years ago, Jacana invested some “US$40 million” in its operations, its founder said. Most of the funds are spent on the backend, that is, at its 100-acre farm in St Ann, its warehouse, manufacturing facility, and lab.
Chong returned to Jamaica after selling her online dating app LuLu, through which women could evaluate and rank men based on their appeal, on a scale of zero to 10.
“I always wanted to return home, and the best way I thought I could help was to be part of an emerging industry and bring in foreign investment and capital. So, in closing Portmore it is with the heaviest heart and sadness,” she said.
The Lulu app was sold in 2013 to UK-based Badoo, which operated a larger dating app. The sale of the company financed the buildout of Jacana.
In 2015, with the decriminalisation of weed in Jamaica, Chong considered investing in the emergent sector. She initially wanted to partner with local players, but realised that the sector was too multifaceted and required hands-on involvement.
In 2018 she decided to enter the sector. The regulations at the time were emerging, but Chong expected rules to adapt with time to keep pace with global standards, while addressing local issues. Nearly a decade since decriminalisation, the Cannabis Licensing Authority, CLA, which regulates the sector, has had five different CEOs; has been answerable to three holders of the office of minister at different times; and dealt with multiple committee reports, but the sector remains in a state of flux. Or in Chong’s words, it’s a “complete catastrophic failure”.
Chong said that cannabis regulators across multiple territories have amended regulations to address local issues, but not in Jamaica.
“Jamaica has a fantastic strong global reputation of being the ‘spiritual home of cannabis’ and whilst other countries legalise and build their brand, Jamaica is getting left behind. We need these outdated interim regulations updated in order to build Jamaica’s brand globally and competitively,” she asserted.
An important but unaddressed issue is transportation costs to move ganja from warehouses to herb houses, she added. This requires armed guards and convoys with CLA personnel and increases the cost of doing business, which illicit operators easily avoid, Chong charged. Also, the inability, that is, not being allowed to deliver the product to potential customers at their homes results in incentivising potential customers to buy from illicit operators, she said.
Jacana has no plans to shutter other stores.
The company is one of scores of licensees approved for various activities by the CLA. Since its inception up to last December, the regulator has issued 133 licences, and 25 more applications have been approved but await the payment of fees prior to issuance of the licence. Another 56 applications are at the conditional approval stage.
English (US) ·