‘Legislative Advances made in Jersey’ – APPG Minutes 26.04.22
All-Party Parliamentary Group on CBD Products
3rd Meeting
“Legislative Advances made in Jersey”
April 26, 2022
15:05-15:58
Committee Room 16, Committee Corridor, Houses of Parliament
and Online
DRAFT Minutes
Present
Crispin Blunt MP - Chair
Lloyd Russell-Moyle MP - Officer
Tarsilo Onuluk - Office of Crispin Blunt MP
Ed Warner - Office of Crispin Blunt MP
Gillian Cowell - Office of Stuart McDonald MP
External
Nick Morland - Secretariat
Adrian Clarke - Secretariat
Andy Cutbill - Secretariat
Alex Markland - Secretariat
Dan Houseago - States of Jersey
Dr Jim Robinson - States of Jersey
William Curley - States of Jersey
Marika Graham-Woods (CTA)
Jamie Bartley (CIC)
Rebekah Shaman (BHA)
Catherine Wilson (EIHA)
Tony Reeves (EIHA)
Jade Proudman (Charlotte's Webb)
Renata Legierska (CSAB Jersey)
Online
Kyle Esplin (SHA)
Prof. Mike Barnes (MCCS)
Charles Clowes (CIC)
Apologies
Baroness Manzoor
Emma Lewell-Buck MP
Jersey perspective: Legislative Advances made in Jersey
Crispin Blunt MP, Chair of the APPG, welcomes everyone to the meeting, and invites Dan Houseago, Group Director, Economy and Partnerships, Department for Growth, Housing and Environment - States of Jersey, to give an overview of the legislative advances made on the island regarding Cannabis.
Dan thanks Crispin for his introduction and proceeds to take the attendees through the established legislative framework.
He begins by explaining the background situation in Jersey and the setup of the DCM to find a new alternative to Jersey’s traditional farming of milk, potatoes and flowers. He stressed the necessity for Jersey to diversify and be recognised as an innovative island. The DCM was established based on work done by the National Non-Food Crop Centre for Alternative Crops singling out Cannabis as a substantial opportunity. An early partnership was established with Nick Morland of Tenacious Labs (TL) to create a degree of agility and the conditions for economic success (working with people who are closer to markets, to everyone’s benefit).
Dan then lays out the approach adopted by Jersey in order to build the island’s Cannabis Investment Framework, which came about in three distinct phases:
Establishment of the Jersey Cannabis Agency in accordance with UN Convention on Narcotic Drugs. The UK was set up as the parent regulator via the Home Office (needed as Jersey is a state rather than a stand-alone country). Jersey has and continues to build a good relationship with the Drugs and Firearms Unit within the Home Office (HO). This allows Jersey to test its own policies against market, independent of the UK. A Memorandum of Understanding (MOU) created on 6th October 2020 between Her Majesty’s Government (HMG) and the Jersey Government (JGov) signals that ‘government to government collaboration is welcomed’. The MOU enables Jersey to use the HO as a partner and consultant. Working with the HO, Jersey was able to award two cannabis growing licenses in 2020 (the first GB licenses awarded since 1998). The island now has five license-holding cannabis businesses, and is already attracting cannabis businesses from other countries.
Amendments made to Jersey Proceeds of Crime Act 2002 (POCA), allowing cannabis businesses to operate on the island, opening bank accounts, engaging with legal professionals, gaining investment etc., significantly reducing barriers to entry – “without fear of committing a crime by getting involved”. In the summer of 2021, legislation was changed, decriminalising operations and establishing a list of ‘legal cannabis market’ geographies (e.g. Colorado, USA) with which Jersey-based businesses could trade. Tenacious Labs (TL) aided with this, in its role as chair of the Cannabis Services Advisory Board (CSAB). This emphasis on creating a transparent, trusted regulatory framework has significantly helped protect businesses, government, investors and the general public.
Commitment to R&D. JGov’s desire has been to demonstrate its agility in innovation, to maximise opportunities for embryonic businesses on the island and to establish the island as a ‘centre of excellence’ on the world stage. Jersey is continuing to work on developing seed banks, intellectual property, educational partners and further opportunities for developing a skilled workforce. “There is a wall of investment money waiting to enter the cannabis market, circling the globe looking for somewhere safe and stable to land”. That place is Jersey, but such partners have to be chosen carefully – to be both innovative and risk taking.
Dan Houseago then moves on to talk about the economic development that this framework has led to, and what has been achieved by Jersey’s willingness to work with calculated risk. Dan lays out reasons why Jersey was primed for the original opportunity – i.e. its existing high quality but redundant infrastructure (greenhouses etc.) and its existing but increasingly redundant horticultural skilled labour. (NB it costs £15-20M to develop a full-spec greenhouse operation, even with existing infrastructure). Dan also talks about the importance of quality and building premium products (for which Jersey already has a name), seeking to replicate a premium industry similar to that of the UK’s Scotch Whisky.
Dan then explains how Cannabis is seen as an Important additional source of revenue to the island post-COVID. The projections of tax intake are £4-5million per hectare per year and currently 10-15 hectares are being used for cannabis. There is also around £2m in income tax from people currently employed in the industry, with each facility employing approximately 50 workers. There are also many industries and businesses engaged up and down stream, including energy, construction, supply chain, legal, banking – all filtering money back into the local economy. The broader infrastructure investment has benefitted the whole island and its inhabitants, and led to advances in carbon neutrality.
Dan then moves onto his concluding remarks, highlighting lessons learned so far in building the conditions for economic success. Choosing the right public/private partners has been key, with a cross government approach adopted from the outset, and alignment with police, planning, health etc. gained from the start. Setting up the CSAB as a conduit between industry and government has helped the state move at the pace of the wider, commercial world. There is however a continuing and constant need, says Dan, to update the existing legislative framework (medicines law, misuse of drugs, proceeds of crime, food safety, planning regulations, IP legislation, as well as bespoke regulations especially for cannabis). A significant competitive advantage can be gained, says Dan, by doing this thoroughly from the beginning.
Crispin Blunt MP thanks Dan Houseago for his insights and opens a discussion to the floor:
Discussion: Could the Home Office create the infrastructure necessary for a UK CBD industry, allowing jobs, investment and bioscience to be developed here on the mainland?
Jamie Bartley (CIC/Unyte) begins the discussion by stating that he doesn’t think primary legislation change is needed in the UK. Home Office guidance documents are currently restricting development, but not restrictive primary legislation at the moment.
Tony Reeves (EIHA) then asks Dan Houseago if he found that the Home Office is looking to use Jersey as a model of the rest of the UK.
Dan replies that while JGov does not stray into matters of policy, he and his colleagues have found the HO very professional, collaborating to build a functioning reciprocal arrangement. JGov believes it has indeed built a template that could be used repeatedly by the HO and further afield, but there are still some problems to iron out. However Deputy Chief Minister Senator Lyndon Farnham continues to champion the industry, and ministers are meeting and discussing regularly. Cross party alignment is essential, points out Dan.
Nicholas Morland (secretariat, Tenacious Labs (TL)) states that success has been about building the right processes around the right structure. He points out that most of the hard work had already been done by JGov before TL and the CSAB become involved. The CSAB has invited JGov to frequently discuss points of improvement to proposed processes and frameworks. The CSAB has since spent time talking to the people impacted – local residents, the farmers, the energy businesses, the politicians – openly discussing everything that the CSAB is doing. There has been very little resistance says Nick – with perfectly respectable issues getting discussed and resolved with time. The job has been to present a reasonable first draft that involves all of the markets.
With a request from Crispin Blunt for more detail on the structure, Dan explains that the Jersey Cannabis Agency is a body providing licenses to cultivate, possess and supply cannabis for medicinal and research purposes, and in partnership with the HO looks after all licensing capability on the island. Working to and advising the agency from a commercial perspective is the industry body – the CSAB. This structure mirrors the proven and successful financial services structure. The HO is the cannabis agency equiavlent in the UK. The structure has been created to depoliticise the regulation and discussion going forward, and to hold up the integrity of the product.
Rebekah Shaman (BHA) then states that UK farmers have had a lot of issues with the HO. She argues that if the UK wants a thriving industry there has to be more active support. An alternative route might be taking cannabis out of HO Drugs and Firearms Dept and into the Environmental Dept.
Dan agrees re support, but says that not every regulator is reasonable. He says however that he has not found the HO to be inhibitive in the slightest. He says that it could be tidier if Jersey had the power to issue its own licenses, but closer links need to be forged with the HO. Until then, the argument isn’t there. He likes the idea of people positioning themselves with the right framework (why advisory boards are important). Industry is starting to get dedicated people who are trusted, but JGov needs to make sure the regulatory experience is good for both sides.
He adds that the JGov’s Jersey Business Office has had success offering additional help to business who are looking to establish themselves on the island.
Marika Graham-Woods (CTA) then asks Dan if he thinks a more successful UK route might be a Cabinet initiative, set up within government, and then moved outside into relevant departments such as the HO.
Dan Houseago states that the Jersey cabinet equivalent welcomed the initiative and then indeed moved out in line with the civil service to work with industry. ‘Politically driven, industry supported’ has worked well, he says.
Crispin Blunt concludes the meeting, thanking Dan Houseago for presenting to the APPG. He points out that the APPG and its proposals for an ordered regulatory regime are already starting to gain significant senior political champions. He thanks the secretariat for its work, and the meeting ends.
The meeting is terminated at 15:58.