Local cannabis growers could miss out on
what's predicted to be a multi-billion dollar medicinal cannabis
industry because of expensive licensing fees.
As the government develops a medicinal cannabis framework, the Minister
of Health David Clark said he was keen to see New Zealand companies
benefit.
The industry is expected to be worth $80 billion by 2025.
But getting set up comes at a price. To apply for a licence would cost a
small-time cultivator between $14,200 and $16,800 initially, which they
would then be required to renew every year at a cost of between $11,100
and $13,200.
For a large cultivator that would be up to $23,200 for an initial licence and $16,800 each year to renew.
Hikurangi Cannabis Company, which is building a manufacturing plant in
Ruatoria, was formed to ensure that locals in the small East Coast town
were able to grow high-quality crops on their whenua - but chief
executive Manu Caddie said the high fees may make that difficult.
"Sixteen thousand dollars for a micro-cultivation licence is a huge
amount of money for a single whānau to put up on top of all the other
costs involved in getting security and proper facilities in place."
"Having said that, there's hopefully good money to be made but that will
be a barrier to begin with when no-one's making any money."
Those costs are based on estimates that six small growers, and 10 large
growers will apply for licences, and that only a third of those will
apply for renewals.
Those estimates were too low, which could explain why licensing fees
were so high, Mr Caddie said, as he'd already had interest from 50
potential cultivators.
People with a drug conviction are also unable to obtain a licence for
growing or manufacturing cannabis - although the clean slate legislation
applies, so convictions older than seven years won't stand.
Mr Caddie said that meant some people with expertise couldn't get involved and there should be ways around this.
"A cannabis conviction in some ways is a qualification for working in
the industry and I think there's probably ways for those who may not be
eligible under the current proposal to be enabled with support from
their community, if you got a justice of the peace or the local police
commander to vouch for them to say these are good people."
Chris Fowlie, chief executive of the medicinal cannabis research company
Zeacann, agreed the current fees were cost-prohibitive, and that
licensing rules on those with drug convictions were too strict.
He said the proposed legislation also prevented hemp farmers from selling their unused crops to medicinal companies.
"Instead, if they could just sell that to medical companies then it's a
win for hemp farmers, it keeps their business going with another source
of revenue and it's a win for the medical companies who get access to
cheap cannabis biomass that's very low strength but from that, they can
extract the medical compound."
But Ross Bell from the Drug Foundation said restrictions on who could
enter the market would help avoid a "gold rush" of medicinal cannabis.
"I don't think there's going to be such a massive industry that we could
expect five, six or seven major players in the industry. What we've
seen happen in Australia is that a lot of companies got quite excited
about the medical cannabis market and it hasn't generated a lot of
business for them."
Mr Bell said people shouldn't throw all their money at medicinal cannabis cultivation just yet.
Comments
Post a Comment