JERSEY’s medicinal cannabis industry is still on course to become a “significant” part of the economy – having already generated around £60 million of investment in the Island – the Economic Development Minister has claimed.
Deputy Kirsten Morel said that local growers had contended with high start-up costs and strict regulatory standards, but that his department expected demand for medicinal cannabis to grow as more countries allowed for it to be prescribed.
In 2021, former Economic Development Minister – now Chief Minister – Lyndon Farnham predicted that the industry would start generating “meaningful returns” within five years and that it could become a “mainstay” of Jersey’s economy.
Deputy Morel said: “It is on course to become a significant part of the economy.
“The reason for that is because, ultimately, it’s creating a high-value crop which is in demand. We expect that demand to grow over the years, particularly as many more countries around the world allow medicinal cannabis prescription etc. So the long-term outlook is a good one.”
He explained that the large capital costs involved in starting a medicinal cannabis business – as well as high regulatory standards – were among the challenges faced by growers.
However, he estimated that there had been “about £60 million of direct inward investment” into the Island as a result of the licensed firms currently operating.
He added: “Even if you were to end the medicinal cannabis sector today, we would have had that £60 million investment into the Island.
“Building works, air conditioning, people, glasshouse supplies – things like that. So it’s already provided investment into the Island.”
He continued: “I imagine on the part of the companies, there’s been a lot of learning as they’re going – and also from the perspective of government. So I’m not surprised that, at the moment, we’re not seeing the full impact of revenue back into the Island from sales of cannabis – because we’re really only at the beginning of that.”
One local grower, Northern Leaf, recently revealed it had agreed a multi-million pound merger with Scottish CBD firm Voyager in a major deal to help ensure its “survival”.
The Jersey-based medicinal cannabis producer had previously warned shareholders that, if the merger was not completed in a timely manner, its board of directors would have had “no choice but consider ceasing to trade with immediate effect”.
Northern Leaf chair Frank Walker also previously stated that the company had experienced “a challenging time”.
Chief executive Geoff Eyre said: “There’s a lot of initial investment. The barriers to entry are very high from a capital perspective, from a regulatory perspective, and Northern Leaf has got over all of those hurdles now.
“We’re starting to see much more significant revenues coming through.”
The company, which is now valued at £3.7m, had invested £30m building a 100,000sq-ft cultivation and processing facility.
Mr Eyre continued: “Northern Leaf is very well placed now with the investment that’s gone into the company, in the facility, over the last few years.
“We’ve sold more just in the first couple of months of this year, than in the whole of last year – and are starting to sign long-term contracts.
“Diversifying the Jersey economy is very important.
“The cannabis industry can play a very prominent role in that, it’s just that with it being a regulated environment – it takes time.”
