Update Country Report Curaçao 16 Apr 2019

Recent moves by Canada and some US states to legalise marijuana for recreational as well as medicinal use have revived the legalisation debate across the Caribbean. As a significant producer of marijuana, several Caribbean countries are exploring the possibility of legalisation and decriminalisation, with a view to reaping the economic benefits. However, the ongoing UN ban on marijuana will remain a deterrent for now, especially given a lack of clarity around enforcement of international treaties and from individual countries such as the US.

The Caribbean (particularly Jamaica, the region's largest producer) is already a leading supplier of illegal marijuana to the global market. Until recently, the marijuana debate had focused on whether to crack down hard on production and supply, or to decriminalise the recreational use of small amounts and focus on disrupting larger networks.

However, a broader global trend towards legalisation of marijuana, mainly for medicinal use, has reframed the Caribbean debate and opened up the possibility that the illegal drug could become a legitimate revenue stream. The development of this trend was illustrated by a CARICOM declaration in mid-2018 that the regional association would review the current status of marijuana with a view to reclassification, indicating that it could consider a move towards legal regulation. The CARICOM statement emphasised that this would be a decision for each member state, suggesting that even a formal CARICOM reclassification of marijuana would not force a wholesale regional review.

Jamaica takes the lead

This shift in CARICOM's thinking may have been encouraged by Jamaica's initial moves to legalise and regulate the industry. In 2015, Jamaica relaxed its laws on personal possession for recreational use and also legalised the production of marijuana for medical purposes. The first business licences were granted in 2017 and in February 2019 the official distribution centre for the Caribbean Producers Jamaica Limited was opened at the Montego Bay Freeport.

Jamaica hopes that legalising medical marijuana will increase medical tourism to the country's private facilities and also position it as a global supplier to non-producing countries where medical marijuana use is permitted. The government hopes that this will boost revenue through taxing a product previously in the illegal market, while also encouraging illegal producers to move into the legal economy. There is also a security element to this rationale, since the Jamaican government hopes that criminal activity will fall as a result of lower illegal production and trade. Jamaica currently has one of the highest crime rates in the Caribbean, with the murder rate for 2018 at 47 murders per 100,000 inhabitants.

Other Caribbean countries are looking to follow Jamaica's example and diversify revenue streams. In January 2019, the US Virgin Islands legalised medical marijuana, following a trend within the US as well as the Caribbean. Medical marijuana is now legal in 32 US states under different conditions, as well as in several other US overseas territories. In addition, St Vincent and the Grenadines legalised medical marijuana in December 2018, with enabling legislation and regulation to follow. The Cayman Islands did so in 2016 for cannabis oil, although the island is not a primary producer, so largely imports from Canada at present, but could also import from some regional neighbours should the market take off.

The Bahamas is also debating legalisation, with advocates making the case that not to do so would be to miss out on a budding market-pointing to Jamaica as a potential main competitor. The Bahamas is keen to beat the rush, with Barbados also considering limited legalisation and Trinidad and Tobago having pledged to review its current marijuana legislation in 2019.

A clouded outlook

Despite the potential benefits of developing a medicinal marijuana industry, some challenges remain. In some countries, civil groups associate medicinal marijuana production with the illegal industry and are unwilling to legalise it in case it encourages recreational consumption. This stance may be backed by international law; most Caribbean states are party to UN treaties where marijuana is classified as a Schedule 1 drug. Although countries such as Uruguay, Canada and the US, which have partially legalised marijuana, remain party to these treaties, Caribbean islands may be concerned about potential criticism if they do the same.

Moreover, given the ongoing prohibition of marijuana at international level, Caribbean countries could face commercial consequences from developing a medicinal marijuana industry. For example, for de-risking reasons, financial institutions could choose not to bank companies producing medicinal marijuana, or even those in the supply chain, such as transport companies or suppliers of packaging. This would be particularly the case with international banks operating in the Caribbean, which could be headquartered in countries that do not permit medicinal marijuana. Even in the US, legalisation of medicinal marijuana has taken place at state level, but is still banned at federal level. US-based banks or even global banks operating in the US might, therefore, be wary of potential enforcement of the federal ban in future and related negative ramifications for any connection to marijuana supply chains in the Caribbean.

The medicinal marijuana industry is an income opportunity for many Caribbean islands, and developments in Uruguay, Canada and the US have enabled serious consideration of legalisation. However, many governments are likely to be cautious about the political and social consequences of legalisation and will watch the experiences of pioneer countries such as Jamaica to inform potential legalisation initiatives over the coming years. Given these challenges and uncertainty, it is likely to remain a relatively small and niche industry in the region, although the potential for growth of medicinal or recreational tourism is more likely.