By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s leader yesterday said his party “doesn’t buy” the Government’s explanation for why majority foreign ownership will be permitted in key sectors of a legalised medical marijuana industry.

Michael Pintard told Tribune Business that Bahamian majority ownership of all medical marijuana-related businesses should be mandated by law as the Free National Movement (FNM) pushed back against provisions in the Cannabis Bill that allow foreigners to control entities involved in manufacturing and packaging; analytical testing; and scientific research.

Earlier Prime Minister Philip Davis KC, in his contribution to the House of Assembly debate on the Bill and associated legislation, explained that the Government had sought to strike a balance between protecting and encouraging Bahamian entrepreneurs and the need for this nation to be competitive against rival jurisdictions and attract foreign direct investment (FDI).

“I said to you this foreign participation in this industry is limited [to] research and innovation, and not for the purposes of selling, marketing and distribution. That’s clear. It [the Bill] says 100 percent Bahamian,” Mr Davis said in replying to Mr Pintard during the House debate. Questioned by the Opposition leader, he then confirmed that foreign participation in medical marijuana manufacturing and packaging is also allowed.

The Cannabis Bill, which was still being debated by MPs as Tribune Business went to press last night, permits foreign investors to own up to a maximum 70 percent of medical marijuana manufacturing and packaging; analytical testing; and scientific research businesses. Bahamians, though, must own a minimum 30 percent equity interest in such ventures.

Mr Davis and other Cabinet ministers yesterday pointed out that the 30 percent threshold represents a floor, rather than the ceiling, and Bahamians can own a greater proportion of the equity in such entities. The Bill also stipulates that 100 percent Bahamian ownership is mandatory for entities involved in medical marijuana cultivation/harvesting; sales and cannabis dispensaries; distribution; and transport.

“Yes, a foreigner could participate in manufacturing,” Mr Davis clarified, adding that the Bahamian and foreign ownership percentages were consistent with rival jurisdictions. “The threshold of 30 percent was benchmarked with the region, and you will find most of the region permits foreign participation to a maximum 70 percent, and so to remain competitive, I’m now reminded that is why it is 30 percent,” he added.

“Bahamians are not excluded from manufacturing. If a foreigner comes in, it will be at the discretion of the Government to decide whether to let them in, and they’ll be coming in with something Bahamians cannot offer or the capital will be such that a Bahamians does not wish to invest.

“Bahamians are not excluded. In fact, we may not attract any foreigner. Bahamians are allowed to manufacture. We are minded to be a competitive jurisdiction in this space. We benchmarked that against what others are doing, and we will be be guided by Bahamian interests first.”

However, the Prime Minister’s pledge to protect and encourage Bahamian entrepreneurs and investors did not impress Mr Pintard. Asked whether Mr Davis’ remarks on the Bahamian and foreign ownership splits were reassuring, he replied: “Not at all.”

The Opposition leader also suggested there were insufficient safeguards to prevent “big players” in other areas of the Bahamian economy from leveraging their wealth and financial muscle to dominate a medical marijuana industry.

He argued that the Government should focus on protecting small entrepreneurs, and creating “a broader cross-section” of Bahamian ownership, rather than allowing existing operators to repeat the “dominance” they have achieved in other sectors.

“We believe, again, that Bahamians ought to be the principal owners,” Mr Pintard told Tribune Business. “The majority of shares should be held by Bahamians who, if they desire, can enter into a joint venture with a foreigner who has a minority position.”

He contrasted the Government’s approach to how it legalised, regulated and taxed the domestic gaming industry some ten years ago. “They liberalised the gaming sector and never considered that we needed to open it to foreigners to come into that space,” he added.

“Bahamians showed they were capable of competently operating in this space. You’re telling me Bahamians cannot operate competently in the cannabis space? We do not buy that. They can, and attract the money necessary for the licence.”

Mr Pintard said facilitating foreign investors to “dominate certain segments of this market”, just as it is being liberalised and views on the use of medical marijuana change, was especially galling for the “thousands of Bahamians” who have gained criminal records for possessing small amounts of marijuana for personal use.

And he questioned whether the Government has paid sufficient attention to preventing the medical marijuana industry from being dominated by a small number of wealthy Bahamian operators, as has occurred in other sectors where the same names do all the deals.

“There are concerns about big players, who dominate other sectors in the country, getting all types of licences as opposed to limiting their dominance in this sector so as to create a greater shareholder society with a wide cross-section of owners,” Mr Pintard warned.

“You issue the permits to the same persons who dominate other sectors to dominate this sector, instead of creating a broader cross-section of Bahamians who traditionally would not have the opportunity to own a piece of the rock. The Government should be more intentional about people who have traditionally been disenfranchised and calling publicly for more ownership opportunities.”

Shanendon Cartwright, the Opposition’s deputy leader, echoed his leader’s concerns during the House of Assembly debate. “The issue of foreign ownership, Mr deputy speaker, we are quite concerned about this section [in the Bill] that has Bahamian ownership at 30 percent,” he asserted.

“We believe why not 100 percent, and if not 100 percent, surely the foreigner should have a minority interest, not the Bahamian people. You can get exemptions and so forth... Why would you put a foreigner in a better position in this industry than Bahamians? We have concerns about that, Mr deputy speaker.”

Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, reiterated that the “30 percent” benchmark was a “minimum threshold” that sets a floor below which Bahamian ownership of medical marijuana venture cannot fall.

Pointing out that this is not a floor, or ceiling, he added: “So the public is not misled, it permits a minimum of 30 percent for Bahamians. It could be 40 percent, 50 percent, 60 percent, 70 percent. Its sets a minimum threshold.”

Yet an unconvinced Mr Cartwright repeated: “What we are saying is the foreigner should consistently be in the minority. That’s all we are saying. I paid close attention to the member for Tall Pines [health and wellness minister, Dr Michael Darville]. The presentation as a whole, I paid close attention.

“It’s just this aspect of a multi-million industry, a multi-million industry, lucrative, Mr deputy speaker. When it comes to a multi-million industry and how lucrative it is, Bahamians are right to ask why aren’t they in the majority and why can’t foreigners consistently be in the minority, consistently in the minority, Mr deputy speaker?”

Mr Davis, in his debate contribution, said the creation of a medical marijuana industry will “open the door to the creation of thousands of jobs” in multiple industries via the economic diversification stimulated by multiple spin-off opportunities.

“Before us is a new economic reality in which cannabis has the potential to play a large role in our economy,” the Prime Minister said. “The impact of the cannabis industry will be widespread, affecting many different sectors.

“By legalising cannabis for medical use, we are also legalising the many supporting inputs that are necessary for the industry. We have opened the door to the creation of thousands of jobs in agriculture, manufacturing, retail and dispensary facilities, and healthcare. This industry will make a significant contribution to our efforts to diversify our economy through these sub-sectors.

“We have created the potential for new Bahamian cannabis entrepreneurs, and we’ve also created the framework to attract external investors who will drive capital into this new industry to spur growth and expand our economy,” Mr Davis added.

“Opportunities to export our fully regulated, high-quality product will give our local businesses and farmers access to expanded markets beyond our borders. Most importantly, we will make room for small and medium-sized Bahamian-owned businesses to have access to opportunities within this industry by ensuring equitable access for businesses of all sizes.”

Addressing the ownership issue, Mr Davis added: “The requirements for eligibility for the licences are fully outlined. Among these requirements is a very important requirement for Bahamian ownership. If an entity is applying for a licence to cultivate, sell or transport cannabis, that entity must be 100 percent Bahamian-owned.

“We also recognise the need to attract investors who may be looking for a well-regulated jurisdiction to conduct research. However, it is critical that Bahamians are also involved in research and development. For entities applying for a licence for analytical testing, manufacturing or research, they must be at least 30 percent Bahamian-owned.

“We know how important it is for Bahamians to own this new industry. In fact, there should be no new industries developed in this country that don’t seek to empower Bahamians as owners. The cannabis industry will further establish this standard as a new industry with Bahamian ownership at every level.”