Days after Bermuda’s Attorney-General and Minister of Legal Affairs unveiled legalization plans, the conversation in the island has already pivoted to economic empowerment, an expansion of its medical cannabis system, and how limited banking options would impact investors in the industry.
On Saturday, days after a draft bill to legalize cannabis for adult use was released for public input, Kathy Lynn Simmons, the British Overseas Territory’s chief legislative official, told members of the public that conversations on the banking issue have already been initiated with banks and stakeholders and that a practical solution for investors is in the works.
As in the United States, commercial banks in the Caribbean have generally refused to offer services to businesses in the cannabis industry, in fear of violating US federal laws, under which cannabis remains illegal. These banks depend heavily on correspondent banking relationships in North America, and attempts to maintain those relationships by following US federal law has already jeopardized access to foreign investment.
Banking, one of several priorities detailed by Lynn Simmons, will be a critical part of the Government of Bermuda’s pitch to investors as it moves to develop its niche in the cannabis industry.
Overall, she said, steps are being taken so that Bermudians would be allowed to participate in a “regulated cannabis scheme” that provides for adult-use, and that boosts the island’s economy with domestic cultivation and processing opportunities around the plant.
“I really felt that we weren’t hitting the mark when it came to the economic opportunities that we hoped to afford our citizens,” Lynn Simmons said during Saturday’s town hall, referencing initial efforts around the legalization of medical cannabis.
“What we are now trying to do is encourage people to look at the plant differently,” she added. “I can say that the energy that has been generated in the country by this proposal is immense and it speaks to the lack of economy which the average person has been able to engage in.”
Under the proposed legislation, released last Wednesday, anyone aged 21 or older would be permitted to possess and purchase up to seven grams of cannabis from retailers approved by the proposed Cannabis Advisory Authority.
The Authority would govern the granting of licenses for cultivation, retail, research, import, export, transportation and manufacturing. The industry will likely start with imports, according to Lynn Simmons, however, there are plans to boost domestic cultivation within a set period to move toward export.
Individuals convicted of possessing under seven grams of cannabis will be able to be granted licenses, and they will also be eligible to have their criminal records expunged. There are plans to widen the scope of the reform after an initial period of assessment.
The government’s expectations in the area of banking services, Lynn Simmons explained in the town hall, is that Bermudan banks will be unencumbered by federal laws in the United States that have left banks reluctant to serve cannabis businesses because of the threat of federal reprimand.
One of the banking solutions proposed in Bermuda is similar to “a cashless model” being piloted for the country’s budding casino gaming industry, which local officials hope will, like cannabis, boost the domestic economy. The cashless system, in short, would allow for vouchers to be used at select establishments.
The proposal for casino gaming has already been resolved, the country’s Premier David Burt said at a press conference on Thursday, and banks “are comfortable around the issue of compliance.”
In November, the Bermuda Monetary Authority lifted restrictions on the registering of offshore cannabis-related investment funds, so long as the conduct of the cannabis business is legal at all levels within the country in which it operates. Should local banks feel comfortable with the “cashless” proposal in the context of cannabis, these efforts will clear the way for capital to be made available to Bermuda’s legal cannabis industry.
“I would like to think at this stage in our development the banks would be as supportive of the economic activity in the country as the Government is,” Lynn Simmons said, referencing the adult use cannabis bill. “In any economic system going forward, we are looking for the banks to be equal partners with us in ensuring that this scheme comes to fruition to benefit the people of Bermuda.”
The public comment period on the bill closes in July. Lynn Simmons said the government is encouraging contributions from citizens because it is important for the public expectations for the industry to be matched with public health and social concerns.