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Economic Effect From Marijuana Export

 Following legalization of marijuana consumption, Government of Georgia has decided to legalize medical marijuana production and exports  and reaping economic benefits.

Government of Georgia has already discussed the bill for cannabis cultivation and exports. At the Government meeting Prime Minister Mamuka Bakhtadze noted that government aims to neutralize marijuana-related risks. We may launch marijuana exports, but we should neutralize all risks  and prevent illegal turnover, Mamuka Bakhtadze said.

“We have analyzed risks and this plant must not be cultivated illegally. Therefore, we have taken decision to strictly control the whole process”, the Prime Minister said.

A special agency will be established for regulation of marijuana production process. According to Interior Minister Giorgi Gakharia, this agency will determine the licensing conditions, licensing tariffs and other procedures that are necessary for cannabis production.

“Various licenses will be issued for various activities – growing, production, processing and so on. This should be a strictly regulated business under its own regulator, where strictest and efficient control mechanisms will be absolutely transparent”, Gakharia said.

Under the new bill, marijuana consumption will be subjected to strict legal frameworks, namely:

  • Marijuana consumption will be restricted in public places, public transport, on the territory of public schools and educational facilities;
  • To protect underage children from harmful drug influrence, marijuana consumption will be banned for bodies under 21 years old;
  • At the same time, involvement of bodies under 21 years old in drug consumption will be subjected to criminal responsibility;
  • Marijuana consumption will be restricted in the process of fulfillment of official duties, both for public figures and private sector bodies;
  • The bill also strips people of certain professions of their rights to execute professional duties if they consume marijuana.
  • Sanctions will be tightened for popularization and advertising of drugs, including marijuana consumption.
  • Driving a vehicle under clinic influence of any narcotics, including marijuana, will be subjected to criminal responsibility.

Consequently, under the new bill, medical cannabis growing-production for exports will be subjected to strict legal regulations and this will be a licensed business. The independent agency will control the licensing and fulfillment process.

At the same time, severe financial sanctions and criminal responsibility will be applied against violation of license terms. To ensure competition in the cultivation-production process, the bill establishes various forms of licensing and these norms rule out that any company monopolize the whole production chain. The potential licensee legal company must scrupulously protect safety and other conditions so as regulations for medical cannabis cultivation-production for exports not contradict the international regulations, namely, the UN convention.

The Caucasus Business Week (CBW) has inquired what economic effect the country will receive from production and sales of marijuana.

Economic expert Akaki Tsomaia says that the global market of marijuana is huge and actually, this segment on the global market is beyond competition. This sector may be genuinely developed in Georgia, if it is not be monopolized and not only several persons receive benefits from it.

If the Government enables any interested business body to engage in this business without artificial obstacles, this process will bring real benefits to our economy, Akaki Tsomaia said.

At this stage, Georgia is in legislative vacuum. A lot of things depend on the parliament what kind of laws and regulations it will introduce, he said.

Irakli Chikava, director of Agro Solutions company, explains that it is difficult to say in advance what economic effects this business may bring to the country, because we do not know what kind of licensing norms will be introduced or what quotas will be determined. Anyway, the fact is that cannabis harvest from 1-hectare land plot is much more profitable thanks to its market value on the global market.

In response to the question whether the field specialist exist in the country, Chikava explained that marijuana, especially medical cannabis, needs agriculture specialist to precisely extract the planned CBD (substance that is applied for medical purposes) in the plant.

At this stage, it is difficult to find this type of knowledge in Georgia, however, the knowledge and experience may be imported from other countries. Our company has already sent request to partner countries and we have launched exploring the current situation of the labor market, he said.

‘Medical marijuana is becoming one of the in-demand products on the market, because its positive effect has been confirmed for healing various diseases. Consequently, entrance onto this market signifies involvement in huge competition and this process requires experienced specialists”, Chikava said.

Businessman Temur Chkonia talks about marijuana production in Georgia and its perspectives. This is a profitable business, because the demand for marijuana grows worldwide, he said.

In response to the question whether Georgia may become one of the marijuana production countries, Chkonia explains that the Authorities should control this business and finances, because in this case the country will receive huge profits.

The Government should also control that filbert and vineyards not be replaced by cannabis in regions, he said. “If we apply civilized forms in this business, like civilized countries, Georgia will become of the production countries”, Chkonia noted.

If we apply civilized forms, Georgia will have the reputation of a successful country for tourists, Chkonia noted.

“The Government may allow everybody to grow cannabis, while its sales may be carried out by a special state-established exports company and this will be a correct strategy, because this issue requires regulation. We remember times when everybody used to open supermarkets, then refueling stations and now hemp-growing will be popular. Everybody will care for a new source of revenues”, Chkonia noted.

The businessman explains that he has no interest in this field. “I has no desire to earn money from this field. I back the idea that our people find a new source of incomes, I do not approve this lifestyle”, Chkonia specified.

According to UN indicators, the USA is leader among the hemp-growing countries, as well as Morocco, Afghanistan, Mexico and others. The USA is leader in sales of marijuana: hemp-growing is legal for both medical and personal consumption in 9 states of the USA (Alaska, California, Colorado, Mein, Massachusetts, Nevada, Oregon, Vermont and Washington).

One of the analysts of the Wall Street writes in his report that in the next 10 years the legal marijuana market in the USA will rise by 17% to 47 billion USD and come up with strong drinks (58 billion USD). The first position belongs to beer industry (117 billion USD), cigarettes ranks second (77 billion USD) and winemaking is third with 65 billion USD.