The STAR Businessweek - Mexico, Caribbean Alliance? by STAR Publishing

THE STAR Businessweek August 11, 2018

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Will Mexico deepen Caribbean alliance in Trump’s era?

Mexico has elected a new president Andrés Manuel López Obrador (nicknamed AMLO). The leader of the left-wing National Regeneration Movement political party, who was previously a presidential candidate in 2006 and 2012, promises to bring a new surge of momentum to Latin America’s second largest nation. By Ed Kennedy, STAR Businessweek Correspondent Continued on page 4

Fears of Venezuela crackdown after drone attack Opponents of Venezuela’s embattled president Nicolás Maduro are braced for a government crackdown following what appears to have been an attempt to assassinate him over the weekend using two drones packed with explosives Pages 3

Nicaragua’s $13bn economy sinks as uprising persists Just three months ago, one Nicaraguan businessman was in the final throes of negotiating a $2m loan Page 7

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Bankers without Borders

Banking has gone global, but what does this mean for the Caribbean? By Catherine Morris, STAR Businessweek Correspondent

The STAR Businessweek BY Christian Wayne – Editor at Large

Declinism is the tendency for individuals to view the past favourably and to look at the future negatively. It turns out, humans are actually pre-wired to think this way— we’re predispositioned. I’d like to think that this cognitive bias is the reason older generations tend to remember the 70s as such a magical period and this one as lacklustre, but that may just be my bias blind spot showing (the tendency to identify more cognitive biases in others than in oneself)! Bias or no bias, it’s difficult to look at the geopolitical horizon of the present day as anything but utterly chaotic—and don’t think our neighbourhood is any different. Colombia and Venezuela’s relationship is fraying day by day, with chances of a confrontation rising since the recent drone attack in Venezuela last week. See the Financial Times article by Gideon Long on page 3. Nicaragua is battling with deep internal conflict being sown by what appears to be yet another guerrilla fighter turned despot gripping onto power well beyond his political sell-by date. Read the FT’s Nicaragua piece on page 7. Further north, Mexico is undergoing its own political transformation . . . well, so says the country’s president-elect. For more on what the Caribbean can expect from new Mexican leadership, see “Will Mexico deepen Caribbean alliance in Trump’s era?” starting on page 1. It’s Nothing Personal. It’s Business. Stay connected with us at: Web: www.stluciastar.com Social: www.facebook.com/stluciastar Email: starbusinessweek@stluciastar.com

According to FinTech Compliance, a UK FinTech consultancy, FinTech was a £4.5billion industry in the United States alone.

n the years before the worldwide financial crisis, banking became global. Financial institutions began to dissolve national borders and make connections across continents. Then came the collapse. As the world struggled to regain its financial equilibrium, blame fell on bankers, with many accusing the international system of spreading the chaos around the globe. International banking took a reputational hit and its upwards trajectory stalled. A decade later, it’s time for a revival. Despite the risks, international banking has a significant role to play in increasing capital, boosting liquidity and encouraging technological innovation. It can be a driver of economic growth and a weapon against poverty, provided it operates within a policy framework that works to maintain financial stability. Caribbean nations have long been aware of the perks and pitfalls of dealing with global bankers. In the wake of the financial crisis, many international operators chose to scale back their operations and this de-risking led to an exodus from offshore hubs seen as potential

liabilities. But while it may have faltered, the sector remains strong. In 2013, almost 50% of banks in Latin America and the Caribbean were foreign institutions. In order to leverage the benefits of global banking, it’s important that the Caribbean stays ahead of developments in the sector. According to the World Bank Group’s Global Financial Development Report 2017/2018, international banking will be shaped by three major trends in the near future: advances in technology, South-South banking and the use of alternative sources of funds.

FinTech

Whether through crypo-currencies, data protection, mobile banking or e-commerce, FinTech (financial technology) is revolutionising the global banking landscape. Large global banks with the resources to invest heavily in research and development will be the ones to watch in this important area. As the sector grows, FinTech firms and financial institutions are developing profitable partnerships that allow the latter to extend their reach all over the world.

FinTech is helping banks reach a sector of the population that has been underserved, and encouraging competition by pushing bankers to introduce ever more efficient, and flexible, services. Getting ahead of the curve on FinTech will make Caribbean nations more attractive for foreign banks as they seek to do more digital business. The pace of change in this rapidlyevolving area, however, is such that regulators are struggling to keep up. As this niche develops, policymakers will have to focus on areas such as customer education, data security and discriminatory lending, while bearing in mind that too much regulation risks stifling the market. Balancing innovation with regulation requires a light touch, which has led some countries to develop a ‘FinTech sandbox’. This allows for FinTech services to go live with limited regulation in a controlled situation so that regulators and firms can troubleshoot potential problems.

South-South banking

South-South banking refers to transactions between developing countries. It’s an area of particular interest to the Caribbean, given its de-risking challenges. As banks from the north regroup and retrench, opportunities lie elsewhere leading to a more regional focus. This regionalization could prove key for the Caribbean. Co-operating to develop regional regulation and share expertise would lead to a more united Caribbean, and a united front would in turn give the region greater political and economic power when negotiating with global groups such as the Organisation of Economic Co-operation and Development, and the G20. At the customer level, South-South banking can provide a more tailored level of care. Using a bank that, while foreign, still has the necessary regional knowledge can help clients feel more at ease. Given that most businesses in the Caribbean are small or micro-sized enterprises, this customised level of care is particularly appropriate. With developing country banks investing within their region, either through crossborder transactions or creating a bricks Continued on page 5

Venezuela

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Fears of Venezuela crackdown after drone attack Government vows more arrests after apparent assassination attempt on Maduro By Gideon Long, FT Andean Correspondent

pponents of Venezuela’s embattled president Nicolás Maduro are braced for a government crackdown following what appears to have been an attempt to assassinate him over the weekend using two drones packed with explosives. The government said it had arrested six people following the bizarre incident and vowed to detain more. Primero Justicia, one of Venezuela’s biggest opposition parties, urged the government to refrain from using the incident as propaganda that could prompt “the security forces to continue persecuting the democratic opposition and violating political rights”. Dimitris Pantoulas, a political analyst in Caracas, said he was “deeply concerned” the incident could prompt “a witch hunt” against the opposition, and cited the example of Turkey, where the government of Recep Tayyip Erdogan arrested thousands of opposition activists after a failed coup in 2016. “The most serious consequence of this attack is that it pushes the country into a new cycle of instability,” he said. The circumstances surrounding Saturday’s apparent attack remain confused. Mr Maduro was addressing a parade in Caracas to mark the 81st anniversary of the creation of the National Guard when television footage showed him and his wife flinching and looking upwards after what appeared to be an explosion. Hundreds of uniformed

Security personnel surround Venezuela’s president Nicolas Maduro after an apparent assassination attempt on the weekend © Xinhua/AP

officers broke ranks and scattered before the broadcast signal was cut. Speaking later, Mr Maduro said one drone had exploded in mid-air in front of him before a second went off to his right. His interior minister Néstor Reverol said the second drone crashed into a building, dropped to the ground and exploded. The government said seven National Guard members were injured, three seriously. Mr Maduro blamed the assault on “the Venezuelan far-right in alliance with the Colombian far-right”. “The name of [Colombian President] Juan Manuel Santos is behind this attack,” he said. “The first elements of our investigation point to Bogotá.” The Colombian government dismissed the claim as “absurd”.

In a news conference on Monday, Venezuela’s attorney-general Tarek William Saab said investigators had identified the perpetrators of the attack and established their links to overseas opponents of the government, without giving details. A little-known Venezuelan group called Soldados de Franelas (T-shirt Soldiers) claimed responsibility for the attack, saying its drones packed with C4 explosive had been shot down by government snipers. “We showed they are vulnerable,” the group said on Twitter. “The objective wasn’t achieved today but it’s only a matter of time.” The claim could not be independently verified.

Meanwhile, video footage surfaced on social media allegedly showing one of the drones exploding in mid-air. “It is hard to say whether this footage is authentic as there seems to be no way to tie it to the location of the event,” said Haye Kesteloo, editor in chief of DroneDJ, a specialist website. “Also, the exploding drone vanishes in a big cloud of smoke and no parts can be seen falling down from the sky.” Foro Penal (Penal Forum), a human rights group in Caracas, said on Monday a handful of opposition sympathisers had been arrested since the incident and they expected more to follow. “We’re worried there will be really severe repression, especially against the military or people with links to the military,” the group’s vice-president Gonzalo Himiob said. Several observers said that regardless of who carried out the attack — and how they did it — it suggested weaknesses in the Maduro security apparatus. “The images of vulnerability of Maduro and his entourage shown on national television stood in stark contrast to the impression of force and invincibility that authoritarian governments strive to convey,” said Francisco Rodríguez, a Venezuelan economist and opponent of the Maduro government. “Seeing trained soldiers fleeing in apparent panic and disarray before an explosion strongly contrasts with the idea of monolithic control and loyalty of security forces that Maduro prides himself on.”

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Andrés Manuel López Obrador, often abbreviated as AMLO, remains President-elect of Mexico until his inauguration as President on December 1, 2018

Will Mexico deepen Caribbean alliance in Trump’s era? Continued from page 1

With the relationship with the United States looking unsteady, and Brazil (Latin America’s largest nation) remaining embattled with domestic issues despite its confident forecast in recent months of economic growth, Mexico has a new president in a time when it is increasingly looking for a new identity. Just like many nations in the Caribbean are. So, what does the election of AMLO mean for Mexico’s future relations throughout the New World? And will he be a friend or rival to our collection of nations in the Caribbean?

The Domestic Battle

AMLO’s election follows turbulent years in Mexico. There has been the ongoing issue

of cartel violence that continues to embattle and dispirit the Mexican people. There has also been the ongoing issue of poverty; for while Mexico recorded an annual GDP of over US$1 trillion in 2016 and less than 2% of the nation lives in poverty, around 33% live in moderate poverty. Whatever the percentage and whatever the definition, the shared desire for Mexico to achieve real and substantial progress is a nationwide aspiration. AMLO has promised a “radical transformation” and to “eradicate corruption”. Both are lofty goals, and the ambitions of AMLO are interwoven by the Mexican people’s apparent readiness for change, but the reality of the political structure remains.

Mexican presidents are elected to a single six-year term. While this means that anybody who doesn’t like the president won’t have to endure that person for another term, it also removes the possibility of longstanding change. Plus it can undermine the capacity of the president to govern, given other leaders know they only have to wait the president out if they don’t agree with policies, and not worry about the individual renewing their mandate at the next election.

The North American Dispute

Then there is the relationship with the US. Mexico is a big nation: 130 million Mexicans and the 15th biggest economy

in the world by GDP. It just so happens to also reside beneath the world’s most powerful country. It’s why its economic and political fortunes are often so closely tied with Washington’s actions, and these go beyond Trump’s promise “to build a wall and make Mexico pay for it”. This is no derision on the Mexican people. For while the Trump team may not readily admit it, a decent (if not strong) relationship with Mexico is essential to the US too. Instead it’s an explanation for why many in the Caribbean and further afield may at first look past Mexico as a trading partner; but also why they should really look again. Especially now, in an era when the ‘old certainties’ surrounding international trade — like Washington’s pro-free trade policy and Beijing’s desire to focus on economic growth over territorial spats — have been replaced by turbulence. Just as Mexico City recognises that Donald Trump in the White House could change NAFTA, so too do nations throughout Latin America see a country looking at its region in a new era with new interest. Even so, with AMLO there is a clear break from recent political form, leaving many to wonder whether AMLO will be Mexico’s Trump-like figure, for all the unpredictability it brings. AMLO is a man of his times. It’s clear that the language from Washington, alongside the frustration with the liberal order seen with Trump’s election, shows people are hungry for someone who offers a truly new approach. For its part, irrespective of NAFTA, the Mexican nation recognises the future of its economy will require greater diversification. AMLO seems well positioned to drive this forward. The issue is whether that new approach will be a good one.

Mexico and the Caribbean

Most worrying for regional observers will be AMLO’s apparent tendency to authoritarianism. Different nations have different traditions and perceptions in their democracy, and this can impact governing styles. Yet nobody has ever said there is simply too much democracy and human rights around the world. Within Latin America, a leader who advocates for these values would be highly

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Bankers without Borders Continued from page 2

and mortar operation, the profit, skills and knowledge generated stays within the region. The benefits, however, must be weighed against the drawbacks. Greater South-South banking limits the exposure of those in the sector to more advanced technology and expertise which may curtail growth in the sector over the long-term.

Alternative funding

Will Mexico City be called on to advocate prudence as Colombian and Venezuelan tensions continue to rise over immigration and security issues?

desired right now, especially one willing to renew the value of these institutions, even if citizens are frustrated and fatigued by their application. AMLO’s entrance onto the scene also comes at a time of high tensions. Relations between Venezuela and Colombia are not good. The last week has seen an apparent assassination attempt of the Venezuelan president, and while it’s not clear who is behind the attack, Maduro’s supporters have been quick to lay the blame at the feet of ‘right wing activists’. As a leftist leader who can speak the language of Venezuela’s political ethos, AMLO’s role here as a peacemaker could be vital, but the worry exists he may inflame tensions. Economically, much of Mexico’s relations around the Caribbean will now be subject to a reset. That said, strong inroads have been made in recent years across a number of fronts. The essence of these is likely to continue from one president to the next. From hosting a summit of CARICOM’s leaders in Mexico City during 2000, to the establishment of a Mexican embassy at CARICOM’s headquarters in Guyana in 2009, to the general pre-Trump trend of

globalisation, AMLO’s predecessor Enrique Peña Nieto crisscrossed Latin America regularly for the Summit of the Americas and the Pacific Alliance Summit, forging stronger ties and new trade agreements. On a one-to-one level, Mexico has also been busy. In Saint Lucia, shared work in education and artisan training have been welcome complements on top of deepening partnerships in agriculture, sustainability and security, with Prime Minister Chastanet hosting Mexico’s foreign minister Luis Videgaray Caso in March of this year for bilateral talks on Saint Lucian soil. Mexico’s engagement with Saint Lucia has been mirrored in other nations around the region.

Certainty and Volatility

While presidents may change, strong ties like those built by Mexico should endure, even if AMLO is a break from most recent presidents, but this is far from certain. Anyone who believes a new president would drop his robust campaign rhetoric and ‘normalise’ once in office, need only look at the leader north of the Mexican border to know sometimes it carries over, with all the volatility to follow.

The 2008 financial crisis showed just how important it is to have a buffer for the markets, in the form of alternative sources of funding. After the crash, wary firms began substituting crossborder bank credit with capital market funding as a way to offset the damage. Taking a holistic view of the global financial system allows firms to cushion themselves against risk through a mix of bonds, stocks and international loans. This would suggest a decline in bank funding and therefore a contraction with global banking. However, there is still a segment of smaller firms which don’t have access to capital markets, or are intimidated by diversifying in this way. For those small-scale operators, banking will always remain their preferred first choice.

World Bank Group Director of Research Asli Demirgüç-Kun

Balancing risk with benefit

Global banking brings benefits, but also risk. The former can only be maximised with the proper regulatory environment and adequate infrastructure. A welcoming host country with effective institutional support and supervision can encourage foreign banks to develop hubs, making it less likely that they will retrench when times get tough. And as foreign entities diversify and expand, they not only contribute to the host economy, but encourage competition within the domestic sector. In introducing the Global Financial Development Report, World Bank Group Director of Research Asli DemirgüçKunt said: “International

bank lending remains a vital source of finance for developing countries, although its composition has been changing since the crisis. International banking activities have the potential to improve the degree of competition in the local banking sector, help upgrade skills, and improve the efficiency of resource allocation. Through threat of exit, international banking can also discipline domestic financial policies, regulations and supervisory practices and weaken the political entrenchment between domestic financial institutions and governments. “Hence remaining open despite rising protectionism is essential for countries to continue to benefit from global flows of funds, knowledge, and opportunity.”

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North American Companies Cruising the Caribbean for Sunny Cannabis Growth Opportunities By Baystreet Canada

he legal cannabis waves are beginning to hit the shores of the Caribbean, as the region’s nations anticipate a potential economic boom. Buoyed by an already fruitful touristdriven economy, Caribbean countries such as Jamaica, Barbados, the Bahamas and Colombia are already making moves towards lifting prohibition to better serve their tourists’ desires. At a recent meeting of the Caribbean Community (CARICOM), the 19-member organisation of island nations discussed a new report recommending that all member nations “review marijuana’s current status with a view to reclassification”. The movements being made by both CARICOM and Latin American countries have not been lost on some of the cannabis industry’s biggest players. Recently several North American companies have begun making moves into the region, as cultivators, extractors and sellers, including Aphria Inc., Canopy Growth Inc., GSRX Industries Inc. and CROP Infrastructure Corp. When the leading cannabis player in the

Counting both legal and black market sales in the US alone, the total demand for pot is approximately $52.5 billion, Marijuana Business Daily found

world, Canopy Growth, announced its entry into Colombia, it was quickly followed by others wanting into the Caribbean region. Canopy’s Caribbean tour was soon followed by Aphria’s entry into Jamaica. By the end of July the two were joined by CROP Infrastructure, who also brought their footprint onto Jamaican soil through a strategic joint venture agreement.

OPPORTUNITIES ABOUND IN THE REGION

Back in June, US expert Brian Staffa, a chief strategist at the cannabis consulting company BSC Group, promoted the idea of Caribbean countries chasing the potential for cannabis industry to officials attending Caribbean Week in New York. Staffa made a strong case for these countries to strategically set up their regulatory and taxation regimes in a way that doesn’t cause growers and sellers to shy away, nor leave open the door for the black market. Continued on page 8

The Saint Lucia Government Gazette Company Registration Name: Winmedia Group Inc.

Name: Everest Construction and Maintenance Ltd.

Description: Digital advertising

Description: Construction

and marketing services

Directors: Mavin Florton

Directors: Pablo Rosine; Lorraine Glace

Date Incorporated: 24-Jul-18

Date Incorporated: 13-Jul-18 Chamber: Lorriane Debra Glace Chambers, Saint Lucia Name: Golden Taste Inc. Description: Restaurants

Chamber: Brickstone Law Chambers, Saint Lucia

Name: Cost Cutters Inc. Description: Online retail store Directors: Barrington Dolcie

Directors: Wilfreda Altenor; Vincent Lord

Date Incorporated: 24-Jul-18

Date Incorporated: 18-Jul-18

Chamber: SEDU, Saint Lucia

Chamber: Veronica Barnard Chambers, Saint Lucia Name: Builtec Inc. Name: Newtech Construction Inc.

Description: Construction

Directors: Keith Pierre

Directors: Henderson Leo; Brenda Leo Date Incorporated: 18-Jul-18 Chamber: SEDU, Saint Lucia Name: Terrazzo & Construction Services Inc. Description: Industrial cleaning

Date Incorporated: 24-Jul-18 Chamber: Self-incorporation

Name: Aviation Management Group Inc. Description: General aviation services

Directors: Jermain Joseph;

Directors: Mario Reyes

Ronald Emmanus

Date Incorporated: 25-Jul-18

Date Incorporated: 18-Jul-18

Chamber: Peter I. Foster & Associates Chambers,

Chamber: Goddard-Dorville Chambers, Saint Lucia

Saint Lucia

Nicaragua

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Nicaragua’s $13bn economy sinks as uprising persists Climate of fear drains banking system and collapse of tourism hinders growth By Jude Webber, FT Mexico and Central America Correspondent

ust three months ago, one Nicaraguan businessman was in the final throes of negotiating a $2m loan. Then, he had been expecting to pay 7 per cent interest — now local banks want 11.5-12 per cent. At the same time, his business is bleeding money. In one area, food distribution, sales are down two-thirds from last year, he said. One hundred days into an uprising against the regime of President Daniel Ortega, Nicaragua’s $13bn economy is sinking. Violence and chaos have subsumed business and tourism activity. An average of $7m a day is flooding out of the banking system. Tourism has collapsed. The economy could swing from growth of nearly 5 per cent in 2017 to a contraction of almost 6 per cent this year. Despite as many as 448 deaths since protests began on April 18, Mr Ortega, a former machine gun-toting Marxist revolutionary who helped topple dictator Anastasio Somoza in 1979, has resisted economic and diplomatic pressure to quit or call early elections. “I’m not betting on a swift solution,” said Mario Arana, a former central bank president and finance minister who now heads the Association of Nicaraguan Exporters. “I’m betting Daniel will resist and we’ll either be headed for a civil war, a financial crisis or some kind of social explosion that would call on the army to be part of the solution.” A semblance of normality returned after security forces broke up roadblocks that protesters had erected across the country, and officials were hoping the worst was over. But a string of rare television interviews by “Comandante Daniel” in which he blamed coup-mongers for the crisis and denied government atrocities, underscores just how abnormal the situation remains, locals say. Gone is the pragmatic relationship with the private sector that Mr Ortega, who first led Nicaragua from 1979-90, had enjoyed since returning to power in 2007, and which paid him back with an economic boom. Instead, a climate of fear persists. Masked paramilitaries have cracked

Mr Ortega told CNN he was open to UN involvement in dialogue and possibly a referendum on whether he should stay © Reuters

down on peaceful protests. Many bars, restaurants and shops only operate by day. At night, terrified locals keep an informal curfew for fear of falling prey to ruthless gunmen, like those who shot dead a Brazilian medical student last week at 11pm or besieged students in a church. Remittances, a main source of cash, rose 9 per cent to $725m in the first half. But fear and uncertainty is weighing on investment, and tax revenues are expected to take a hit. “Consumers are concentrating spending on food, medicine, fuel and cell phones,” said Néstor Avendaño, an independent economist who, like other analysts, claims the government is only publishing some data to hide the full impact. “It’s very difficult [for the government] to stay afloat.” Mr Ortega and his wife and vice-president Rosario Murillo, who had been seen as a likely successor in elections due in 2021, have lost a decade-old oil and aid lifeline from socialist ally Venezuela, which dried up last year as Caracas’s own crisis spiralled. That leaves them heavily reliant on multilateral lenders and foreign investors who appear to be slamming on the brakes. The US Senate is also studying a bill that could block multilateral loans to Nicaragua, known as the Nica Act. The Inter-American Development Bank,

which has a $624m loan portfolio in Nicaragua, said “the situation over the past months has delayed execution and corresponding disbursements of several projects”. As Nicaragua recognises Taiwan, China offers no avenues of aid. Nicaragua’s overall debt is low, with most having been condoned by the World Bank’s heavily indebted poor countries initiative. However, Mr Arana estimated this year’s budget deficit could be more than double the initial forecast of 1.5 per cent — some $1.3bn. He said he had heard about a month ago that the government was sounding out brokerages about the possibility of issuing $300m in domestic and international debt. But mounting pressure from the Organisation of American States — Washington said three senior Nicaraguan officials sanctioned under the Global Magnitsky Act “are a start, not an end” of potential sanctions — might make this unlikely. Alternatively, the Nicaraguan government could try to tap central bank reserves, now at $2.5bn, or halt repayments on Venezuelan loans, analysts said.

But Mr Arana said the real concern was a run on the financial system that could push the government into applying capital controls or a “catastrophic” devaluation of the córdoba currency. Foreign direct investment, which stood at $897m last year, is expected to plummet. “No credit, no investment, no tourism, job losses and income falling dramatically — this should force the government to seek a political settlement,” said José Adán Aguerri, head of business lobby Cosep. “Without a political agreement, there’s no way the economy can recover,” he added. Past dialogue attempts, brokered by the church, have collapsed. Government-sponsored land grabs have been seen as an attempt to pressure critics. In an interview with CNN, Mr Ortega opened the door to UN involvement in dialogue and possibly a referendum on whether he should stay. Juan Sebastián Chamorro, executive director of the Nicaraguan Foundation for Economic Development think-tank, said: “We are in uncharted territory.”

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North American Companies Cruising the Caribbean for Sunny Cannabis Growth Opportunities Continued from page 6

“The big thing is (to) be very cognizant of what the market will bear in your region, and perhaps take note of what black market pricing is, because your ultimate goal is to stamp out that black market — get everybody onto the regulated side because it is much safer, and it is much more beneficial to the local economy,” said Staffa. He pointed towards Colorado’s successes, where during 2017, the state took in USD $247 million in taxes and fees. The state has a population of over 5.6 million, which is nearly double that of a country like Jamaica, which has a population of just under 2.9 million, but also has an annual tourism boost of 3 million visitors. An injection of tax revenues like that of Colorado’s would be incredibly beneficial to the numerous Caribbean nations considering lifting prohibition.

RECENT CARIBBEAN CANNABIS DEVELOPMENT

Ontario-based Aphria made a serious push into the Caribbean and into South America in July, by announcing business plans in both Colombia and Jamaica. Through an acquisition of a minor competitor’s subsidiary, Aphria began to establish its presence in Colombia and several other countries. The company’s Colombian operation will be anchored by Colcanna SAS, which holds cultivation and manufacturer’s licenses to produce medicinal extracts from cannabis, including oil for domestic use and for export. In Jamaica, Aphria now takes control of Marigold Projects Jamaica Ltd., which also holds several licenses to cultivate, process, and sell cannabis products and services for therapeutic, medical, and scientific purposes. Near the beginning of July, cannabis giant Canopy Growth made waves through a potential plan that could cost more than USD $150 million in order to target Latin America’s emerging medical marijuana market. Through a deal that could be worth up to approximately USD $96 million

Workers produce medical marijuana at Canopy Growth Corporation’s Tweed facility in Smiths Falls, Ont. The company just won a bid to operate retail cannabis stores in Manitoba

in Canopy stock, the company acquired Spectrum Cannabis Colombia S.A.S., which not only came with an ideal growing site, but also the required national licenses to produce, manufacture, and export cannabis derivatives. Moving forward, the subsidiary will now build the required facilities for “value-added production and sales” in Colombia and the surrounding region. Closing out the month of July, GSRX Industries Inc. made progress on a new medicinal cannabis dispensary in Puerto Rico. Under its wholly-owned subsidiary Project 1493 LLC, GSRX will build what will be its eighth medical cannabis dispensary on the island. Based out of Dorado, Puerto Rico, GSRX has cannabis dispensaries in both California and Puerto Rico, but is allegedly in the process of expanding its business to include its own cultivation, extraction, manufacture and delivery of cannabis and cannabinoid products. Spanning 25 acres or 1,089,000 sq feet, CROP Infrastructure Corp.’s 30% owned Italian joint venture partner XHemplar Italia recently planted high-CBD ‘Cannabis Light’ plants. This was an over 100% increase on its previously announced capacity for the facility. CROP’s entry

into the European market through Italy was strategic, and adds another market to the company’s expanding regional portfolio which now includes California, Nevada, and Washington State as well.

JAMAICAN LOTS OF SENSE

The fertile agricultural landscape of Jamaica recently proved alluring enough for CROP Infrastructure Corp. to enter the market, and add its third country to the company’s portfolio. Through a joint venture agreement, CROP acquired a 49% interest in a zerocost lease of a 217,000 sq ft property ideally situated for cannabis production and extraction. Located upon five acres of some of Jamaica’s most fertile prime agricultural land, CROP secured its newest site in the Westmoreland Parish region. “CROP continues to build its global footprint by securing this strategic joint venture in Jamaica,” said CROP Director and CEO Michael Yorke in the company’s latest news release. “Many countries are now introducing new licensing and legislative regimes for CBD and cannabis and are prime entry points for our growing organisation.” With just under 2.9 million residents, Jamaica doesn’t seem like a major market on the surface. However, when factoring the

island nation’s significant tourism industry, Jamaica tacks on approximately 3 million visitors each year. According to Jamaica’s minister of tourism, Edmund Bartlett, the estimated global marijuana tourism market is around $494 billion. As the country begins to soften on its previous cannabis crackdowns, Bartlett expects his ministry can expand to 5 million annual visitors as the country continues to cultivate its cannabis connections. Thanks to its growing conditions, and cultural affiliations with the plant, Jamaica presents a somewhat unique market in the Caribbean region. CROP’s business strategy from the start has been to bolster investment in new cannabis projects, through facilitating infrastructure, providing growing SOPs, branding, and many other aspects of the sector. By adding Jamaican production to their footprint that also includes multiple US states, and Italy, CROP is building an impressive portfolio of assets for itself and its tenants. Yorke added, “Jamaica is of particular interest as its licensing regime allows for a full suite of genetics which will give our tenant growers the advantage of being able to provide buyers with a broad variety of CBD and THC end products.” Building off quotes from Jamaica’s minister of commerce, industry, agriculture and fisheries, Audley Shaw, CROP sees the country’s immense potential for further development of the cannabis industry for export. On a Jamaican government website, Shaw was quoted as saying, “[Jamaica] cannot afford to miss this boat,” and that Jamaicans should be “bold and move with a deep sense of urgency” towards tapping into the derivable economic benefits. Export into other markets, including the USA, props up the potential for the Caribbean island’s economy. With CROP’s expertise and investment acumen, as well as the entry of Aphria to the market, Jamaica’s potential as an important cannabis player was enhanced greatly in July. How the rest of the Caribbean’s nations respond could bring the whole region to a mutually beneficial tipping point in the very near future.

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