Regulations for the licence application, production and export of Medicinal Cannabis on Jersey (S.R.1.2022): Response of the Minister for Economic Development, Tourism, Sport and Culture.

Findings

Comments

1

The Jersey Cannabis Agency (JCA) has responsibility for the issuance of licences and is the named body in the Memorandum  of  Understanding (MoU) with the UK Home Office. The JCA is currently made up solely of the  Minister  for  Health  and Social  Services  and  is administered by the Chief Pharmacist.

Noted.

2

The Bailiwick of Guernsey Cannabis Agency  (BGCA)  is  made  up  of representatives  of  Environmental

Noted.  See  response  to  Recommendation  1 (below).

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Health and Pollution Regulation, the Chief  Pharmacist  and  business support  from  the  Committee  for Economic Development, with close support  and  consultation  with Bailiwick Law Enforcement officers. This  is  in  contrast  to  the  Jersey Cannabis Agency with the Minister for Health  and  Social  Services  as the  sole  designated member.

3

The Memorandum of Understanding (MoU)  is  between  the  UK  Home Office Drugs and Firearms Licencing Unit  (DFLU)  and  the  Minister  for Health  and  Social  Services  as representative of the Government of Jersey.  In the absence of standalone regulations,  the  MoU  allows  the Minister to issue licences in Jersey for the cultivation, processing and export of medicinal cannabis. The MoU was prepared by the UK Home Office with very  little  or  no  input  from  the Government of Jersey.

There were several iterations of the MoU which were considered by Law Officers and by the Chief Pharmacist. Law Officers made several recommendations  resulting  in  changes  to  the

MoU and agreed a final version which was the 5th iteration of the document.

Jersey has worked collaboratively with the UK Home  Office  for  over  20  years  on  issues relating  to  controlled  drugs.  The  principle purpose  of  the  MoU  was  to  formalise  the relationship specifically around the need for a cannabis agency to be able to issue licenses for the cultivation of medicinal cannabis.

The MoU would be required regardless of any standalone  regulations,  as  it  enables  the recognition of a Jersey Cannabis Agency as required  by  the  UN  Single  Convention  on Narcotic  Drugs  1961.  Licences  to  cultivate cannabis in the Island are issued under existing legislation which  is currently  the  Misuse  of Drugs (Jersey) Law 1978 and the Misuse of Drugs  (General  Provisions)  (Jersey)  Order 2009.

4

Jersey does not have its own specific regulations  to  control  the  Island's medicinal cannabis industry.

Noted. Whilst there is not specific, stand-alone legislation regarding cannabis- based products for medicinal use (CBPM), it is important to acknowledge that cannabis is nevertheless a controlled  drug  and  must  be  licensed  and handled accordingly, as would any controlled drug. The existing Medicines (Jersey) Law

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1995  specifically  regulates  production, distribution  and  supply  of  all  medicinal products  including  CBPMs  which  can  be prescribed and supplied to patients.

5

There is no requirement for the Chief Pharmacist  to  inform  the  Jersey Financial  Services  Commission (JFSC) of any proposed change of ownership  of  the licensee whether approved or non-approved.

Noted.

6

The Jersey licence application fee for the cultivation, processing and export of  medicinal  cannabis  is  low  in comparison with some EU jurisdictions and may not be economically viable in the future.

Noted. Fee structures will be reviewed annually (and can also be reviewed on an ad hoc basis) to ensure that the fees are appropriate to cover costs incurred by the Government and which may change over time, whilst also considering the impact on the industry, particularly in the early stages of business

development and the economic benefits that the sector brings to the Island.

7

The  Minister  for  the  Infrastructure, Housing  and  Environment  (MENV) informed the Panel that he had little involvement in the development of the medicinal cannabis industry, despite the Department  being  responsible  for Island  planning  and  environmental policy issues.

The MENV has conducted two site visits to two businesses that are in the process of setting up medicinal cannabis production facilities. The Minister's initial conclusion is that, owing to the nature of the equipment required and the potential  environmental  impacts,  the production  of  medicinal  cannabis  should  be viewed as distinct from the general planning description of agricultural or horticultural uses. The Minister further considers that a level of planning  control  should  be  introduced,  in likelihood  by  removing  certain  allowances currently  permitted  under  the  Planning  and Building  (General  Development)  (Jersey) Order  2011  and  other  relevant  subordinate legislation.

8

The current application procedure for a medicinal cannabis licence requires the submission  of  an  "Economic  Impact Assessment"  (EIA).  However,  unlike the  form  of  EIA  submitted  with  a planning  application,  the  EIA accompanying  an  application  for  a

Licenses issued by the Jersey Cannabis Agency relate to the cultivation, production, possession and supply of cannabis – there is no requirement or  relevance  for  an  Economic  Impact Assessment.

Equally there is no formal requirement for an

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medical  cannabis  licence  is  not available to the public and there is no procedure for the public to then make representations  relating  to  a  licence application.

Environmental Impact Assessment as defined under  existing  planning  and  building legislation  to  obtain  a  license  to  cultivate, possess and supply medicinal cannabis.

However, the Minister for Health and Social Services,  mindful  of  the  potential environmental impact of this activity, currently requires  conditional  licenses  to  include  a requirement  for  an  informal,  independent analysis of any environmental impact and how this will be addressed. The Minister for Health and Social Services has recognised that the use of the term EIA' in his licencing conditions for medicinal cannabis requires clarification. It is the Minister's intention to amend his licence conditions to clearly delineate the difference between the regulation of medicinal cannabis and  the EIAs required  by  the  Planning  and Building Law to regulate development

A full Environmental Impact Assessment (EIA) may be required as part of the separate process for a planning application under the Planning and  Building  (Jersey)  Law  2002  and  the Planning and Building (Environmental Impact) (Jersey) Order 2006. Schedule 2 of the Order sets out what must be contained  in  an  EIA (Environmental  Impact  Assessment)  for development purposes.

If the MENV proposal outlined in 7 (above) is adopted,  the  Minister  will  liaise  with  the Minister for Health and Social Services on how best to align these two processes, or simply to have  one  assessment,  within  the  planning process if deemed appropriate.

9

The  Department  for  Infrastructure, Housing  and  Environment,  with responsibility  for  Environmental Impact  Assessments  (EIAs)  under the  planning  application  process,

Noted, see response to 8 (above).

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have not had sight of either of the EIAs  submitted  with  the  licence applications  that  have  since  been granted by the Minister for Health and Social

Services.

10

Although  the  security  framework  is included  in  the  initial  licence application, there is no requirement for this to be approved by Planning prior to the  licence  being  granted.  Security requirements  for  each  medicinal cannabis cultivation site must be stated at  medicinal  cannabis  licence application stage however, the security does not  need to be actually in place before the licence is issued.

Noted. The requirement planning permission (including  for  site  security  arrangements)  is determined at the planning application stage. Issuing a conditional license in advance of the applicant  applying  for  planning  permission confirms that all necessary arrangements are in place, except for the  cultivation facility itself. This  enables  companies  to  invest  in  the planning and preparation of their facility, until a point at which an application for planning permission is required.

It is important to recognise that a full license application is required and is fully evaluated, with the only difference being that the facility is  evaluated  from  plans.  This  is  a  better approach compared to and in principle' letter of comfort, which may give rise to expectations of  a  license  being  granted  later  under  any circumstances. This approach is supported and used by the parent regulator i.e. the UK Home Office.  The  Panel  have  previously  been provided with copies of such licenses by the Chief Pharmacist.

11

The  States  of  Jersey  Police  have informed the Panel they will not be directly involved in the policing of the  medicinal  cannabis  industry  in Jersey  and  their  sole  responsibility will  be  to  respond  to  any  crime occurring

which  requires  a  police  presence  or investigation.

Noted.

12

The involvement of private security firms  to  undertake  the  monitoring

Noted. It is a mandatory requirement that the security assessment and plans submitted as part

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and implementation of security for medicinal  cannabis  sites  would eliminate pressure on

the States of Jersey Police and other public services.

of the license application need to be developed and  provided  by  an  independent  security specialist  as  highlighted  in  the  guidance provided to applicants.

13

Every  licence  application  must designate a specific Responsible Person as  the  person  responsible  for  the regulatory  affairs  of  the  medicinal cannabis business. Apart from passing due  diligence  and  enhanced  DBS checks,  there  are  no  specific qualifications necessary for the role.

Noted. While there are no set qualifications necessary  for  the  role,  it  should  be acknowledged  that  the  competency  of  the individual  designated  as  the  Responsible Person is assessed during the meeting between the  license  applicants,  UK  Home  Office officials and the Chief Pharmacist, which takes place as part of the application.

Part of the role of the person responsible for regulatory affairs is to ensure that the company employs the necessary specialists - including a suitably  qualified  Responsible  Person'  -  to enable  the  company  to  meet  its  legal  and regulatory obligations.

It  is  acknowledged  that  the  terminology responsible person requires some clarification in the context of the application process.

14

In  relation  to  the  disposal  of  the harvested cannabis crop, it is not clear what  procedures  the  Responsible Person would follow.  It is also unclear what  experience  the  Responsible Person  will  need  to  deal  with  its destruction within the methods set out and endorsed by the UK Home Office.

Noted. There are no prescriptive procedures. The  proposed  methods  of  destruction  and associated  Standard  Operating  Procedures (SOPs) are reviewed as part of the evaluation of the  application,  by  both  UK  Home  Office officials and the Chief Pharmacist.

The  person  responsible  for  regulatory  affairs must ensure that  a robust SOP  exists  for  the destruction  of  controlled  drugs  and  that  all destructions  are  personally  witnessed  and supervised  by  the  Responsible  Person' authorised to do so under the Misuse of Drugs law.

15

European  Union  Good Manufacturing  Practice  (EU/GMP) certification  is  the  highest recognition available by companies in the pharmaceutical sector. It involves

This is not correct.

The definition of CBPM in Paragraph 10 of Schedule 2 to the Misuse of Drugs (General Provisions) (Jersey) Order 2009, requires the

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rigorous  testing  of  the  product  to ensure that, not only the product, but the company, is compliant with strict

EU regulations.  Obtaining EU/GMP accreditation shows the company has been scrutinised and approved by the EU/GMP  licensing  authority,  it meets the required standards and the product is of a high quality (products that  comply  to  GMP  standards  in relation to the production of Active Pharmaceutical Ingredient (API) or Cannabis  Based  Products  for Medicinal  Use  (CBPM).  There  is currently  no  requirement  for  those granted  licences  for  cultivation, production and export of  medicinal cannabis  in  Jersey  to  obtain EU/GMP accreditation.

finished CBPM and the Active Pharmaceutical Ingredient  (API)  are  to  be  manufactured  in accordance with GMP. As such, any export of API or CBPM from Jersey would, by default, be produced in accordance with GMP.

16

As previously mentioned, the Minister for HSS is authorised to issue licences under the terms of the MoU however, these  are  purely  for  cultivation production, possession and supply. In order to process and manufacture and export the finished processed product, the  licence  applicant  would  need  to have  EU/GMP  accreditation  which requires separate assessment.

The Minister for HSS issues licences for the cultivation, production, possession and supply of  cannabis  under  Articles  3  and  10  of  the Misuse of Drugs (General Provisions) (Jersey) Order 2009.

The MoU enables the Minister for HSS to issue licences for the cultivation of cannabis which are  compliant  with  the  UN  Convention provisions relating to the requirement to have a Cannabis Agency. The Jersey Cannabis Agency is only relevant to licences for cultivation and not to licences for production, possession, and supply.

Subsequent production of Active Pharmaceutical Ingredient (API) or a finished Cannabis Based Product for Medicinal use (CBPM) must be in accordance with GMP. Compliance with GMP standards would be independently assessed by the  Medicines  and  Healthcare  Products Regulatory Agency (MHRA).

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Furthermore, the production or manufacture of a finished  CBPM  would  also  require  a manufacturing  licence  granted  under  the provisions of the Medicines (Jersey) Law 1995

Separately,  the  import  and  export  of  a controlled  substance  requires  the  relevant import/export  licence  under  the  Misuse  of Drugs (Jersey) Law 1978.

17

Without  the  licence  holder  obtaining EU/GMP  accreditation,  the  risk  is increased that lower grade crops could be exported from the Island resulting in damage to the Island's reputation.

This is not correct.

With reference to the comment at point 15 (above), the risk that finished cannabis-based products for medicinal use (CBPMs) or active pharmaceutical ingredients (APIs) could be exported  without  having  been  produced  in accordance with GMP is likely to be low as such exports would be illegal.

However,  it  is  feasible  that  there  could  be illegal  components  within  an  approved business.  Any  licence  holder  found  to  be illegally exporting product would risk having their licence revoked.  It is a license condition that any contravention of the Misuse of Drugs (Jersey) Law 1978 or the Medicines (Jersey) Law  1995  may  lead  to  the  license  being cancelled. The license condition states:

Contravention  of  any  provisions  of  the Medicines (Jersey) Law 1995, or the Misuse of Drugs (Jersey) Law 1978 may lead to the license being cancelled with immediate effect.'

It  might  be  possible  for  a  GMP-certified company to contract the services of a cultivator to produce raw plant material. If this were to occur, the contracted cultivator would not need to be GMP certified as their sole involvement would be in cultivating the plant. The subsequent processing of any plant material would, however, need  to  be  in  accordance  with  the  GMP requirements of the GMP-certified company.

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18

There is  little  evidence to  show  that checks  and  balances  are  in  place  to ensure the processing of the medicinal cannabis crop is done on an appropriate processing  site.  There  is  also  little evidence  in  place  to  ensure  secure

monitoring  so  that  the  existing cultivation  sites  do  not  become industrialised'.  Without these checks and balances there is a risk that existing cultivation sites could become sites for processing,  which  requires  a  more commercial  approach  and  a  relevant planning application.

Ultimately  site  selection  for  processing  (and cultivation) facilities will be considered under the  planning  process,  however  it  is acknowledged  that  this  is  still  under development (see point 7 above). It is however unclear what the Panel means by processing' – this  could  range  from  simple  drying  and packaging  to  laboratory  extraction  of cannabinoids or to the production of  finished CBPMs. Definitions here are important as all have differing requirements.

Any licence issued under the misuse of drugs legislation is site specific so any separate site for extraction  of  production  of  finished  CBPM would  be  subject  to  a  separate  licence application, so consideration is being given to the Panel's concerns.

The  MENV  is  not  aware  of  any  sites  where processing  is  taking  place  without  planning permission. The distinction between cultivation and processing is clear and is well understood by the  Infrastructure,  Housing  and  Environment (Regulation) Department.

19

The medicinal cannabis industry cuts across  a  number  of  political responsibilities,  and  the  Council  of Ministers  has  not  appropriately established  a  holistic  Government approach to the matter which has in turn blurred  lines  of  accountability.  It  is therefore  difficult  to  see  where  the Ministerial responsibility lies.

Noted.  The  CCG  was  established  to  provide oversight and input from a range of different government  functions  at  the  officer  level representing policy or regulatory functions that are considered relevant to the development of the medicinal  cannabis  sector.  A  key  role  is  to consider what is necessary in terms of policy and legislative alignment, development and delivery, to  provide  for  efficiency  and  consistency  of approach  and  for  individual  officers  to  make associated  recommendations  for  any  key decisions,  for  example  on  funding,  policy  or legislative changes to their individual Ministers or where appropriate the Council of Ministers for consideration. A Cannabis Political Group (CPG) was  established  in  2021  to  include  those Ministers that have political responsibility for

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policy  and  legislation  which  relates  to  the development of the medicinal cannabis sector. The  membership  of  the  CPG  includes  the following:

• Minister for EDTSC

• Minister for Health and Social Services

• Minister for Home Affairs

• Minister for the Environment

• Treasury Minister

• Minister for External Relations and Financial Services

The CPG has met twice, most recently on the 7th March 2022 to discuss draft Terms of Reference,

which  will  be  forwarded  to  the  Panel  once

proposed revisions agreed are made and formally approved at the next meeting of the CPG which is anticipated to be held towards the end of April.

20

The  Jersey  Cannabis  Agency  does not  have  clearly  defined  Terms  of Reference and is reliant solely on the Memorandum  of  Understanding (MoU)  currently  in  place  with  the Government  of  Jersey  (with  the Minister for   Health   and   Social  Services  as  the  sole representative of the GoJ) and the UK Home Office.

Noted.

21

The Panel appreciates the need for a cannabis co- ordination group of civil servants but is concerned that, with no  Minister  being  involved  in  this group, it might lead to key decisions being taken without considered input from Ministers.

See  point  19  (above),  but  it  should  be acknowledged that a number of references can be found in the minutes of the CCG which refer to the escalation of decisions up to Ministers. The Panel have been provided with these minutes.

22

The  medicinal  cannabis  industry  in Jersey  has  the potential to employ between 40-50 people in the immediate  term,  160–180  in  the medium term and 330- 360 in the long term.

Levels of employment related to cultivation will be entirely dependent on the number of licenses issued and the type and scale of business activity.

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23

It has been agreed that a tax rate of 20% will be applied to this industry on all profits.

This  was  agreed  by  the  States  Assembly following  a  recommendation  by  the  Revenue Policy  Development  Board  (RPDB)  at  their meeting  on  21st  March  2021.  The  RPDB recommended that a 20% rate of income tax be applied  to  companies  in  the  industry.  The meeting notes are publicly available:

Microsoft Word - RPDB meeting 30 March 2021

- minutes for publication v1 (gov.je)

The group also recommended that normal tax principles should apply – which means the usual approach to capital allowances and taxing net profits will be followed. However, the RPDB will  keep  the  situation  under  review  as experience (level and timing) of corporate profits reveals itself.

24

Now that Jersey has opted for a 20% rate on companies' taxable profits, tax revenues  from  such  activity  may  be minimal for several years from the date of licence registration.

The pace at which companies achieve revenue and consequently begin providing fiscal receipts to the Treasury either through profits, personal tax or indirect taxation is dependent on a range of factors e.g., ensuring compliance with necessary regulations,  availability  of  labour,  cost  of utilities,  levels  of  profitability  and  market demand.

25

The  medicinal  cannabis  industry's contribution  to  the Jersey  economy

is  not  expected  to  exceed  wage estimates in the early years.

See point 24 (above).

26

The  business  model  of  medicinal cannabis  companies  generally requires that they invest heavily in the  early  years  of  the  business. Profits  therefore  from  the  industry

may  be  minimal  for  several  years from the date of licence registration.

Noted.

27

Based on the information provided, the Panel's advisers have concluded that to date,  very  little  additional  "new" taxation would arise in the short to medium term. This includes personal

See point 24 (above).

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tax, corporate tax and indirect taxation such as GST.

28

The  Minister  for  Treasury  and Resources  has  informed  the  Panel that it is not yet possible to forecast how much tax will be raised from the taxation of the cannabis industry in Jersey due to the industry being in its very early stages and forecasts would be speculative.

Noted.

Recommendations

To

Accept/ Reject

Comments

Target date of action/

completion

1

The  Council  of Ministers should ensure that  there  is  adequate representation  on  the JCA  of  the  range  of relevant  Ministries, including  the  Minister for  Economic Development  and  the Minister  for  the Infrastructure,  Housing and Environment so that that matters related to all sectors impacted by the medicinal  cannabis industry  are  fully considered.

This should be carried out with immediate effect.

Co M/ MH CS

Accept

As detailed in the previous minutes of the CCG, the principle of expanding the JCA to include broader representation from across Government functions has previously  been  accepted  and  will  be discussed at the CPG.

Q2 2022

2

The Council of Ministers should  implement Jersey's own detailed and specific  regulations  for the  medicinal  cannabis

Co M/ MH CS

Accept

Ministers  will  commission  a  formal piece of work in collaboration with LOD to provide reassurance that a sufficient legislative base exists for the safe and sustainable  development  of  the  sector

Scoping Q2 2022

Recommendations

To

Accept/ Reject

Comments

Target date of action/

completion

industry.  This  work should  be  carried  out immediately with a clear timeline set in place with the  Legislative  Drafting Office.

and to determine the best way to achieve this. Initially, a formal mapping exercise will be completed in conjunction with LOD to scope the required work.

See also response to findings 3 and 4 (above)

3

The  Council  of Ministers should ensure that  the  medicinal licence  application process  includes  a  full business case setting out the reasoning behind the project, the project and operational  costs  and timescales  and  clearly define all benefits both financial  and  non- financial  to  Jersey.  A business  case  template should  be  developed with immediate effect.

Co M/ MH CS

Accept

Ministers agree that there should be  a further consideration of a standardised business plan requirement for potential operators  to  meet.  This  consideration would  form  part  of  a  wider  cannabis licensing strategy.

Q3 2022

4

The Council of Ministers should  ensure  the  Chief Pharmacist  informs  the Jersey Financial Services Commission  (JFSC)  of any proposed change of ownership of the licensee whether approved or non- approved.  This  would allow the JFSC to check the  change  against  its existing  register.  Any changes  of  ownership should  be  accompanied by a copy of the approval from  the  Chief Pharmacist.  This should

Co M/ MH CS

Accept

Agreed,  in  principle,  although  advice would be needed in terms the extent to which this would need to be formalised.

Companies are required to notify JFSC if there is any change of ownership and there doesn't appear to be a problem with the  Chief  Pharmacist  sharing  any information of this type if it is notified to him/her by licence holders.

It  is  a  license  condition  that  license holders notify the Chief Pharmacist prior to any change in ownership, so that the necessary  background  checks  can  be undertaken e.g. enhanced DBS.

Q2 2022

Recommendations

To

Accept/ Reject

Comments

Target date of action/

completion

be  implemented  with immediate effect.

The license condition reads as below:

Any proposed change of ownership of the licensee must be notified to the Chief Pharmacist in writing.

Failure to notify the Chief Pharmacist may result in the license being cancelled. The change of ownership must not take place  unless  expressly  approved  in writing by the Chief Pharmacist.'

As businesses are required to notify the JFSC of any change in ownership, there could be a reciprocal arrangement where the JFSC share this information with the Chief Pharmacist, where HLS provide a list of companies who hold a licence. Of course,  it  may  not  be  the  Chief Pharmacist in future once a broader JCA is  established  –  it  would  then  be  the newly constituted JCA.

5

The Council of Ministers should ensure that clearly defined  building  and development  plans  are put  in  place  at  licence application stage for the use  of  utilities  such  as water and electricity with standalone  structures (such  as  substations, pump  houses  etc)  if required.  This should be overseen by the Planning Department  and  put  in place  with  immediate effect.

Co M/ ME NV

Reject

The  Minister  for  the  Environment considers that the correct time and place for  planning  officials  to  assess  any building or development proposals is at the  formal  planning  application stage. Involving  planners  at  the  license application  stage  potentially  confuses the quite separate issues. Applicants can seek  pre-application  planning  advice should they wish.

6

The  Council  of Ministers should ensure the  licence  fee  for  the cultivation,  production

Co M/ MH CS

Accept

There is a general acceptance that fees will need to be reviewed regularly and amended over time.

Q3 2022

Recommendations

To

Accept/ Reject

Comments

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and export of medicinal cannabis  is  reviewed immediately  and benchmarked  against the  minimum  required resource to regulate this industry in Jersey. This should  be  carried  out with immediate effect.

7

The Council of Ministers should  ensure  that  all Environmental  Impact Assessments  submitted as  part  of  a  medicinal cannabis  licence application  are  made public  and,  a  process introduced  that  allows both the public and key stakeholders to comment on any such EIA prior to

the approval of any licence with immediate effect.

Co M/ ME NV

Reject

The  cannabis  licensing  application process does not include a full, formal EIA.

A formal EIA would be required as part of any planning process. The Minister for the Environment considers that all proposals  for  sites  for  medicinal cannabis cultivation should go through the  planning  process.  This  requires  a change  to  the  Planning  and  Building (General  Development) (Jersey) Order 2011.

Bringing  cultivation  within  planning control would require the submission of a  formal  (and  public)  EIA.  It  is anticipated that, if actioned, this process could be completed by Q1 2023.

8

The Council of Ministers should  ensure  that officers  of  the  Planning and  Environment Department  are  solely responsible  for  the assessment and approval of  any  EIA  submitted with a medicinal cannabis licence  application  prior to  the  Jersey  Cannabis Agency  (JCA) determining  the application  with immediate effect.

Co M/ ME NV

Reject

The cannabis licensing process should not  be  confused  with  the  planning process. They are entirely separate.

The  EIA  for  the  planning  process  is overseen  and  assessed  by  planning officials  in  the  planning  application process,  under  planning  legislation. There should be no need to bring this element  forward  into  the  license application.

This  matter  has  been  addressed  in  a Written Question (317/2021) previously.

See also response to finding 8 (above).

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9

The  Council  of Ministers should ensure that prior to a medicinal cannabis  licence  being issued,  a  detailed  plan for site security should be  set  out  within  any licence  application.  No cultivation of cannabis

should begin on site until all the approved security measures  are implemented and signed off  by  the  JCA  and penalties put in place to ensure compliance.

Co M/ MH CS

Reject

It  is  already  a  requirement  for  an application  to  provide  a  security assessment  report  prepared  by  an independent  security  advisor/specialist. This  requirement  is  specified  in  the application  guidance  provided  to potential applicants.

Licence  conditions  prevent  any cultivation, storage or processing of any controlled substance from taking place without  appropriate  security  being  in place  and  is  monitored  during compliance visits.

See response to finding 12 (above).

10

The Council of Ministers should  ensure  that  a specialised  training programme  is  delivered to  Customs  and Immigration  officers  in relation  to  handling  the import  and  export  of medicinal  cannabis products. A training plan should  be  developed within  6  months  of  the presentation date of this report.

Co M/ MH A

Reject

All  legal  importation  will  be  in accordance  with  an  import  license.  If there is no import license it is illegal. Training to be attentive to illicit drug importation and possession is already a function of officers from the States of Jersey Police and Jersey Customs and Immigration Service who are kept up to date by their day-to-day activity and also through existing professional links with national experts.

11

The Council of Ministers should  ensure  the Responsible  Person  who is  nominated  by  the licence  applicant  at application  stage  should hold  the  relevant qualifications  to undertake  this  role.  This should  include  relevant experience in both the

Co M/

  MH

CS

Reject

Responsible Person (RP) has a specific meaning in relation to the distribution of finished medicinal products which must be in accordance with Good Distribution Practice  (GDP)  and  for  which  the qualifications  and  experience  are defined.  Use  of  the  term  Responsible Person should therefore be avoided.

The person in the company responsible for  overall  regulatory  affairs  and

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science  and  biological industry  and  in  the disposal  of  hazardous waste  materials.  This should be made  part  of the  licence  application process  and  carried  out with immediate effect.

compliance is different. As part of the assessment  of  an  application,  the knowledge  and  competence  of  an applicant is assessed with the assistance of Home Office colleagues. A successful applicant will need to demonstrate that they have suitable staff to support them to undertake any licensable activities.

See also responses to findings 14 and 15 (above).

12

To  protect  the  quality and  reputation  of produce  grown  in Jersey,  the  Council  of Ministers should ensure there is a requirement to apply  for  EU/GMP accreditation  prior  to receiving  a  medicinal cannabis  licence  to cultivate,  process  or export  cannabis products. This should be monitored  by  a designated  body  (JCA) with  key  milestones  in place  to  ensure  the process  is  being followed and the licence holder  is  taking  the relevant  steps  to achieve this. This

should  form  part  of  the licence  application process  criteria  and should  be  carried  out with immediate effect.

Co M/ MH CS

Reject

It  is  not  possible  to  obtain  a  GMP certificate without growing cannabis as part of the GMP assessment will be to confirm  that  crops  can  be  grown  and processed  to  consistent  standards  and that  any  subsequent  processing of the cultivated cannabis is in accordance with GMP standards. The proposal that GMP certification be achieved prior to issuing a  licence  to  cultivate  is  therefore  not possible.  Licences  to  cultivate  must therefore be granted before final GMP assessment can take place.

Assessment of compliance with  GMP would be undertaken by the MHRA as part of the initial inspection undertaken by them to grant the GMP certificate and as part of the renewal process for any GMP certificate.

See also response to recommendation 15 (above).

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13

The  Minister  for Planning  and Environment  must ensure that any sites to be  used  for  the cultivation of medicinal cannabis  remain  solely for  that  use.  Should  a licence holder require a site for processing of the medicinal cannabis crop once  harvested,  a separate  planning application  for  this industrial  activity should be submitted for these  purposes  in  a suitably  zoned  area. This  should  be  carried out  with  immediate effect.

ME NV

Reject

This  is  already  in  place  through  the existing  planning  process.  See  also response to findings 7 and 18 (above).

14

The Council of Ministers must  recognise  cross departmental requirements  and  ensure synergies  are  developed especially  between  the Minister for Health   and Social   Services,   the Minister   for Economic Development,   Tourism, Sport   and Culture, and the  Minister  for  the Environment. This should be  carried  out  with immediate effect.

Co M/E DM

Reject

This has already been recognised and is already in place through the CPG which includes  the  Minister  for  Health  and Community Servicers the  Minister for Economic Development, Tourism, Sport and  Culture,  and  the  Minister  for  the Environment.

15

The Council of Ministers should ensure the Jersey Cannabis Agency has

Co M/ MH CS

Accept

Discussions are underway and this is to be added to the agenda of the next CPG meeting.

Q3 2022

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representatives of other Departments as members. At a minimum, this should include Department of Infrastructure, Housing and Environment, Economic Development, and the Chief Pharmacist and with further support from Law enforcement officers. This group should also be responsible for undertaking due diligence on new licence applications. This should be carried out with immediate effect.

16

The Council of Ministers should ensure the remit of the  Jersey  Cannabis Agency  is  expanded  to include  both  the monitoring  function  of the  medicinal  cannabis industry, and compliance with security, quality of production,  clear  moral conduct  of  people working  in  the  industry and  issuance  of  trade licences. The monitoring function  would  also include  ensuring Customs and Excise and the States of Jersey Police are well informed about the  process  of  the medicinal  cannabis

Co M/ MH CS/ MH A

Reject

The remit of the Jersey Cannabis Agency is  to  satisfy  the  requirements  of  the UNCND.

The States of Jersey Police (SoJP) and Jersey Customs and Immigration Service (JCIS) do not deal with the compliance around the medicinal cannabis licensing framework – but of course JCIS would conduct  monitoring  to  ensure  that products arriving/leaving the Island have the necessary documentation, including any  required  licenses.  However,  the JCIS and the police are and will continue to be well informed about

the progress of the medicinal cannabis industry via the Cannabis Coordination Group. In terms of being trained to be attentive to illicit drug importation and

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industry  and  are  trained to  be  attentive  to  illicit drug  importation  and possession.  This should be  carried  out  with immediate effect.

possession,  clearly  this  already  is  a function  of  officers  from  both  teams, who are kept up to date on trends by their day-to-day activity and being linked into the national drugs expert community.

Currently,  SoJP  have  6  nationally accredited drugs experts and JCIS have 5  who  provide  Jersey  Courts  with impartial  evidence  during  drug trafficking  cases.  As  part  of  their continued  professional  development, they  attend  seminar  events  and  the annual drugs expert course.  They are also linked into all drugs experts UK wide. This provides the experts with up- to-date trends.

17

The  Council  of Ministers should ensure the  Cannabis  Co- ordination  Group  is more  transparent  and publishes its minutes on the  Government  of Jersey  website. Furthermore,  it  should carry  out  a  wider communications strategy  to  help  the public  gain  a  better understanding  of  the potential benefits of the medicinal  cannabis industry in Jersey. The Council   of   Ministers should also carry out a  communication strategy  with  members of the public which may help  the  public  gain  a clearer understanding of

Co M

Partial Accept

Minutes have been made available but would need to be appropriately redacted where  they  refer  to  policy  in development  or  other  restricted  or sensitive information as per Government guidelines  when  placed  in  the  public domain.

A  communications  plan  has  been approved by Council of Ministers, which has the objective of explaining medicinal cannabis and the nature of the industry. However,  the  Government  cannot promote unlicensed medicinal products and cannot pre-empt clinical decisions. It is therefore not appropriate to highlight any potential benefits of CBPMs to the public.

Q3 2022

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what the future holds for the  medicinal  cannabis industry in Jersey.

This should be carried out within  6  months  of presentation  of  this report.

18

The Council of Ministers should  ensure  a  clearly defined structure chart is in  place  showing  the layout and responsibility for each of the supporting groups for the medicinal cannabis  industry.  This should  show  defined reporting lines from each of  these  groups  to  the relevant  Minister  with Terms  of  Reference setting  out  clear objectives.  This  should be  carried  out  with immediate effect.

Co M

Partial Accept

This has already been created to a large extent and was presented at the States Members  Briefing  on  18th  November 2021. However, it is accepted that a more formal  mapping  exercise  would  be required in respect to the acceptance of recommendation 2 (above).

This new industry, like others, does span a number of functions and portfolios but the  Ministerial  and  departmental responsibility for each aspect is clear:

• Supporting the economic development of the new industry

– Minister for EDTSC

• Applications and issuing of licenses (including import and export licenses)

– Minister  for  Health  and  Social Services

• Crime  prevention  and  import  and export controls – Minister for Home Affairs

• Planning  issues  –  Minister  for  the Environment

• Taxation  and  proceeds  of  crime legislation  –  Treasury Minister/Minister  for  External Relations and Financial Services.

19

The Council of Ministers should  consider alternative tax bases for

Co M/T RM

Reject

When  scrutinising  tax  policy,  the Scrutiny Panels often promote Jersey's tax principles of low, broad, simple and

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the  medicinal  cannabis industry in Jersey as the indicative taxable profits for the industry may be minimal for several years from the date of licence registration.  This should be  carried  out  with immediate effect.

fair'. An alternative basis for taxation for one small sector of our economy would be inconsistent with those principles.

As with all other industries, companies in the cannabis industry will be able to claim  legitimate  business  expenses against  their  income.  The  medicinal cannabis  industry  uses  advanced technologies that are expensive, which, as noted

in  the  report,  will  have  the  effect  of deferring tax on profits, possibly for a number of years.

The  Council  of  Ministers  does  not believe  this  provides  sufficient justification  for  departing  from  well- established  and  internationally recognised tax principles.

It is also worth noting that Government of Jersey officials communicated early on to the relevant companies that a 20% rate of income tax on profits would be imposed.  All  businesses,  especially those  in  their  early  stages,  rely  on certainty  of  treatment.  It  would  be disruptive to the emerging economy if Government decided, at this late stage, to impose a different form of taxation.

The Council of Ministers does, however, agree that this area should be kept under review  as  wider  government  strategy develops and as the level and timing of corporate  profits  from  the  industry becomes clearer.

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20

The Council of Ministers should  undertake  a reputational  risk assessment  to  determine the  impact  of  the medicinal  cannabis industry  on  Jersey's existing  core  industries. This  should  include  the mitigation  of  such  risks and  cover  financial, operational,  competitive, security,  privacy  and compliance.  This should be  carried  out  with immediate effect.

Co M/E DM

Accept

Ministers  will  commission  further strategic development work to that will assist Jersey to establish itself as a hub of cannabis excellence and a gateway for Europe  for  international  cannabis business  and  investors.  It  will  also identify the evolving needs of cannabis operators and investors and the policy areas where Jersey can build a unique competitive  advantage  to  meet  these needs.  Part  of  this  work  will  be  to undertake  a  risk  assessment  of  the island's  cannabis  sector  and  identify mitigation opportunities.

Q2 2022

21

To  improve  social awareness  and  reduce risk of misuse, a public engagement  process should be carried out to educate members of the public on the differences of  recreational  and medicinal cannabis and also  highlight  the potential  benefits  of medicinal cannabis.   A plan  of  communication should  be

compiled with immediate effect.

Co M/E DM

Accept

Agreed. This is already covered in the Government's  communication  plan  as referred  to  in  the  response  to recommendation 17 (above).

Q3 2022

22

The Council of Ministers should  consider  a  range of possible incentives for on-Island  medicinal cannabis  growers,  to apply  for  patent  and Intellectual Property (IP) protection.  This  should include  research  and development  and

Co M/E DM/ M EN V

Accept

It seems reasonable to consider where commercial  opportunities  exist  for developing  IP  and  building  on  the existing R&D programme in liaison with the Jersey Cannabis Advisory Board.

Q3 2022

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intellectual  property, which  hold  potential benefits. This should be discussed  with  external

stakeholders

within

6

months

of presentation of this report.

23

The Council of Ministers should  consider encouraging  the promotion  of  medicinal cannabis  for  the  use  in veterinary  medicine which is a new niche area. This should be carried out with immediate effect.

Co M/ ME NV

Reject

The  promotion  of  specific  cannabis products  is  arguably  not  a  matter  for Government, but for the private sector which will determine which markets to pursue.  Market  forces  may,  in  due course, direct the use of Jersey-produced cannabis towards animal medicine, but such products would currently require a long lead in time prior to approval either in Jersey or the UK.

The  use  of  veterinary  medicines  in Jersey is carefully regulated in line with recognised  international  standards  to protect both animal health and welfare and human health. The Chief Veterinary Officer  promotes  the  safe  use  of medicines  in  animals  (veterinary medicines)  and  has  highlighted  that considerable amount of data on safety and efficacy needs to be produced before a  medicine  can  be  considered  for approval as a

veterinary medicine. Currently in Jersey (and Great Britain) there are no approved veterinary  medicines  containing active substances derived from cannabis.

24

The Council of Ministers should ensure all existing medicinal  cannabis licence  holders

Co M/ MH CS

Reject

Medicinal cannabis is taken to refer to a finished CBPM as defined in the Panel's report.  Currently no company holds a licence  to  manufacture  a  finished

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implement  any  changes to their current medicinal cannabis  business following  any recommendations agreed by  the  Council  of Ministers  as  a  result  of this report. These should be carried out within the timeframe  stipulated, currently  one  year  from the implementation of the recommendation.

CBPM, so this recommendation is not currently relevant.

In addition to the in-year unannounced compliance visits described above, the current annual renewal cycle for licences to  cultivate  cannabis  provides  an opportunity to review any relevant and necessary conditions in relation to this. Similarly, a review of conditions relating to the production, possession and supply of controlled substances can also take place  at  the  annual  renewal  of  any licence.