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Scrutiny hears Jersey’s Medicinal Cannabis ‘reputation is pinned to the mast of high regulation and high quality’

Jun 02, 2023

Yesterday, the Economic and International Affairs Scrutiny Panel questioned the Minister for Economic Development, Tourism, Sport and Culture, Deputy Kirsten Morel, in a Quarterly Public Hearing. 

The Panel heard that the Medicinal Cannabis industry has contributed £50-60 million in inward investment to Jersey’s infrastructure so far. It was further encouraged that the regulation in and around this industry is being taken very seriously moving forward. The Minister argued that although ‘there is always a risk’ to losing a first mover advantage in a competitive market such as the Medicinal Cannabis industry if action is not quick, a high standard of regulation also presents a competitive advantage for investors: “Jersey’s reputation is pinned to the mast of high regulation and high quality”. The Minister added that he is also considering separate work to enable research in plant-based medicines in the island.

The Panel also questioned the Minister on the Value-for-Money Review of government grants to Arms’ Length Organisations (‘ALOs’), scheduled to be delivered in Q4 of this year. The Review will include examining the way ALOs operate as a whole, as well as salaries and wages, and funding structures. The Panel heard that, although some ALOs are ‘cost centres for Government’ and do not generate their own revenue, the value in terms of return on investment in these organisations is measured differently across the board. The Minister said, in his view some ALOs could move from a purely cost centre model towards one which is less reliant on government funding.

The Panel also heard:

•    The Condor Operating Agreement makes it difficult for new freight services to enter the market through setting a high barrier to entry; while updates to this agreement are currently being discussed, analysis has not been undertaken to identify the extent to which Jersey’s logistics markets can sustain competition. 

•    The annual Common Population Policy is expected to be published within a week. The Minister is exploring how the potential economic contribution of venture capital backed tech founders may be taken into consideration in the next Common Population Policy or the 2(1)(e) Policy for High Value Residents.

•    The Rural Economic Framework has supported 20 more farmers into business this year compared to last year, with another 20 more expected in 2024. The Minister is ‘incredibly proud’ that many of these are smallholders, which he considers will have a positive effect on diversity and innovation of farming in Jersey. 

•    Despite the collapse of two construction industry companies in Jersey, nearly all construction workers on their payrolls have been reemployed, with a government officer now directly liaising with the Jersey Construction Council to improve understanding of the industry.

•    No action has been taken on plans for an Island stadium plan; nor has the Minister been approached by any local sports body to represent it in seeking relaxation of rules with respect to stadium size for the purposes of international league progression.

•    The Minister said he supports the publication of approved business cases used to seek additional or increased budgets in the Government Plan where possible while identifying and protecting (and potentially redacting) commercially sensitive information.

Deputy Moz Scott, Chair of the Economic and International Affairs Scrutiny Panel, commented:

“We were encouraged by the Minister and his Officers’ updates regarding Jersey’s plans for the Medicinal Cannabis industry, and will be following proposed regulatory developments closely. Plans to review government grants to ALOs to ensure they are creating the best value-for-money possible for the Government and Public will be of great interest to the Panel moving forward. We encourage the Minister to continue to provide the Panel with regular updates on the issues raised today.”

The full recording of the hearing can be accessed here.

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