Cannabis venture and wellness centre opens for business in Negril
Published:Wednesday | November 6, 2019 | 12:18 AMHuntley Medley/ - Senior Business Writer
With an investment of more than US$4 million, or approximately J$560 million, and boasting a cannabis oil-processing facility, a dispensary, consultation rooms, guest rooms and a built-in saltwater pool, Apollon Formularies Jamaica and Doc’s Place has set up shop in the tourist haunt of Negril.
The principals say they are still scaling regulatory and procedural hurdles even as the Government, through junior commerce minister Floyd Green, was on hand at its recent official opening ceremony giving the state’s endorsement to the investment.
Apollon Formularies Jamaica is a joint venture involving United States-based physician, medical researcher and entrepreneur Dr Stephen Barnhill and Jamaican businessman and former general secretary of the opposition People’s National Party, Paul Burke, among other investors.
In keeping with local regulations – policed by the Cannabis Licensing Authority, CLA– for such ventures to be majority owned and headed by Jamaicans, 10 Jamaicans own 51 per cent of the company, with Burke as its chairman and CEO. Barnhill, who owns 49 per cent, has been designated president of the enterprise. He is trained in laboratory medicine, and certified by the American Board of Bioanalysis.
Apollon Formularies Jamaica, a medical cannabis business registered in 2016, is an affiliate of Barnhill’s Apollon Formularies Inc USA and Apollon Formularies UK, which is now being built out in the United Kingdom. The local firm is complemented by a separate entity, Doc’s Place Negril – a four-room wellness centre, guest house, and restaurant owned by Barnhill and affiliated to Barnhill’s US-based Doc’s Place International.
Negril’s first legal marijuana dispensary, which is being touted by its owners as the first cannabis wellness centre in the Caribbean, had a soft opening in August and has already seen about 116 patients.
Aside from Barnhill, the centre has a local medical support team that includes neurosurgeon Dr Anthony Hall, who is the facility’s international medical director; oncologist and director of the Hope Institute Dr Dingle Spence; Dr Marjorie Vassell, the centre’s Jamaica medical director; dermatologist Dr Woodworth Wilson; and surgeon Dr Alfred Dawes.
The opening of the venture comes four years after conception and the journey to secure the myriad approvals, including for zoning, planning, environmental permits, construction, and cannabis operations. The business has confronted and overcome many obstacles, Barnhill, its lead spokesperson, told the Financial Gleaner in an interview.
The entity sought approvals from CLA for research and development, retail, therapeutic use, processing, and cultivation and says it has received licences for all except cultivation, for which it has a conditional licence in hand awaiting final inspection and approval.
Cultivation staff, approved by the CLA, is already in place. The plants for processing the oils and treating patients at the wellness centre are now bought from approved growers. Early last year, a community of local cannabis growers called the Apollon Kannabiz Collective was established as a commercial platform to organise and register traditional local ganja growers to produce for Apollon Formularies.
Apollon Formularies Jamaica does not now possess a cannabis export licence and, as such, is not authorised to sell its cannabis oils for export from Jamaica either directly or through its patients. The products are therefore for use in Jamaica.
The target market is said to be “medical cannabis patients”, including cancer patients, cancer patients on chemotherapy, recovering opioid addicts, and persons suffering from chronic pain. The model is also based on serving outpatients with medical cannabis prescriptions who are vacationing in Jamaica and who can benefit from treatment while staying in the country.
Doc’s Place can accommodate more than 150 outpatients per day with room for four residential patients.
Before the new cannabis licensing regime came into force, Barnhill had received an order from the Ministry of Science Energy & Technology, MSET, allowing the growing of cannabis for research. However, the current cannabis regime does not permit the holding of an MSET order and a CLA cultivation licence simultaneously, so the MSET order was surrendered and an application made through Apollon Formularies Jamaica for the cultivation permit.
The principals of Apollon Formularies Jamaica say they expect to be “cash flow-positive” by the end of this year but will have to gauge the take-up of the service and products before making projections on profit or returns on investment. Apollon began commercial operations on October 25.
The long-standing absence of banking services in Jamaica, as it is in the US, for cannabis businesses because of correspondent banking restrictions imposed by the United Stated government is among the major challenges being encountered by the business.
“It’s not easy. It’s a lot of headache,” Barnhill said of the situation. “You cannot open a bank account for a cannabis ‘touch-the-plant’ business. But we can have a bank account for Doc’s Place because it is a wellness resort; it doesn’t touch the plant. People can make reservations from anywhere in the world to come and stay here,” he said.
Most of the Negril property is devoted to the wellness centre. Barnhill noted that once Apollon Formularies starts generating revenue, it will run into banking challenges.
Some Jamaican cannabis businesses have resorted to banking overseas in territories that allow cannabis companies to operate bank accounts, he added, including Canada and the Cayman Islands.
The wellness centre operators says the business model being pursued is akin to a hospital’s, where the bulk of a patient’s bill would reflect charges for room and stay, food, attention by medical staff, and other services., with the cost of medication being a small percentage of the overall charge.
“Most of the revenue is generated through all of the services and features of the wellness centre. The medicine is just a small part of that. As a result, we wouldn’t have a lot of revenue coming in from just the medicine at this facility,” he said.