A Legal Marijuana Industry Might Be What Puerto Rico Needs To Recover Financially
Back in 2015, a year before leaving office, then-Puerto Rican Gov. Alejandro Padilla signed an executive order legalizing medical marijuana. Two years later, Gov. Ricardo Rossello signed the legal framework to make Puerto Rico the only Caribbean island to legalize recreational marijuana. Now, there are around 72,000 patients that have signed up for the program run by the Department of Health. Despite many legal challenges, Puerto Rico is seeing a financial boom when it comes marijuana and the cultivation of the product.
So far, $11.5 million has been added to Puerto Rico’s economy due to recreational marijuana.
Puerto Rico, which is still recovering from Hurricanes Irma and Maria in 2017, is seeing some recovery from the legalization of pot. Puerto Rico is also under extreme pressure from its $72 billion in public debt that has caused myriad problems for island residents. However, it seems that recreational marijuana might be the ticket to Puerto Rico financial recovery.
According to NBC News, Puerto Rico has issued 77 dispensary licenses and 40 shops have opened on the island. The government projections also show that cannabis legalization could generate $100 million in new tax revenue by 2020 and create more than 20,000 jobs.
In order for Puerto Rico to reach those figures, it will depend on the number of new patients. With continued customers and a growing consumer base, the projected revenue numbers are a true possibility.
“It’s a new industry with a lot of exciting opportunities,” said Puerto Rico’s pot commissioner, Antonio Quilichini, executive director of the Puerto Rico Cannabis Program and Regulation Board, told NBC News. “We are seeing more and more patients register; we went from 20 patients a week to 1,500. Patients are excited and are welcoming alternative ways of healing.”
Despite growth, there are still challenges that come with dealing with the marijuana industry that includes financial institutions.
While there is a lot of money to be made through medical marijuana, the plant is still labeled as an illegal substance. That means many financial institutions aren’t lining up to offer services just yet.
Banking seems to be the biggest challenge in Puerto Rico. Tu Coop, the only local credit union providing services to the medical marijuana industry, had to cancel credit accounts earlier this year. Banco Cooperativo, a larger bank overseeing the credit union’s transactions, stopped accepting their checks.
International policies, like the UN’s Single Convention on Narcotic Drugs, hinder banking institutions from accepting money from a business selling marijuana. This is one obstacle that has slowed the growth of the marijuana industry in several countries, including Uruguay. The bank institute block can only change if marijuana is declassified as a narcotic drug on federal and international levels.
Despite the issue being solved after a judge ordered the larger bank to reinstate Tu Coop’s accounts, there are still many hurdles to overcomes. If a few financial institutions will work with the marijuana industry then a cash business will be the only alternative. This only serves to make it harder to track numbers and can be labor intensive.
This is why lawmakers in the House are expected to vote on the SAFE Banking Act, which would let legal cannabis businesses to use federal banking institutions. It would also help relieve the tensions between federal and local governments trying to oversee legal marijuana.
What’s the future for marijuana in Puerto Rico? The sky is the limit.
Despite various challenges in Puerto Rico, the growing marijuana industry is bringing optimism. With a growing number of patients, more growers and more regulations to help ease financial concerns, the possibilities are endless on the island.
While there might be certain stigmas that follow the industry and the plant itself, the move to make recreational marijuana legal has eased some of those misconceptions. Only time will tell where the industry goes and how much of a financial effect it will have on Puerto Rico.