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Marijuana Business in Georgia – who will have right to produce?

By Levan Khutsishvili
Monday, September 17
On September 13, Parliament of Georgia published the draft law on “Controlling Cannabis” and list of the laws where changes will appear regarding the initiated draft law. According to the draft law, a special agency will be established in the Ministry of Environment Protection and Agriculture, aiming to regulate and regulate activities related to cannabis legal turnover.

The Government of Georgia establishes the rule of direct issuance of the license, and the rules for determining and remitting the initial price for issuing a license on the auction, are prescribed by the principles of the Law on Licenses and Permits. The license will be issued only for 5 years.

Draft law says that planting, harvesting, and cultivation of the plant can only be done in closed buildings (supposedly in greenhouses) with respective licensing. Processed marijuana or products containing marijuana should also be stored in a closed building.

The law sets the standards for making and cultivation of marijuana. Cultivation and preservation of the production will be permitted only in a building that will meet the safety standards set out by the government of Georgia, including building facilities should meet with security standards like light-sound alarms, daily protection, and video surveillance system as internal, also on the periphery.

An important part of the draft law is the system of licensing, as initiators declared 10 licenses will be issued for medical marijuana business - production and export and each license will cost 25 000 GEL.

1.The license for seeding, harvesting, and cultivation for medical purposes - 25 000 GEL;
2. License for seeding and cultivation of cannabis for industrial purpose - 25 000 GEL;
3. Cannabis processing license for medical purposes - 25 000 GEL;
4. Cannabis processing license for industrial purpose - 25 000 GEL;
5. The shipping license of cannabis / refined cannabis and/or its products - 25 000 GEL;
6. Perfumery-cosmetic production license containing cannabis - 25 000 GEL;
7. The license of production of cannabis pharmaceutical products - 25 000 GEL;
8. License for pharmaceutical products containing cannabis and/or cannabis processed for medical purposes - 25 000 GEL;
9. The export license of perfumery-cosmetic products containing cannabis and/or cannabis for industrial purposes - 25 000 GEL;
10. License for the import of hemp seeds and/or saplings for industrial and/or medical purposes - 25 000 GEL.

As stated in the draft law, the license holder can produce and cultivate marijuana for only perfumery-cosmetic purposes. According to the draft law, the domestic quota, the permissible territories and their selection criteria for seed planting, planting or cultivation of the plant will be determined by the decree of the Government of Georgia.

It turns out the Cannabis can appear important business for some people in Georgia, according to the official data’s global legal marijuana market size was valued at USD 9.3 billion in 2016 and Georgia will try to find its place among the exporter countries. Though some important question marks appeared after the Government started speaking about the initiative. First and most important question is who will have a license; will there be monopolization? some experts and politicians believe that marijuana business is in interests of former Prime Minister of Georgia – Bidzina Ivanishvili. According to the information of Rustavi 2, Bidzina Ivanishvili has more than 251 000 shares of one of the largest US corporations Goldman Sachs. The company is interested in the marijuana business and helps those investors who are trying to develop it. But the politicians from the ruling party believe that talks about the monopolization of the business are the provocation from the opposition parties and it is false information.

"On the contrary, we are talking about avoiding monopolization. All speculations should be completed. I'm telling you directly about 150 types of licenses will be held and it is the guarantee that there will be no monopolization, " – said Akaki Zoidze.

Prime Minister of Georgia Mamuka Bakhtadze also underlined that this initiative is only for implementation of the strong regulations for marijuana production, so another question mark that opposing part has (how it will influence the youngsters?), is answered by the Government, as they say that production and export of marijuana will be strongly controlled and once the law goes into effect, the Ministry of Internal Affairs will have a strong tool to deal with difficulties that can appear in the process of decriminalization.