Riding the Green Rush: Cannabis is a budding industry in the CNMI
Saipan— Victor Cabrera has a green thumb. He uses this gift to teach farming to middle school students and has expanded his audience through his YouTube channel.
“I have always enjoyed planting seeds, taking care of the plant, and watching it fruit or flower,” Cabrera said. “I figured since cannabis is an emerging industry, I would try my hand on the production side of things.”
After jumping through hoops, he finally received a class 1 cannabis producer license on March 12. It was the first producer license to be issued by the CNMI government, signaling the birth of commercial cannabis cultivation in the territory whose economy has long been dependent on the volatile tourism industry.
Studies show that the cannabis industry in the U.S. is projected to achieve $30 billion in annual market value by 2025. The CNMI is seeking to capitalize on this hot market trend as part of its goal to diversify its economy and boost government revenue. CNMI officials are projected to collect more than $100,000 in license application fees alone.
Modeled after a similar law in Oregon, the CNMI Cannabis Act of 2018 legalizes recreational and commercial use of marijuana. The CNMI Cannabis Commission was formed in 2019.
Gov. Ralph Torres, who signed the law in September 2018, said a regulated cannabis market would benefit the health, safety and overall quality of life for the CNMI residents. The new industry, he said, will create more job opportunities for residents.
“It will provide alternative treatments for pain to those afflicted with debilitating illnesses such as cancer and posttraumatic stress disorder, reduce cases of accidental overdoses, addiction, and abuse from more harmful narcotics like opioids and assist in alleviating the level of methamphetamine use in the CNMI,” the governor said in his letter to the CNMI Legislature.
The law, he added, will minimize youth access to marijuana through strict regulations and enforcement.
Among the five U.S. territories, Guam was the first to legalize marijuana use for medicinal purposes in 2015. Recreational use was legalized four years later. In Puerto Rico, only medicinal use is legal. Medicinal use is legal but recreational use remains prohibited in the U.S. Virgin Islands. In American Samoa, cannabis use and possession are still illegal.
Being the industry pioneer in the CNMI, Cabrera is referred to as the “trailblazer.”
“I honestly never dreamed that I would ever be in the cannabis business or that it would be legalized in my lifetime,” he said. “When the Cannabis Act of 2018 in the CNMI was passed, I was very interested in how it would unfold here. I took my passion for farming and my education in business and decided to take the plunge.”
Cabrera initially started the conversation with his wife to get into producing cannabis product around July 2020. “We have had several discussions, most importantly about the capital that it would take to get something like this started, even on a small scale,” he said.
In August 2020, Cabrera ventured out into the unknown and started to apply for a homegrown license. “That began conversations with the Cannabis Commission about possibly getting a producer license. By September 2020, I shifted focus to applying and working through all the licensing requirements.”
But the cannabis business, Cabrera found out, is not a walk in the park. Getting started requires ambition and perseverance, he said. “The process to get started is very tedious and at times excruciating. There are many government agencies as well as regulations that you need to abide by, all the while planning out your business. I think, for the most part, patience should be your best characteristic.
Learning to deal with delays as well as lengthy processing times will be your biggest adversary,” he said.
Starting up requires a significant amount of seed money. “The fees and licenses alone are upwards of $1,500. Those fees along with zoning, rental, power and water applications, security, construction, and so much more are just the beginning,” said Cabrera, who owns a shop called T-Marianas.
As of June 2020, Cabrera’s initial investments along with incidental expenses have accrued to over $17,000. “I do not anticipate selling anything until about the end of July or mid-August,” he said. “If I were to add a retail storefront license on top of my producer license, I think it would be safe to say that my expenses or capital investment costs will be about twice that amount.”
Cabrera hopes to meet the expectedly high market demand.
“I have basically turned growing cannabis into science as growing indoors is quite different than growing outdoors,” he said.
“I intend to expand T-Marianas in the very near future. To meet the demands of the consumers, I need to be able to evolve in terms of strains and varieties. The only way to do that is to have a sustainable genetics shop where I can focus solely on breeding new strains as well as provide a seed bank for T-Marianas. I do not intend to venture into any other areas of the cannabis industry. I will stick to what I am good at, and that is farming,” he added.