4C LABS has become the first and only company to be awarded a medical cannabis cultivation licence in Guernsey marking a major milestone for the Channel Islands’ cannabis industry.
The Bailiwick of Guernsey Cannabis Agency (BGCA) announced earlier this week that of the seven licence applications made since it was established in July 2021, six were turned down.
4C Labs’ Chief Revenue Officer James Smith, who worked closely with the government for over a year, said that this demonstrated how serious Guernsey is ‘about making sure that they do things to a high standard’.
However, the government said the remaining companies, each of which is understood to be domiciled on the island, were receiving support and guidance to help them meet its strict requirements.
Nimble And Quick
4C Labs CEO Greg Dobbin told BusinessCann that Guernsey offers companies like his a significant opportunity to establish themselves outside of the crowded North American market.
“We’ve been to a lot of different countries in the world over the last three years trying to find a place where the regulations fit the licensing regime. And if you’re not a first mover in Canada, or the United States, you’re pretty much not getting in there.
“It really led us to the UK, and specifically Guernsey for production, because Guernsey seemed to be willing to be nimble and quick and allow people to apply for medical cannabis production, manufacture and distribution licenses.”
As a Crown Dependency, alongside Jersey and the Isle of Man, Guernsey is essentially self-governing and is able to act largely autonomously from the UK.
While this has allowed it to pull ahead of the UK in terms of regulation, helping attract both cannabis companies and investors, it reportedly remains a ‘very compliant place’ with ‘very, very strict’ regulation that takes its ‘reputation very seriously’.
According to Mr Smith, the government engaged deeply with his company, alongside other experts such as UK Cannabis Industry Council Chairman Professor Mike Barnes, to build its framework.
“It didn’t just happen by accident or overnight. They took the time and they educated themselves on good manufacturing practice standards.
“We put our quality compliance team in front of the politicians and the civil servants to help get them educated on the serious nature of producing medical cannabis APIs. They responded, they did what they said they were going to do.
“I think it’s important to note that the states of Guernsey at times could have been frustrating in terms of the speed that we’re moving at, but at the end of the day, they gave the support and created the infrastructure and the regulatory framework to build a real industry.”
Guernsey’s First Licence Holder
Founded in 2018 4C Labs, will now be able to begin growing its genetic strains in its newly-built 70,000sq ft facility on the island.
When construction is completed and operating at full capacity, the company expects it will generate around £75m a year in sales.
While it doesn’t expect to be generating revenue until Q3 of 2023, 4C Labs is also seeking a licence to operate tele-health clinics across the UK.
Mr Dobbin said that they have been in the application process with the Care Quality Commission, the governing body for clinic applications, for a year.
“We have been a year in the process with them held up by COVID. But we’re perseverant. So we expect we’ll have a positive result from them by Christmas. So we’ll have national tele-health licensed by clinics.”
These clinics will be supplied by 4C Labs ‘high-end medical flower grown in Guernsey and then bolstered by importing third party products that are distributed through Guernsey into the UK.’
It will offer both raw medical flower and oil based products which will be ‘third party or white labelled’, but reformulated in its own facility.
4C Labs believes securing the licence will open the doors to further funding, which it says will be used to build a ‘medical storage facility’, and for a ‘specials manufacturing licence’.
Mr Dobbin concluded: “I think that that licence will allow us to now pick up the capital necessary to fund our operations and we’ll commence our capital raise operation in December.”
Further Support For Failed Applicants
The Guernsey Government said the applicants who did not make the cut have received detailed feedback to support them with their applications.
The BGCA said that, ‘where appropriate’, conditional extensions have been granted to licence holders giving them the opportunity to continue to progress towards the required standards, which are reviewed jointly by the BGCA and the UK Home Office.
Deputy Neil Inder, President of the Committee for Economic Development, said: “This is a new sector to Guernsey so it’s really important we get it right in terms of meeting international standards. That’s why we have the MoU in place with the UK, as it benefits businesses that apply as there’s a framework with clear standards to meet.
“I know that some applicants will be disappointed but we have provided feedback to them that there is a clear path to a second round of inspections should any of them choose to pursue it. The development of this sector is important as part of efforts to diversify our economy wherever possible.”
A Memorandum of Understanding (MoU) was signed between the UK Home Office and the BGCA earlier this year, opening the door for cannabis companies and signalling the Channel Island’s ambition to establish itself as an industry hub.
Mr Inder said in July that the ‘MoU ensures that the Bailiwick can continue to remain at the forefront of a developing sector that provides diversification to our economy, revitalisation of our environment and new opportunities for skills and employment.’
In January this year Jersey-based company Northern Leaf became the first company to secure a high-THC (Tetrahydrocannabinol) commercial cultivation licence from the UK Government since 1998.
BusinessCann recently reported on the expansive moves by the British Crown Dependencies into the cannabis industry.
