Uganda Slaps Marijuana Investors with $5 Million Minimum Capital

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Uganda jumped on the first train to cultivate and export to Canada and Germany. In April 2019, Industrial Hemp (U) Ltd a private firm jointly working with an Israel company, Together Pharma Ltd, confirmed medical cannabis orders from at least 20,000 pharmacies in Canada and Germany, valued at $10,000 (Shs37.1m).

The said company licensed by the Ugandan government to cultivate and export marijuana signed annual supply contracts with pharmacies in Canada to an amount of $100m and €58m for Germany have the contracts running run 10 years but along the way, they said they hope to expand to satisfy future demand.

Uganda opening up to marijuana business threw local investors into a frenzy with about 20 companies sending letters to the Health Minister wanting a piece of the cake. In a local Ugandan daily seen by Urbwise, today, the Uganda government has issued guidelines that must be met by these investors to become licensed marijuana growers.

Among them include a minimum capital of $5Million and a bank guarantee of UG Sh4 Billion for individuals and companies seeking to grow or export marijuana for medicinal purposes. These investors will also be required to present a tax clearance certificate from the Uganda Revenue Authority, a list of employees and their job descriptions, a trading license, evidence of value addition to cannabis audited accounts.

The marijuana firms must not be located near schools, hospitals, and residential, areas. In the case of any associates, or business partners, the details must be disclosed to the government including site designs, a robust security system, with access control systems.

Clearly these strict rules are meant to discriminate local investors who would have benefitted greatly from the growth and cultivation of marijuana for export which is becoming a game-changer. The cabinet will be convening in to discuss and approve the guidelines.

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