Will Vanuatu finally unblock its hemp and medical cannabis sectors?

The Vanuatu is preparing to unblock its hemp and medical marijuana, A new bill to remove the financial barriers that have paralyzed these sectors since 2021 is being debated by legislators.

The bill, which is currently before Parliament, aims to modify the 2021 law on industrial hemp and medical cannabis, which legalized the cultivation, manufacture and export of industrial hemp and medical marijuana under license. Despite its initial promises, this framework remained inactive due to a major flaw: local banks refused to open accounts or process transactions for licensed operators.

Without an explicit legal guarantee protecting financial institutions working with cannabis businesses, investors and producers have been unable to start up their operations, even those holding licenses valid for 10 years. The reform currently under discussion would officially authorize banks to provide services to this sector, a measure that should finally enable the 2021 law to be applied in Vanuatu's 82 islands.

Opening up new economic prospects

The new amendment is one of 19 bills under consideration during this legislature, but it is of considerable importance to the country's economic strategy. In adopting its 2021 legislation, the Vanuatu has become one of the first countries in the Pacific to simultaneously legalize industrial hemp and the medical cannabis.

Five licenses have been granted, two for medical cannabis and three for industrial hemp, as well as designated growing areas on the islands of Efate, Santo, Malekula, Tanna and Erromango. Officials have promoted the program as a means of attracting foreign investments, create local jobs and open up new markets. export markets for value-added agricultural products.

If the banking barriers are lifted, this amendment could breathe new life into these projects and position Vanuatu as a niche player in the market. Asian cannabis market.

Agriculture remains the mainstay of Vanuatu's economy, employing around two-thirds of the population. Most citizens depend on small-scale farming, These include mixed crops such as coconuts, root vegetables, kava and tropical fruits. For decades, policymakers have been looking for ways to modernize and diversify the agricultural base with higher value-added crops.

Local hemp processing could also strengthen value chains, by stimulating investment in small-scale manufacturing and agricultural infrastructure.

Despite its modest size, Vanuatu's initiative places it at the forefront of a rapidly changing regional landscape. Throughout the Pacific, countries such as Fiji and Papua New Guinea have discussed similar frameworks, but few have gone this far on the legislative front.