David Burt, the Premier, stated that cannabis cultivation for medical reasons will be legalised within months, with the first licence for production of the drug next year. The legalisation of cannabis for recreational use, as well as the growing and cultivation of it for medical purposes has become a fast-growing industry internationally.

While the One Bermuda Alliance is in support of all initiatives that will create jobs for Mr and Mrs Bermuda, the question is: has the proper research about establishing medical marijuana as a viable industry in Bermuda been done?

Cannabis would be a new revenue source for the Bermuda Government, but will there be any issues with our local banks and, by extension, correspondent banks processing the revenue generated from those who wish to establish a marijuana enterprise? Will this sort of industry affect any existing treaties that Bermuda has with the United States and other jurisdictions?

Growing marijuana is legal at state level in the United States; however, it remains illegal at federal level. Selling marijuana violates federal law and the proceeds of any marijuana transaction are considered to have come from money laundering.

This means that processing the proceeds from the sale of marijuana through most banks in the United States remains a challenge, notwithstanding the phenomenal growth of marijuana as an industry. Many banks in the US are national banks, and this is evidenced by the initials “N.A.” after the bank’s name — such as “Citibank, N.A.”

The term national bank has a precise meaning — this is “banking institution that is chartered and supervised by the Office of the Comptroller of the Currency, an agency in the US Treasury Department, pursuant to the National Bank Act”.

Accordingly, national banks are bound by federal legislation, and cannot and will not process cannabis funds. So growers in the US are having challenges banking their proceeds, if they want to bank with a national bank.

By contrast, state banks are chartered by the relevant state’s applicable government agencies — usually that state’s department of banking.

It is also important to note that Bermuda banks that have branches in other jurisdictions are not only bound by Bermuda’s regulatory environment, they are also bound by the rules, legislation and regulations of any other jurisdiction where they have a branch office.

Establishing a medical marijuana industry in Bermuda could be a job creator, but it is not without its challenges. We would like to see much more detail around the proposal, including how many licences are likely to be issued, where the marijuana farms will be located, how the farms will be monitored and regulated, and, most importantly, how the proceeds that derive from the industry will be processed through Bermuda’s banks.

We also need to make sure that we are not giving the impression of support for cannabis for other uses — we have young people watching these decisions and we need to be careful of the messages we are sending.

The Speech from the Throne is imminent and I hope we see those details released then.

• Ben Smith is the Shadow Minister of Social Development, Sport and National Security, and the MP for Southampton West (Constituency 31)