Can cannabis legalization rescue Lebanon’s ailing economy?

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A file photo taken on July 23, 2018 shows a cannabis plantation in the village of Yammoune in Lebanon's eastern Bekaa Valley. (AFP/File Photo)
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Updated 27 April 2020
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Can cannabis legalization rescue Lebanon’s ailing economy?

  • New law aims to regulate existing cultivation while making drug’s medical and industrial use legal
  • Experts welcome legalization considering the parlous state of the economy but with big caveats

DUBAI: The international media’s blanket coverage of the COVID-19 pandemic was interrupted on Tuesday by breaking news about Lebanon becoming the first Arab country to legalize cannabis for medical and industrial use.

Experts from different fields have welcomed the decision in light of Lebanon’s manifold problems compounded by the coronavirus crisis — but with big caveats.

Cannabis, also known as marijuana among other names, is a psychoactive drug from the cannabis plant used primarily for recreational or medical purposes.

Until now, Lebanon had banned the growth, sale and consumption of cannabis, even though legalization of production had been recommended in the past.

However, attitudes began to shift after the US consulting firm McKinsey & Company touted the legalization of cannabis in a study on how the government could revitalize the economy.

In 2018, the UN Office on Drugs and Crime (UNODC) ranked Lebanon in the world’s top five producers of cannabis.

Last year, Raed Khoury, Lebanon’s minister of economy, said medicinal marijuana exports could generate $1 billion in annual revenue for Lebanon.




A supporter of cannabis legalization demonstrates outside of the Charleston Gaillard Center ahead of the Democratic presidential debate on February 25, 2020 in Charleston, South Carolina. (AFP/File Photo)

For a country with one of the highest debt-to-GDP ratios in the world, the industry’s potential for revenue generation can hardly be glossed over.

Among those expressing guarded optimism is Dr. Nasser Saidi, a former chief economist at the Dubai International Financial Center who was Lebanon’s minister of economy between 1998 and 2000.

The move to legalize marijuana for medical use makes a great deal of sense for Lebanon, he said, noting that the country has long been a producer of hashish.

“In particular, the crop has helped the poorer areas of Lebanon, mainly the Bekaa Valley, and allowed agriculturalists to survive because many of their other crops aren’t necessarily exportable,” Saidi told Arab News.

“For the more traditional crops like potatoes, beetroot, olives and others, there is a lot of competition, whereas for hashish there is much less competition.

“Lebanon can build its reputation as a source of quality hemp. Medicinal marijuana in particular can be an important high-value export product.”

Saidi draws a parallel between Lebanon’s decision to decriminalize cannabis production, manufacturing and its use with the policies of some advanced industrial countries.

Pointing out that the US and Canada have legalized use of marijuana, hemp and hashish without any negative fallout, he said: “There is no reason why Lebanon should not be able to successfully and securely decriminalize hashish.”

Saidi’s guarded optimism is echoed by Cyril Widdershoven, a director at Verocy, a Dutch consultancy which advises on investments, energy and infrastructure risks and opportunities in the Middle East.

He believes conditional legalization could be a step towards taking out the middlemen and halting the illegal trade.

“If this is meant to be the main target, some support should be extended to the decision,” Widdershoven said.




A file photo taken on July 23, 2018 shows workers cultivating plants at a cannabis plantation in the village of Yammouneh in Lebanon's eastern Bekaa Valley. (AFP/File Photo)

“For a government, it can be very positive as it will bring, if properly regulated, additional taxes and income. Some amount of crime will get checked, though not all.”

Nevertheless, Widdershoven said much will revolve around how Lebanon defines “medical purposes.”

He said: “Is medical use the real objective or is it just a legal option to introduce cannabis in the open, without coming into conflict with other laws and regulations?” 

According to Widdershoven, “income from taxes is obviously a potential benefit, but Lebanon will need to introduce a system that can control and manage production, transport, sale and taxation.

“Without it, cannabis legalization for medical and industrial purposes is going to give rise to a semi-legal grey area.”

Similarly, Saidi, who served as vice governor of the Central Bank of Lebanon for two terms, said the new law should not amount to control of the business by Lebanese politicians.

“Hashish growers are afraid that legalization means the industry will come under the control of a government-licensing administration or body, which could then be open to abuse, corruption and clientelism,” he told Arab News.

“They will tell you they fear that licensing will be monopolized by politicians and their cronies, enabling the latter to control the production, distribution and export of hashish — to the detriment of the growers.”

Saidi said legalization should mean decriminalization with a light regulatory structure but not a strict licensing system.

“You cannot, in a country with Lebanon’s corruption levels, institute a system for the farming, manufacturing and distribution of hashish that can be monopolized by the state or captured by a corrupt political class and its cronies,” he said.

“The government can play a role in terms of ensuring the quality of medicinal hashish, particularly for export purposes, and monitoring for statistical, public-health and taxation purposes. But I would not favor a strict physical licensing system.”

Saidi sees a lot of hype surrounding the economic dividend of cannabis legalization.




A cannabis plant is seen during the opening of a cannabis (marijuana) clinic at the Department of Development of Thai Traditional and Alternative Medicine in Bangkok on January 6, 2020. (AFP/File Photo)

According to one estimate, up to 100,000 hectares could come into hashish farming within a period of five to 10 years, with a crop value of $1 billion to $1.2 billion.

But Saidi does not see income from the crop as something that can put Lebanon’s public finances on a sustainable footing.

“We should allow producers to switch crops away — from low value-added crops like potatoes and sugar beet — to go into hashish, (as) it would help some of the poorest of the poor in Lebanon who eke out a subsistence income from agriculture,” he told Arab News.

“But it’s not a problem solver for the Lebanese government.”

Said added: “You can impose a tax, which is fine. Hashish consumption could be subject to VAT for local consumption to generate revenue for government, or to a production tax at a low rate.

“But again, I am not in favor of a licensing system to raise revenue because of the potential of corruption and bribery.

“Effectively, a licensing system would mean a highly inefficient regime for the benefit of politicians at the expense of growers. Licensing would become another form of political clientelism.”

An expert on Lebanon’s recreational drugs trade, who asked to remain anonymous, told Arab News that cannabis legalization was smart from the standpoint of Lebanon’s parlous economic situation and public finances.

However, he added, making cultivation of the plant legal is one thing while enforcement of the law without fear or favor is quite another.

He pointed out that Lebanon is the third-largest exporter of hashish after Afghanistan and Morocco, accounting for six percent of the world’s illegal supply of the drug, according the UNODC in 2012.

“This has made many people in Lebanon rich and powerful, specifically in the Bekaa Valley, where most of the cannabis is grown,” he said.

He wonders whether legalization will open opportunities for newcomers to enter the business or further enrich the players and politicians who control the business.

The anonymous expert said that he was unsure of the contours of a long-term strategy to decriminalize cannabis inside Lebanon for commercial purposes.

“These are basic questions that must be addressed if the legalization move is to make a positive impact on the economy,” he said.

Citing the tobacco industry as a cautionary tale, he said all Lebanese producers are required to sell only to government-approved authorities that produce and sell cigarettes, such as the Régie Libanaise des Tabacs et Tombacs.

“The risk is that the same situation could arise with cannabis. An element of corruption can completely wipe out the positive impact,” he said.

In his opinion, the Lebanese government wants a piece of the pie with the global legal cannabis market tipped to reach $103.9 billion by 2024.

“One can only hope that the Lebanese government transforms cannabis cultivation into a diversified income stream, with scope for local industries such as medicine, pharmaceutical, textile, wellness, and even tourism to flourish,” he said.

“But all this may be too much to ask given previous the government’s track record in other sectors.”

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THE BIGGEST CANNABIS PRODUCERS AND CONSUMERS

Mexico: Medical marijuana was legalized in 2017. The legalization of the drug for recreational purposes is expected to take place by April 30, 2020. According to Arcview and BDS, recreational marijuana sales in Mexico are expected to reach $582 million by 2024, with an additional $441 million in medical spending, for a combined $1.02 billion.

United States: Marijuana is legal in 11 states for adults over the age of 21 and legal for medical use in 33 states. The US marijuana industry’s economic impact is predicted to reach $77billion by 2022, according to Marijuana Business Factbook, while studies estimate the industry will produce at least 330,000 jobs by 2022.

Canada: In 2018, Canada become the second country in the world to implement legislation to permit a nationwide marijuana market. By the end of August 2019, cannabis inventories across the country had reached almost 400 tons. In total, 5,884,055 packaged units of cannabis were sold across the country for medical and non-medical purposes in 2019.

Paraguay: The principal producer of cannabis in South America legalized cannabis for medicinal use in 2007. However, the proposed framework for implementing a medicinal cannabis industry was not approved until 2018. That year the government opened licensing opportunities for businesses looking to cultivate cannabis for medicinal purposes in the country. The Senate also approved a separate bill permitting the personal growth of cannabis for medical use, provided users present authorized certificates.

Jamaica: Since decriminalizing marijuana in 2015, Jamaica now allows citizens to grow up to five cannabis plants, while the possession of two ounces or less has been downgraded to a petty offence. According to the US State Department, Jamaican farmers cultivate 15,000 hectares of cannabis every year. The government has also granted licenses to farmers who want to grow cannabis for medical, therapeutic or scientific purposes.

Morocco: According to a report released by the UN Office on Drugs and Crime (UNODC), Morocco remains the world’s largest producer of cannabis, producing over three times more than the next highest contender, Moldova. The report suggested that cannabis production in the country has continued to grow, showing an increase from 35,653 tons in 2016 to 35,703 tons in 2017.

Nigeria: Nigeria has the highest cannabis usage worldwide with 20 million users. It is estimated that 20.8 million people in Nigeria consume the illegal commodity every year in a market estimated at $15.3billion. Two reports have stated that Nigeria has the highest rate of cannabis use in the world with 19.4 percent of its population over the age of 15 consuming the drug in 2019, and at least 12 percent consuming it monthly.

United Kingdom: The country was declared the world’s largest producer and exporter of medical cannabis by the UN’s International Narcotics Control Board in 2018. According to the International Narcotics Control Board (INCB), 95 tons of marijuana was produced in the UK in 2016 for medicinal and scientific use, accounting for 44.9 percent of the global total. The cannabis-based medicine ‘Sativex’ accounts for a significant proportion of UK legal cannabis production and is available on prescription.

Afghanistan: Over 10 years ago, Afghanistan was the largest supplier of cannabis, estimated at 1,500-3,500 tons a year, according to a UNODC report. Between 10,000 and 24,000 hectares of cannabis are grown every year in Afghanistan, with major cultivation occurring in 17 out 34 provinces.

India: In 2019, buyers in Delhi and Mumbai purchased 38.3 tons and 32.4 tons of cannabis respectively, despite the drug being illegal in these cities, according to data released by the Berlin-based data firm ABCD. Cannabis is sold at Rs315 per gram in Delhi and Rs329 per gram in Mumbai, which are the cheapest rates globally, says the report. In 2017, Uttarakhand became the first Indian state to allow farmers to cultivate hemp plants for industrial purposes. The drug is believed to have been sold and consumed across the country for decades.


Arab world, Middle East condemn Israel’s attacks against Israel

Updated 17 sec ago
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Arab world, Middle East condemn Israel’s attacks against Israel

DUBAI: The Arab world has responded to Israel’s strikes against Iran, each country offering its condemnation of the attacks that killed at least two top military officers, raising the potential for an all-out war between the two bitter Middle East adversaries.

The UAE, through its foreign affairs ministry, stressed the importance of “exercising the utmost self-restraint and judgment to mitigate risks and prevent the expansion of the conflict.”

“Enhancing dialogue, adhering to international law, and respecting the sovereignty of states constitute essential principles for resolving the current crises,” the foreign affairs ministry added.

The UAE emphasized the need to resolve disputes through diplomatic means rather than confrontation and escalation, and called on the United Nations Security Council to take urgent and necessary measures to achieve a ceasefire, and to reinforce international peace and security.

Oman offered its “strong condemnation of the brutal military aggression launched by Israel on the territory of the Islamic Republic of Iran, which targeted sovereign facilities and caused casualties.”

“Oman considers this action a dangerous and reckless escalation that constitutes a flagrant violation of the United Nations Charter and the principles of international law. It also represents unacceptable and ongoing aggressive behavior that undermines the foundations of stability in the region,” the country’s foreign affairs ministry said.

And Jordan’s foreign ministry spokesperson Sufian Qudah warned of the “consequences of such escalatory actions, saying they threatened regional security and stability and risk exacerbating tensions”, state news agency Petra reported.

Elsewhere Qatar said it “considers the assault a blatant violation of Iran’s sovereignty and security, as well as a clear breach of international law and its established principles,” state news agency QNA meanwhile reported.

“The State of Qatar voices its grave concern over this dangerous escalation, which forms part of a recurring pattern of aggressive policies that threaten regional peace and stability and hinder efforts aimed at de-escalation and diplomatic resolution.”

Qatar emphasized “the urgent need for the international community to assume its legal and moral responsibilities and to act swiftly to halt these Israeli violations.”

“The State of Qatar reaffirms its firm position in rejecting all forms of violence, and reiterates its call for restraint and the avoidance of escalation that could widen the scope of conflict and undermine regional security and stability,” QNA reported.

Turkiye also condemned “in the strongest terms” Israel’s air strike on Iran, calling it a provocation that violates international law and risks further escalation in the region.

The Turkish foreign ministry in a statement said the attack showed Israel “does not want issues to be resolved through diplomatic means” and urged it to halt “aggressive actions that could lead to greater conflicts.”

Jassim Mohammed Al-Budaiwi, Secretary-General of the Gulf Cooperation Council (GCC), also described the Israeli attacks as a ‘clear violation of international law and the United Nations Charter.’

Al-Budaiwi, in a statement, called on the ‘international community and the Security Council to assume their responsibilities towards immediately halting this aggression and avoiding escalation that could ignite a wider conflict, which would have dire consequences for regional and international peace.’


Iran ‘must make a deal, before there is nothing left’: Trump

Updated 2 min 24 sec ago
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Iran ‘must make a deal, before there is nothing left’: Trump

  • Trump earlier told Fox News he was aware Israel was going to conduct strikes on Iran before it happened
  • Secretary of State Marco Rubio said earlier Thursday that the United States was “not involved in strikes against Iran and our top priority is protecting American forces in the region”

WASHINGTON: US President Donald Trump urged Iran on Friday to “make a deal,” warning that there will be more “death and destruction” after Israel launched deadly strikes targeting Iranian nuclear facilities.

“There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end,” Trump said on his Truth Social platform.

“Iran must make a deal, before there is nothing left... JUST DO IT, BEFORE IT IS TOO LATE,” he said.

Trump earlier told Fox News he was aware Israel was going to conduct strikes on Iran before it happened, and stressed that Tehran “cannot have a nuclear bomb,” according to the US broadcaster.

His comments to Fox came after Israel pounded Iran in a series of air raids on Friday, striking 100 targets including nuclear and military sites.

Israeli Prime Minister Benjamin Netanyahu said the operation took aim at the atomic facility in Natanz, while Iranian media said the country’s Revolutionary Guards leader Hossein Salami and armed forces Chief of Staff Mohammad Bagheri were killed.

Trump told Fox News that he was made aware of Israel’s operation before it happened.

“Iran cannot have a nuclear bomb and we are hoping to get back to the negotiating table. We will see,” Trump said, according to Fox News.

Fox News also reported that “Trump noted the US is ready to defend itself and Israel if Iran retaliates.”

It added that Trump’s administration reached out to at least one key Middle Eastern ally to acknowledge that the strike was going to happen, but reiterated that the US was not involved.

Secretary of State Marco Rubio said earlier Thursday that the United States was “not involved in strikes against Iran and our top priority is protecting American forces in the region.”

“Let me be clear: Iran should not target US interests or personnel.”

Trump will be attending a National Security Council meeting Friday morning.


UN nuclear watchdog chief ready to travel to Iran to assess situation

Updated 22 min 26 sec ago
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UN nuclear watchdog chief ready to travel to Iran to assess situation

VIENNA: UN nuclear watchdog chief Rafael Grossi said on Friday he was ready to travel to Iran to assess the situation there after Israel carried out widespread military strikes that hit the sprawling nuclear complex at Natanz.

In a statement to a meeting of the International Atomic Energy Agency’s Board of Governors, Grossi said the other main enrichment center in Iran, Fordow, was not hit and neither was another nuclear facility in Esfahan, citing Iranian authorities.

There are no elevated radiation levels at Natanz, he added.

“I call on all parties to exercise maximum restraint to avoid further escalation. I reiterate that any military action that jeopardizes the safety and security of nuclear facilities risks grave consequences for the people of Iran, the region, and beyond,” Grossi said in his statement.

“I have indicated to the respective authorities my readiness to travel at the earliest to assess the situation and ensure safety, security and non-proliferation in Iran.”

He did not say what the extent of the damage at Natanz was or what parts of the site were hit. The site includes a vast underground uranium enrichment plant and a smaller, above-ground pilot enrichment plant.

Iran is enriching to up to 60 percent purity, close to the roughly 90 percent of weapons grade, at the pilot plant, but it is producing smaller quantities of that material there than at Fordow, a site dug into a mountain that military experts have said would be difficult for Israel to destroy through bombardment.

“Despite the current military actions and heightened tensions, it is clear that the only sustainable path forward – for Iran, for Israel, the entire region, and the international community – is one grounded in dialogue and diplomacy to ensure peace, stability, and cooperation,” Grossi said.


Jordan closes airspace, says it won’t be battleground for any conflict

Updated 13 June 2025
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Jordan closes airspace, says it won’t be battleground for any conflict

DUBAI: Jordan has not and will not allow any violation of its airspace, nor will it be a battleground for any conflict, a senior minister said in a statement on Friday.

“Jordan’s national security is a red line, and the Kingdom will not allow any attempt to threaten its security and the safety of its citizens,” Mohammad Momani, Minister of Government Communication and Government Spokesperson added.

Royal Jordanian Air Force aircraft and air defense systems intercepted a number of missiles and drones that entered Jordanian airspace Friday morning, a report from state news agency Petra stated.

The interception operation came in response to military assessments that missiles and drones were bound to fall into Jordanian territory, including populated areas, which could cause casualties, Petra added.

Momani also urged the international community to exercise pressure in order to restore calm and prevent further escalation in the region.

Jordan’s aviation authority closed the country’s airspace and grounded all flights after Israel attacked Iran.

“The Kingdom’s airspace is temporarily closed, and air traffic suspended for all aircraft – incoming, outgoing and in transit, as a precaution against any risks resulting from the regional escalation,” the authority said in a statement.

The country’s armed forces were also placed on high alert in response to growing regional tensions, a military source said.

The General Command was closely monitoring developments in the region and that the armed forces were at the highest levels of operational and logistical readiness to respond any potential emergencies, the Petra report noted.


After Israel strikes Iran, airlines divert flights, airspace closed

Updated 13 June 2025
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After Israel strikes Iran, airlines divert flights, airspace closed

  • Iranian airspace has been closed until further notice, state media reported
  • Six commercial aircraft have been shot down unintentionally and three nearly missed since 2001, according to aviation risk consultancy Osprey Flight Solutions

SEOUL: Airlines cleared out of the airspace over Israel, Iran and Iraq early on Friday after Israel launched attacks on targets in Iran, Flightradar24 data showed, with carriers scrambling to divert and cancel flights to keep passengers and crew safe.

Proliferating conflict zones around the world are becoming an increasing burden on airline operations and profitability, and more of a safety concern.

Six commercial aircraft have been shot down unintentionally and three nearly missed since 2001, according to aviation risk consultancy Osprey Flight Solutions.

Israel on Friday said it targeted Iran’s nuclear facilities, ballistic missile factories and military commanders at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon.

Tel Aviv’s Ben Gurion Airport was closed until further notice, and Israel’s air defense units stood at high alert for possible retaliatory strikes from Iran.

Israeli flag carrier El Al Airlines said it had suspended flights to and from Israel.

Iranian airspace has been closed until further notice, state media reported. Jordan also closed its airspace to all flights.

Abu Dhabi’s Zayed International Airport said on its social media account that flight disruptions were expected and passengers were ‘advised to check with their airline for the latest status of their flights before travelling to the airport.’

Dubai’s Emirates Airline cancelled its Iraq, Jordan, Lebanon and Iran flights on Friday. Qatar Airways also cancelled flights to and from Iraq and Iran.

Wizz Air Abu Dhabi also cancelled a number of flights on Friday that were scheduled to fly over areas affected by regional tensions in the Middle East. Abu Dhabi’s Etihad Airways said it is experiencing disruption to several services across the region due to airspace closures and the ongoing regional situation.

Turkish Airlines subsidiary AJet has cancelled flights to Iran, Iraq and Jordan until Monday morning following Israel’s attack on Iran, an AJet source said on Friday.

Greece’s Aegean Airlines has cancelled all flights to and from Tel Aviv scheduled for Friday, it said on its website.

Dutch airline KLM has cancelled all flights to Tel Aviv until at least July 1.

Russia’s Aeroflot cancelled flights between Moscow and Tehran, and made changes to other routes in the Middle East.

As reports of strikes on Iran emerged, a number of commercial flights by airlines including Emirates, Lufthansa and Air India were flying over Iran.

Emirates, Lufthansa and Air India did not immediately respond to requests for comment.

Iraq early on Friday closed its airspace and suspended all traffic at its airports, Iraqi state media reported.

Eastern Iraq near the border with Iran contains one of the world’s busiest air corridors, with dozens of flights crossing between Europe and the Gulf, many on routes from Asia to Europe, at any one moment.

Flights steadily diverted over Central Asia or Saudi Arabia, flight tracking data showed.

“The situation is still emerging — operators should use a high degree of caution in the region at this time,” according to Safe Airspace, a website run by OPSGROUP, a membership-based organization that shares flight risk information.

Several flights due to land in Dubai were diverted early on Friday. An Emirates flight from Manchester to Dubai was diverted to Istanbul and a flydubai flight from Belgrade diverted to Yerevan, Armenia.

Budget carrier flydubai said it had suspended flights to Amman, Beirut, Damascus, Iran and Israel and a number of other flights had been canceled, rerouted or returned to their departure airports.

The Israeli-Palestinian conflict in the Middle East since October 2023 led to commercial aviation sharing the skies with short-notice barrages of drones and missiles across major flight paths – some of which were reportedly close enough to be seen by pilots and passengers.

Last year, planes were shot down by weaponry in Kazakhstan and in Sudan. These incidents followed the high-profile downing of Malaysia Airlines flight MH17 over eastern Ukraine in 2014 and of Ukraine International Airlines flight PS752 en route from Tehran in 2020.