South Africa’s cannabis sector: all smoke and no fire

Posted on October 28, 2022

In 2018 when South Africa effectively decriminalised cannabis, a light shone on the potential to be a global leader in the sector. But four years later, the light is but a dim flicker in a muddle of frameworks and plans.

What to do about this was the subject of a webinar on 26 October 2022, hosted by the Cannabis Organisation University of Pretoria (COUP), titled: “Realising the Development Potential of Cannabis in South Africa”.

“Millions of people in South Africa depend on income from cannabis or “dagga”, as it is commonly called,” said Dr Marc Wegerif, lecturer in Development Studies at the University of Pretoria.

“We are dealing with a sector that, until four years ago, was completely illegal. If we are opening it up to be a legal sector we need to ensure that it is structured to maximise the potentially large benefits for South Africa and all her people. Legalising cannabis the wrong way could put hundreds of thousands of people out of business,” explained Dr Wegerif, who chaired the webinar and is an active member of COUP.

A point of concern that was discussed was the fact that the country is already on Version 5 of the Draft National Cannabis Master Plan for South Africa. Yet, the estimated 900 000 small-scale farmers and growers in the country who should be the primary beneficiaries of the plan when it is finally implemented have not been consulted.

“We have five working groups convened by the Presidency for reviewing and revising the National Cannabis Master Plan but it is now at a standstill,” said panellist Dr Motshedisi Mathibe, a lecturer in entrepreneurship at the University of Pretoria’s Gordon Institute of Business Science (GIBS).

Standards for cannabis supply chain

“We urgently need an interim operating framework and to look at what public-private business models could achieve. Otherwise, we are going nowhere and we risk excluding the very growers who have been in the industry for many years,” she said.

“For now, their inclusion remains very difficult as their activities continue to be illegal, which is why we need cannabis removed from our Drug and Drug Trafficking Act,” said panellist Sibusiso Xaba, co-founder and CEO of Africa Cannabis Advisory (ACA) Group, a newly established investments and advisory business focused on the African cannabis market.

He added that South Africa needs standards for the whole cannabis supply chain: for the medical, recreational and cultural use of cannabis and the industrial hemp industry. Each of these streams need to be made a viable business opportunity for small-scale cannabis farmers and entrepreneurs.

“Our medical cannabis industry and availability to patients should be soaring, but we are fast falling behind other countries who decriminalised after us, including Israel, Germany the UK, Australia and Switzerland,” said Xaba.

“These countries quickly and efficiently structured their medical cannabis industry and standards, and made medical cannabis accessible to patients. Israel currently has about 170 000 cannabis patients. Australia is registering approximately 10 000 medical cannabis patients every month and the Australian government is providing funding to higher education institutions for cannabis research and IP,” Xaba explained.

Panellist Trenton Birch, CEO and co-founder of Cheeba Africa, Africa’s first cannabis and hemp education and training company that delivers courses across the industry value chain said: “We have been exporting tons of cannabis for decades, we have the pipeline, we just need to standardise it appropriately and legalise it.”

Natural production a strong selling point

Essential to standardisation would be licensing, and Dr Wegerif explained the draft Master Plan says little about licensing and nothing about taxes.

“Licensing needs to be structured to reduce red tape and expenses, especially for smaller-scale operators. To boost employment we have to explicitly encourage broad-based ownership. We can include explicit measures such as reserving primary production for small-scale farmers and smaller-scale businesses,” he said.

Regulations could also stipulate that cannabis production in South Africa is done in a sustainable, regenerative way. At the primary production levels, natural production practices without chemical fertilisers for example, could be a requirement. This could make a significant contribution to carbon capture and soil regeneration. Dr Wegerif said this could also be a strong selling point for South African cannabis products in increasingly environmentally conscious national and international markets.

Birch added another selling point: “Most of our cannabis is grown naturally in the sunshine whereas in other countries like Canada it’s grown indoors/in tunnels with lights.”

Another issue, Dr Mathibe pointed out, that needs addressing is the stigma of “dagga”.

“To get where we want to go, we need to educate society about cannabis because many still dismiss it as ‘dagga’ without considering the many economic, employment and health benefits it can bring,” she said.

Prioritising indigenous knowledge

Panellist Wendall Moore is completing his PhD at Wits University on the political geography of hemp cannabis. He questioned whether the government has the ability to get the cannabis sector going because he believes it is responding with “a prohibitionist approach”.

“Cannabis in Africa requires a conscious ideological shakedown, and instead of looking to government to take the sector forward, perhaps we have to look elsewhere, to ordinary people with indigenous knowledge, who have already been active in the cannabis sector for many years,” he said.  

“There is absolutely no excuse for our cannabis industry not moving forward,” Birch said.

“We need an interim framework that allows the industry to trade. There are fantastic models in existence and we have the solutions as an industry but it is not being taken seriously by government at a time when we are in trouble with our economy and we have people on the borderline of starvation,” he said.

Xaba concluded: “We have an election in 2024, we need to raise this issue and use our vote.”

Published by Hlengiwe Mnguni

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