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September 2021 marks exactly one year since the South African government published the draft Cannabis for Private Purposes Bill for public comment and while some cannabis lobbyists may argue that many things haven’t really changed, there have been some significant developments since then. In fact, the last few months have been rather eventful for the South African cannabis industry in general.
Parliament recently debated proposed changes to the Cannabis Bill, which could see SA finally tapping into the global market and unlocking its full potential for job creation and foreign investment. Marijuana for medicinal use has been allowed in SA since 2017 and the private recreational consumption of cannabis has been permitted since 2020, however many advocacy groups argue that the Bill’s prohibitive nature in terms of cultivation and trade is currently holding the industry back.
In another exciting development for the industry, Kwanda Mtetwa became the first person in South Africa to obtain a legal prescription for medical marijuana through the South African Health Products Regulatory Authority. The approval of his Section 21 applications means he can now purchase the product from any legal, licensed cannabis cultivators in South Africa. Since February 2021, SAHRPA has issued a total of 31 cannabis cultivation licences to companies within South Africa.
Local company Cilo Cybin also announced its intention to list as a public company on the Johannesburg Stock Exchange, only a year after becoming the first South African company to obtaining the right to grow, process and package cannabis products.
Given these developments, it’s hardly surprising that the Gauteng, North West and Western Cape governments have all announced their intentions to invest a substantial amount of resources and capital into exploring opportunities within the local cannabis cultivation industry. Yet for all their good intentions, the industry still faces many challenges. For example, even though the global cannabis market is projected to reach an estimated $55-billion by 2026, more than 90% of the cannabis grown in Africa is traded for recreational purposes. Therefore local legislation that prohibits the sale of cannabis for recreational purposes in South Africa is hampering the growth of the market.
In addition, African farmers have traditionally grown local strains that are high in THC, however it is the low-THC, high CBD strains that are required for medicinal purposes. These farmers will therefore require not only financial assistance, but also practical guidance to convert their operations in order to meet the exacting standards required for export to the US, Canada and Europe. To assist with this, provincial governments and agricultural organisations can consult and partner with local cultivators like Colour Green, who are already producing plants and extracts that adhere to global industry requirements in state-of-the-art climate-controlled growing facilities.
Southern Africa has already been identified as an ideal cultivation ground, with one Canadian company even supplying tissue culture germplasm to a local laboratory as part of a deal to deliver premium, pest and pathogen-free cultivars. By building on the progress that has been made up to date and getting all stakeholders to work together to overcome the current challenges to growth, South Africa will finally be able to claim its slice of the lucrative global cannabis pie.
