Introduction
When we began this project in 2003 we made a joke about including dagga in the table of contents with a note like “banned” or “removed” on the referenced page; we laughed and continued research on the other chapters. Sixteen years later we began work on the chapter with a quiet sense of irony, the (updated) page that you are looking at now.
The judgement confirmed by the Constitutional Court that cannabis was no longer illegal for private use unleashed a flood of interest and many business plans by companies and government departments (see “National strategy and government contact” heading) on how to capitalise on the development. Prohibition Partners estimates that global cannabis sales could be worth more than $101 billion (R1.8 trillion) by 2026 (Prohibition Partners, 2023), something on which South Africa could capitalise. The Department of Agriculture’s Cannabis Master Plan (2021) estimates the local sector to be worth R28-billion with a potential 25 000 employment opportunities. According to Agbiz’s Wandile Sihlobo, a potential cannabis value chain would/should focus on international trade (export) and domestic medicinal use, which would see accompanying economic activity and job creation particularly in the rural areas.
International business environment
The cannabis market size was valued at USD 10.99 billion in 2021 and is poised to grow from USD 13.43 billion in 2022 to USD 66.35 billion by 2030, growing at a CAGR of 22.1% in the forecast period (2023-2030) (SKYQUEST, 2024).
Find information here:
- Prohibition Partners compiles “exclusive reports provide the most in-depth coverage of the international cannabis industry”. Find these and sign up for a cannabis newsletter at https://prohibitionpartners.com.
- Chris Conrad, “world class cannabis expert”, http://chrisconrad.com
- Find international news and articles at Cannabis Now https://cannabisnow.com
- Cannabiz Africa www.cannabiz-africa.com
- SKYQUEST. 2024. Global Cannabis Market. Available at www.skyquestt.com/report/cannabis-market
Some articles:
- Duvall CS. 2023, December 27. “An African history of cannabis offers fascinating and heartbreaking insights – an expert explains”. The Conversation. Available at https://theconversation.com/an-african-history-of-cannabis-offers-fascinating-and-heartbreaking-insights-an-expert-explains-216281
- Goodall K. 2023, December 22. “Ukraine to legalise medical cannabis to treat wartime PTSD”. Eye Witness News. Available at https://ewn.co.za/2023/12/22/ukraine-to-legalise-medical-cannabis-to-treat-wartime-ptsd
- See our blog “Growth in Global Demand for Pure Medical Cannabis Sees Lesotho-Based Cultivator and Manufacturer Expand Its Production” (2023, June).
- AFP. 2023, August 16. “German govt okays plan to legalise recreational cannabis”. Eye Witness News. Available at https://ewn.co.za/2023/08/16/german-govt-okays-plan-to-legalise-recreational-cannabis
- Reuters. 2023, March 8. “Argentina makes headway in establishing a cannabis export industry”. Reuters. Available at www.reuters.com/markets/commodities/argentina-makes-headway-establishing-cannabis-export-industry-2023-03-08/
- Le Roux K. 2022, October 20. “Germany legalises the recreational use of dagga”. 702. Available at www.702.co.za/articles/457583/germany-legalises-the-recreational-use-of-dagga
- Reporter. 2022, October 7. “Why did Joe Biden pardon people convicted of federal marijuana offences?” The Economist. Available at www.economist.com/the-economist-explains/2022/10/07/why-did-joe-biden-pardon-people-convicted-of-federal-marijuana-offences
- Le Roux K. 2022, May 12. “Thailand gives away a million dagga trees to promote it as ‘household crop’”. Eye Witness News. Available at https://ewn.co.za/2022/05/12/thailand-gives-away-million-free-dagga-trees-to-promote-it-as-household-crop
- Thomas D. 2022, March 28. “Can Africa become a multi-billion dollar cannabis market?” African Business. Available at https://african.business/2022/03/energy-resources/aiming-high-africas-cannabis-future
- AFP. 2021, August 20. “Britain’s legal cannabis market booms on COVID demand”. Eye Witness News. Available at https://ewn.co.za/2021/08/19/britain-s-legal-cannabis-market-booms-on-covid-demand
- AFP. 2021, March 18. “Mexico prepares for legal marijuana gold rush”. Eye Witness News. Available at https://ewn.co.za/2021/03/18/mexico-prepares-for-legal-marijuana-gold-rush
- AFP. 2020, October 14. “Rwanda to grow medical cannabis, strictly for export”. Eye Witness News. Available at https://ewn.co.za/2020/10/14/rwanda-to-grow-medical-cannabis-strictly-for-export
- Power M. 2020, April 5. “Stoners cheered when Canada legalised cannabis. How did it go so wrong?” The Guardian. Available at www.theguardian.com/society/2020/apr/05/stoners-cheered-when-canada-legalised-cannabis-how-did-it-all-go-wrong
Local business environment
The policy framework for the legal production of cannabis may still take a long time to be clarified with the danger that benefits for farmers will not be realised (Mathibe, 2023; Erasmus, 2019). Countries where production is legal currently supply the South African market for medicinal cannabis.
Progress, following the introduction of the Cannabis Master Plan, has largely stalled (Mathibe, 2023). The steps necessary to maximise the potential of the crop (Qobo & Sihlobo, 2019) remain:
- The license fee should not be prohibitive.
- A single authority should oversee the various licenses, be they for medical, industrial etc purposes.
- A value chain approach should be taken where focus is not only primary production but goes from seed breeding to high value hemp industrial products. Indeed opportunities exist not only for smallholder farmers but also for agronomists, scientists, research and development. There can also be job creation in branding (see Werksmans, 2019), packaging, logistics and transport.
The Cannabis Development Council of SA (CDCSA) identified several other economic sectors which could be involved in a successful cannabis economy (includes hemp):
- Animal feed
- Food enrichment
- Cosmetics
- Foods
- Supplements
- Biodiesel
- Beverages
- Textiles
- Bio-composites
- Automotives
- Packaging Nonwovens
- Paper
- Food fibre
- Insulation
- Construction
- Biofuels
- Animal bedding
- Hydroponics
- Nutraceuticals
- Health teas
- Pharmaceuticals
The provinces best suited climatically for possible cannabis cultivation are KwaZulu-Natal, Eastern Cape and Limpopo. High profit margins and ease of production are included as benefits of the crop (Mpofu, 2019). Apart from new employment opportunities and economic growth, a tax on the cannabis value chain would also be another income for government.
Controlled, international trade in cannabis and its products, and medicinal use locally is where the focus should be. Increased research will assist policy makers in evaluating the benefits and possible unintended consequences (Sihlobo, 2019).
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For the newcomer
- GS1 South Africa. 2023. Launching Cannabis Products in South Africa: How to Get the Basics Right for Retail. Available at https://gs1za.org/industries/
- Read the blog “The Complexity of Growing Cannabis: Tapping into a new market” (2022, September).
- Pereira R. & Van Der Walt L. 2022, June 14. “Budding breeders – Cannabis and intellectual property rights”. Go Legal. Available at www.golegal.co.za/cannabis-intellectual-property
- Atkinson R. 2022, April 1. “Legally speaking – Where can we grow cannabis? An update for Agripreneurs”. GoLegal. Available at www.golegal.co.za/cannabis-goods-agripreneurs/
- Kriel G. 2022, March 15. “Growing medical cannabis: A capital-intensive venture with big returns”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-business/agribusinesses/growing-medical-cannabis-a-capital-intensive-venture-with-big-returns/
- A webinar held by Cliffe Dekker Hofmeyr (CDH) (2021, November) saw industry experts take the viewers through the new hemp licensing framework, its opportunities and potential pitfalls, and provided insight into cannabis as a viable agricultural commodity. The YouTube video is an excellent introduction to cannabis and its potential.
- McQue K. 2020. At Home with Cannabis. Cape Town: Penguin Random House SA.
- Find the grower guidelines “How to Grow Cannabis In Your Garden” by Brian Barth and “10 Steps to Growing Cannabis Safely and Efficiently in Your Own Home” by Marco Torres.
- Botha L. 2019, September 27. “Medicinal cannabis: no, it doesn’t grow like a weed!” Farmer’s Weekly. Available at www.farmersweekly.co.za/crops/field-crops/medicinal-cannabis-no-it-doesnt-grow-like-a-weed/
For guides on processing cannabis, contact role players (see later heading).
National strategy and government contact
- The Presidency and National Treasury’s Operation Vulindlela (OV) is aimed at unlocking the cannabis industry in the country. The Department of Agriculture, Land Reform and Rural Development is the lead department, tasked with making the cannabis sector grow. According to the DALRRD in its Cannabis Master Plan, the industry is worth R28 billion and could create 25 000 work opportunities (DALRRD, 2021).
- Every Premier/MEC wants his/her province to be “the hub” for cannabis or hemp but there are no SA government funded cannabis and hemp farms. The reasons for this are: (i) It is a high risk sector (ii); Only offer refunds/reimbursement (iii) Budgets are depleted (iv) Hemp and cannabis is still not considered a recognised crop (v) No start up funding, and (vi) Annual profits over R50m cannot be funded (Hemp 4 Life, 2024).
- The South African Health Products Regulatory Authority (SAHPRA) regulates the issuing of Cannabis licences. SAHPRA has issued 102 cannabis licences across the country (Hemp 4 Life, 2024).
The Law on cannabis:
- Only legal for private use at home
- Cannot be bought or sold
- Cannabis can be shared amongst friends but no money must exchange hands
- Private and social cannabis clubs are not legal
- Cannot use cannabis in public or around non-consenting adults
Government role players:
- Department of Agriculture, Land Reform and Rural Development (DALRRD) www.dalrrd.gov.za
- South African Health Products Regulatory Authority (Sahpra)
www.sahpra.org.za - Department of Trade, Industry & Competition (the dtic) Advocacy and Policy Coordination www.thedti.gov.za
- Eastern Cape Department of Rural Development and Agrarian Reform www.drdar.gov.za
- Department of Economic Development (Kwazulu-Natal) www.kznedtea.gov.za/
Further reference:
- Thorne S. 2024, April 1. “A R28 billion game-changer for South Africa – but government dragging its feet”. BusinessTech. Available at https://businesstech.co.za/news/business/762883/south-africas-cannabis-sector-looks-to-prove-its-worth-to-government
- Pereira R. 2024, March 24. “President to puff, puff, pass Cannabis Bill into law”. Go Legal. Available at www.golegal.co.za/cannabis-bill-law/
- Read the Parliamentary Monitoring Group’s account of the Small Business Development committee meeting “Cannabis and Hemp Industry: Challenges and Opportunities” (6 March 2024) at https://pmg.org.za/committee-meeting/38520
- Read the Parliamentary Monitoring Group notes on the Agriculture, Land Reform and Rural Development committee meeting (27 February 2024) on cannabis and hemp producer challenges at https://pmg.org.za/committee-meeting/38420
- Fraser L. 2023, October 1. “New cannabis laws coming for South Africa”. BusinessTech. Available at https://businesstech.co.za/news/government/720820/new-cannabis-laws-coming-for-south-africa
- Reporter. 2023, March 30. “Western Cape unveils Cannabis Implementation Plan for Agriculture”. Western Cape Government. Available at www.westerncape.gov.za/news/western-cape-unveils-cannabis-implementation-plan-agriculture
- Neethling B. 2023, February 26. “Small-scale cannabis farmers strangled by red tape”. Daily Investor. Available at https://dailyinvestor.com/business/9569/small-scale-cannabis-farmers-strangled-by-red-tape/
- Madia T. 2022, June 13. “Ramaphosa appoints new policy head for SA’s cannabis industry”. Eye Witness News. Available at https://ewn.co.za/2022/06/13/ramaphosa-appoints-new-policy-head-for-sa-s-cannabis-industry
- Waetjen T. 2020, November 30. “What history teaches us about shaping South Africa’s new cannabis laws”. The Conversation. Available at https://theconversation.com/what-history-teaches-us-about-shaping-south-africas-new-cannabis-laws-150889
- Sihlobo W. 2020, February 4. “Fundamental Pillars of Cannabis Market”. Available at https://wandilesihlobo.com/2020/02/04/fundamental-pillars-of-cannabis-market/
- Qobo M. & Sihlobo W. 2019, July 28. “Lessons from Africa: High time for SA to refine its cannabis licensing mechanism”. Daily Maverick. Available at www.dailymaverick.co.za/article/2019-07-28-lessons-from-africa-high-time-for-sa-to-refine-its-cannabis-licensing-mechanism/
Role players
Further reference:
Find role players at the Cannabis Expo www.thecannabisexpo.co.za and at https://cannabiscontacts.co.za.
Websites and publications
- Visit the websites of role players and previous links on this page.
Videos
- Watch the Marijuana SA videos on YouTube.
- Rice C. 2018. Cannabis: A Lost History. Available at www.youtube.com/watch?v=X2p6qFT_Zjg&t=66s
- CNBC Africa. 2018, December 13. “Exploring the economic potential of legal dagga in SA”. Available at www.cnbcafrica.com/videos/2018/12/13/exploring-the-economic-potential-of-legal-dagga-in-sa/
Some articles
- Reporter. 2023, October 31. “Permits to change the lives of farmers”. SA News. Available at www.sanews.gov.za/features-south-africa/permits-change-lives-farmers
- Francje R-L. 2023, October 12. “Cape Town man who ran hydroponic cannabis lab sentenced”. IOL. Available at www.iol.co.za/news/crime-and-courts/cape-town-man-who-ran-hydroponic-cannabis-lab-sentenced-edd22217-b5da-4157-99b7-437537eb3b46
- Matshoba A. 2022, September 29. “Fedgroup adds hemp to impact farming investment options”. Moneyweb. Available at www.moneyweb.co.za/investing/fedgroup-adds-hemp-to-impact-farming-investment-options/
- Vanek M. 2022, September 11. “Europe’s Call for Medical Cannabis Sees South Africa Firm Thrive”. Bloomberg. Available at www.bloomberg.com/news/articles/2022-09-11/europe-s-call-for-medical-cannabis-sees-south-africa-firm-thrive
- Mntambo N. 2022, August 13. “‘We want to turn the Vaal into a trade cannabis hub in Gauteng’ – Makhura”. Eye Witness News. Available at https://ewn.co.za/0001/01/01/we-want-to-turn-the-vaal-into-a-trade-cannabis-hub-in-gauteng-makhura
- Kriel G. 2022, June 30. “‘Traditional farmers left out of cannabis boom’”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-news/south-africa/traditional-farmers-left-out-of-cannabis-boom/
- Motha S. 2022, March 17. “KZN cannabis farmers fear winds of change”. Sunday World. Available at https://sundayworld.co.za/business/kzn-cannabis-farmers-fear-winds-of-change/
- Luckhoff P. 2021, June 2. “SA’s first cannabis fund makes its opening investment in local medical grower”. 702. Available at www.702.co.za/articles/418202/sa-s-first-cannabis-fund-makes-its-opening-investment-in-local-medical-grower
- Lindeque M. 2021, February 24. “Gauteng eyes cannabis industry as one to get economy on a high”. Eye Witness News. Available at https://ewn.co.za/2021/02/24/gauteng-eyes-cannabis-industry-as-one-to-get-economy-on-a-high
- Read the blog “Cannabis industry could help reboot economy if laws are eased” (2021, January).
- Bernstein D., Lopes R. & Gibson K. 2020, August 18. “Rolling out provisions for private Cannabis use in South Africa”. Baker McKenzie. Available at www.polity.org.za/article/rolling-out-provisions-for-private-cannabis-use-in-south-africa-2020-08-18
- Duma N. 2020, August 11. “KZN wants to be leading exporter of cannabis, govt reveals”. Eye Witness News. Available at https://ewn.co.za/2020/08/11/kzn-wants-to-be-leading-exporter-of-cannabis-govt-reveals
- Geach C. 2020, June 20. “High times for weed industry as business booms”. Weekend Argus. Available at www.iol.co.za/weekend-argus/news/high-times-for-weed-industry-as-business-booms-49653479
- Walia A. 2020, January 20. “Bees Absolutely Love Cannabis & It Could Help Restore Their Populations”. Collective Evolution. Available at www.collective-evolution.com/2020/01/20/bees-absolutely-love-cannabis-it-could-help-restore-their-populations/
- Dawood Z. 2019, November 4. “Don’t be confused by the law, selling dagga is illegal, cops warn”. IOL. Available at www.iol.co.za/dailynews/news/kwazulu-natal/dont-be-confused-by-the-law-selling-dagga-is-illegal-cops-warn-36627244
- Persens L. 2019, October 14. “CT strawberry farm gets first commercial licence to cultivate cannabis”. Eye Witness News. Available at https://ewn.co.za/2019/10/14/ct-strawberry-farm-gets-first-commercial-licence-to-cultivate-cannabis
- Reporter. 2019, September 13. “JSE’s first dagga business buys a Lesotho supplier”. Fin24. Available at www.fin24.com/Companies/jses-first-dagga-business-buys-a-lesotho-supplier-20190913
- Ginindza B. 2019, August 27. “Medical Cannabis industry takes off on a high note as Felbridge licensed to trade”. Business Report. Available at www.iol.co.za/business-report/economy/medical-cannabis-industry-takes-off-on-a-high-note-as-felbridge-licensed-to-trade-31388812
- Kibel D. 2019, August 12. “Cannabis: Taking the high ground in investment”. Personal Finance. Available at www.iol.co.za/personal-finance/investments/cannabis-taking-the-high-ground-in-investment-30695829
- African News Agency (ANA). 2019, August 3. “Eastern Cape aims to create thriving economy through legalisation of Cannabis”. Business Report. Available at www.iol.co.za/business-report/economy/eastern-cape-aims-to-create-thriving-economy-through-legalisation-of-cannabis-30185791
- Ndenze B. 2019, July 3. “Major drop in dagga arrests following legalisation – SAPS”. Eye Witness News. Available at https://ewn.co.za/2019/07/03/major-drop-in-dagga-arrests-following-legalisation-saps
- Preuss D & Preuss H. 2019, June 23. “A considered approach to cannabis investment”. Business Report. Available at www.iol.co.za/business-report/economy/a-considered-approach-to-cannabis-investment-26708473
- Mabuyane L. 2019, June 15. “We have a choice to either join the emerging cannabis economy or stand by and watch”. City Press. Available at https://city-press.news24.com/Voices/we-have-a-choice-to-either-join-the-emerging-cannabis-economy-or-stand-by-and-watch-20190615
- Werksmans Attorneys. 2019, June 10. “The opportunities to create new brands for cannabis-based products appear endless”. Polity. Available at www.polity.org.za/article/the-opportunities-to-create-new-brands-for-cannabis-based-products-appear-endless-2019-06-10
- Sihlobo W. 2019, April 8. “Should South Africa explore the cannabis market?”. Available at https://wandilesihlobo.com/2019/04/08/should-south-africa-explore-the-cannabis-market-2/
- Reporter. 2019, April 3. “House of Hemp 1st Medical Cannabis License in South Africa”. Dube Tradeport. Available at www.dubetradeport.co.za/News/7/Press%20Releases%20and%20Statements/70243/HouseofHemp1stMedicalCannabisLicenseinSouthAfrica
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