Tag: south africa

New, pro-business cannabis reform has been prioritized by President as a means of economic development and post-Covid rescue of the economy

South Africa’s President, Cyril Ramaphosa said in his state of the union speech last week that cannabis reform in the country is now at the top of the economic development agenda. He specifically cited that the industry, which is on track to create over 130,000 new jobs, needs a regulatory structure to flourish, but that it held a bright promise for the country.

Cannabis reform has been on a slow, but steady track towards progress here. In September 2020, a much-criticized bill was introduced in Parliament, but a combination of Covid and other issues with the legislation has slowed its passage down.

No more. Rampaphosa is on a campaign to change all that.

“We want to harness this,” he said. “We are going to fast-track policy and regulations for the use of cannabis for medical use, especially in the Eastern Cape and KwaZulu-Natal.”

Cannabis Reform in Africa

South Africa of course, is jumping on a bandwagon led regionally by Lesotho, Zimbabwe, Uganda, and Morocco. 

The entire industry represents a tantalizingly valuable, renewable commodities market for which the rest of the world is developing a large appetite. The European and Israeli medical markets (for starters) represent a destination for African-grown cannabis that is unlikely to abate, particularly given both the costs and hostility towards full reform that still exists at least within the EU (in official circles at least).

Beyond this, there are clearly other huge possibilities dawning for an intra-Africa industry that are drawing investors globally, but particularly at this point from North America and increasingly, Europe. 

Beyond the medical and consumer’s market for edibles, the industrial hemp vertical is also being examined as a way to do everything from cleaning up pollution left by gold and diamond mining to creating cheap and planet-friendly construction materials.

The Race for Cannabis Reform

Africa, in fact, represents one of the more interesting cannabis frontiers now. American, Canadian, and European investors are flocking to opportunities in the cultivation and extraction space. Israel beat everyone to the punch by importing early. North Macedonia too has been a regular client. Germany began importing from the Dark Continent last year.

The question, however, so far, is where are the Chinese?

One thing, however, is crystal clear. As in the last African “Age of Exploration,” an international group of investors is now looking at opportunities of the cannabis kind all over the continent. And that in turn, is helping to seed an industry that took root long ago. This time, of course, it will be of the legal, certified kind.

Be sure to book your tickets to the upcoming International Cannabis Business Conference events in Barcelona, Berlin, and Zurich as well as the Global Investment Forum in Berlin this summer!

Cannabis reform is spreading across the African continent slowly but surely. There’s still a tremendous amount of work left to be done, but the momentum for the cannabis movement in Africa is greater than ever.

The country where that is most evident is probably South Africa. In 2018 South Africa’s top court issued a ruling that determined that cannabis prohibition was unconstitutional.

The Court’s ruling is similar to rulings that were issued in Mexico and Italy. Both of those countries have yet to fully implement the courts’ rulings via legislation.

The same is true for South Africa, although a ‘cannabis master plan’ is apparently on its way. Below is more information about it via a government press release:

The Department of Agriculture, Land Reform and Rural Development (DALRRD) is on the verge of presenting a Cannabis Master Plan to Nedlac.

DALRRD Minister Thoko Didiza says as the legalisation and the commercialisation of cannabis remains at the forefront of public debate and on top of the agenda for policymakers globally, the plan will be presented to the National Economic Development and Labour Council (Nedlac) by the end of May 2021.

The Minister said this when she tabled the department’s budget vote in Parliament on Thursday.

She said this was one of several masterplans that the department will finalise as part of setting targets and implementing interventions to increase production in the sector.

“An inter-departmental team comprising representatives from various departments was established to guide the development of the National Cannabis Master Plan with [the department] as the convener.

“The Cannabis Master Plan is being presented to Nedlac before the end of May 2021.  The department will, as of October 2021, begin issuing and monitoring permits for the production of hemp in South Africa,” she said.

Interventions to bolster production

Didiza said in order to increase local production in the sector, a combination of interventions as well as different support systems will need to be implemented to realise this vision.

These includes:

• Increasing land under production. This will mean cultivating land that has been given to individuals and communities through our land reform program and those in communal areas.
• Strengthening the extension and advisory services by employing capable individual Officers;
• Collaborating with the private sector and individuals who are willing to be mentors as well as able to give agreements to those who produce;
• Strengthening government’s agri-financial services to support production;
• Improving agricultural Research. The Agricultural Research Council will utilise the Parliamentary Grant to focus on the development of scientific solutions, inclusive of the development of new technologies and crop varieties, enhancing the quantity and quality of agricultural produce, devising climate change adaptation and mitigation strategies, increasing sustainability, reducing consumer food prices.

The country is looking to the industry to help revitalize an economy wrecked by Covid.

South Africa is lining up to join the list of recreational cannabis companies by 2023. The country is now considering a bill to legalize the possession, cultivation, and use of cannabis for recreational use with this date in mind.

The reason, besides the medical market and thriving underground black market? The country’s economy is suffering from the effects of the Pandemic.

This one factor is likely to be the driver in stepping up the plans in many countries – and far beyond Africa, in finally engaging the cannabis reform discussion at the recreational end of the discussion.

In South Africa’s case, this is also likely to have an impact not only on the domestic economy as well as exports, particularly to Europe, but other countries in Africa.

The Shifting International Recreational Picture

By 2023, at least two countries in Europe will be in the middle of a recreational trial. Holland’s recreational model will presumably have had time to bake, and France will be in the thick of its own medical experiment. Germany will also presumably have moved forward on its own cultivation plans.

That creates a lot of markets looking for certified product. Further, it begins to create a multi-use market where it is not only medical in the picture. And that all must come from someplace.

South African firms are beginning to export to Europe. The German market, however, by 2023, will not be the only one on the table. And that is potentially where enterprising South African firms might make a difference – especially given the slow pace of development of cultivation across the EU and that it has been slowed by Covid.

And then of course there is the appeal of canna tourism. With a recreational market in full swing, the South African economy will potentially become a place where the entire discussion will take a new turn.

Regardless, no matter what direction the industry begins to morph into, the development is a positive one and promises many sunny returns, no matter how they begin to trickle in.

Be sure to attend the International Cannabis Business Conference this year in Berlin when it returns in July.

As it stands only Canada and Uruguay have legalized cannabis for adult use. The two nations’ legalization model differs in many ways, however, both countries permit the possession, cultivation, and legal sales of adult-use cannabis in one way or another.

Many other countries are exploring ending cannabis prohibition within their borders, and Mexico and Italy have court decisions in place that require legalization to be implemented. Neither Mexico nor Italy has seen its lawmakers step up and successfully pass a legalization measure.

One country that is not on many people’s radars when it comes to legalization is South Africa. South Africa’s Parliament has been in discussions to legalize cannabis for adult use for a while now and was set to vote on a legalization measure in order to comply with a 2018 court ruling.

Unfortunately, it appears that the vote will not happen, at least not by the initial deadline of September 17. Below is more information about what is being proposed, per Business Day:

According to the Cannabis for Private Purposes Bill, the maximum quantity allowed for possession for personal consumption will be 600g of dried cannabis or cannabis equivalent per adult, or 1,200g per dwelling occupied by two or more people. The maximum permissible quantity in a public place will be 100g.

In terms of cultivation no more than four cannabis plants can be grown per adult or not more than eight plants in a dwelling occupied by two or more people. Dealing will remain prohibited, as will smoking cannabis in public.

It is unclear at this time if/when the measure will get another chance at a vote. With a court ruling having been previously handed down, it’s fair to assume that a legalization measure will eventually be passed and implemented in South Africa.

With that being said, the effort to legalize in South Africa could linger on for a while. After all, the process involves politicians, and politicians are not exactly the most efficient when it comes to getting things done.

As of right now, there are only two countries that have legalized cannabis for adult use. Uruguay was the first (2013) and Canada was second (2018).

Two other nations, Mexico and Italy, have court rulings in place that mandate the implementation of a regulated adult-use system, however, compliance with the court decisions has yet to occur in those countries.

A handful of other countries, including the Netherlands, are exploring pilot programs to ‘test the waters’ of cannabis legalization. Assuming that the pilot programs are launched and prove to be successful, those nations could end up legalizing cannabis for adult use sooner rather than later.

One nation that appears to be moving in the right direction is South Africa. South Africa’s cabinet recently approved a measure that would legalize personal cannabis consumption by adults. Per Business Tech:

“This Bill regulates the use and possession of cannabis and the cultivation of cannabis plants by an adult for personal use.

“It provides the limit of the quantity of cannabis that may be possessed by an adult and criminalizes the smoking of cannabis in public places. ”

The bill will have to face parliamentary consideration and a public consultation process before being signed into law.

Cannabis prohibition is a failed public policy no matter where it exists, including in South Africa. The cannabis plant has been found to be 114 times safer than alcohol, and if alcohol can be used responsibly and legally by adults in South Africa, the same activity should be allowed when it comes to cannabis.

The odds of the measure making it all the way to becoming law is unclear at this time. As previously noted, there are additional steps that have to be overcome in order for the measure to get to the finish line, and there will no doubt be hurdles that pop up. However, the measure moving forward via the recent vote is definitely encouraging.

Unlike politicians in other places, South Africa’s President Cyril Ramaphosa included cannabis in his State of the Nation address. Specifically, Ramaphosa linked cannabis initiatives to stimulating a sluggish economy.

How many in the industry (see the U.S. and Europe right now) to hear their national politicians saying something like this:

“This year we will open up and regulate the commercial use of hemp products, providing opportunities for small-scale farmers; and formulate policy on the use of cannabis products for medicinal purposes, to build this industry in line with global trends. The regulatory steps will soon be announced by the relevant ministers”.

Imagine Donald Trump saying something like this. Or on the European side, people like Angela Merkel and Emmanuel Macron (the presidents of Germany and France).

Sometimes you have to go to another of the world and dream about what is possible, even if not at home yet. Although in this case, South Africa is only about two years ahead of the same conversations in the “more developed West.”

The Impact Of South Africa

With strong ties both to its African neighbors and trade routes developed to the UK and Europe, South Africa is in a catbird seat to begin to pick up major export with all of the above. Competing on price, of course, with local hopefuls in Southern Europe is one thing. The African trade is another. 

Understanding, however, how to import from such distant places is not without its steep learning curves – if not expensive long-distance flights. Meeting the right people and finding the right partners is the key to building a business no matter where the source and or supply chain is ultimately located.

With a shortage of medical cannabis in the room in Germany and an upping of the rules (certifications for radiation have hit the mainstream so everyone has to be cognizant of that in the medical market), foreign markets like South Africa will also increasingly be on the radar.

Source of Certified Product Counts

Understanding the rules, and knowing how to properly get certified for the European market is one big battle that everyone faces from the foreign side. Communicating market needs and trends is the other issue from the buyer side is another matter.

That is also why face-to-face contact, at one end or the other or both, is a requirement at this stage, and not an option.

For the best cannabis industry networking on the planet, be sure to book your tickets now for the International Cannabis Business Conference 4 – returning to Barcelona, Berlin and Bern as of March 2020! Check our conference schedule. Also, be sure not to miss our panels focusing on export/import.