Prohibition Partners published its African Cannabis Report in 2019 and predicted that by 2023, the medical and recreational cannabis markets in South Africa will each be worth R11 billion and R20 billion, respectively.
The nation is in a position to take the lead in this competitive industry. South Africa has a significant competitive advantage over its rivals, a positive reputation abroad for the caliber of its output, and is ranked first in Africa for technical proficiency and production cost.
However, it is still extremely early in the process of removing the myriad social, political, economic, and legal barriers preventing it from reaching its full potential.
It is a powerful force to be reckoned with because to its favourable environment, regulations, arable land, and prior expertise in farming and hemp cultivation.
As the medicinal cannabis sector in South Africa expands globally, certain developed economies and sophisticated markets have not been reluctant to express their trust in it.
For instance, Germany has lately emerged as the most established market for the use of cannabis to treat medical ailments, and within the next 12 months, adult-use cannabis will be legalised there as well. In order to get medicinal cannabis products, a number of European nations have also turned to South African growers.
In order for South Africa to start enjoying the benefits of the indigenous industry’s potential, the government urgently has to eliminate the obstacles in its path.
There have been continuous talks over regulation since since the constitutional court decriminalised cannabis in 2018. The Cannabis for Private Purposes Bill was created and is now awaiting ratification by parliament. A master plan outlining how cannabis may be integrated into the commercial sector was given to parliament by the minister of agriculture, land reform, and rural development in 2021.
President Cyril Ramaphosa also stated in the State of the Nation Address from the previous year that the government is attempting to streamline the cannabis regulating process, which has the potential to create 130 000 employment. But the legal wheels have been turning agonisingly slowly.
To include growers at every step of the value chain, an enabling framework must be created as soon as feasible. Businesses in South Africa can get a license to cultivate, grow, and export cannabis. Government officials at all levels discuss the potential financial rewards of using cannabis. But if the law does not change, they will not be able to profit.
Cannabis has a reputation as a narcotic associated with illegal trade, which contributes to the slow regulatory procedure. Because of marijuana’s historical reputation and the fact that it is still not recognised as a new and developing economic sector, development banks and potential funders are hesitant to participate in the industry.
A sophisticated policy framework’s absence is a direct criticism of the federal and state governments. We need to have established a suggested price per gram of various cannabis profiles in South Africa by now for a variety of markets and uses. Each link in the value chain receives a portion of the proceeds from the particular price point.
The cannabis sector may find itself in a similar predicament as the wine industry, when high-quality products were underpriced for the global market, as a result of the new auditing standards. South African businesses shouldn’t let the price of our product be determined by the global market.
South African businesses shouldn’t let the global market determine the cost of their product. By settling on a pitiful price point to meet their wants, we shouldn’t put ourselves in danger. We face the risk of turning into the backyard of the international cannabis-based medicinal sector.
The views expressed do not necessarily reflect those of Newsnote.