By: Edward Tsumele
The potential viability of the new emerging cannabis industry in South Africa and some of the countries on the African continent that are currently reviewing legislation around cannabis cultivation and its extractive sub-sector, is aptly illustrated by the success of Biomuti in South Africa.
Founded in 2016 by former South African expatriate working in Thailand for nine years and China for five years, Tebogo Tlhopane, the cannabis start up in its first trading year, the 2018/2019 financial year, made R500 000 profit, and in the 2019/2020 financial year, it increased its profit margin three fold, making 1.6 million.
Tlhopane revealed these facts about his company’s success so far in an exclusive interview with Cannabis Business Africa . This profit giant leap for Biomuti was apart from its aggressive marketing through their online store, www.biomuti.co.za as well as trading at Johannesburg’s popular weekend markets (before Covid-lockdowns were implemented), was also aided when the South African Health Products Regulatory Authority (SAHPRA) relaxed regulations pertaining to CBD – the manufacture and selling infused products.
The trade in these hemp derived products which has limited, almost negligent THC content, the one that makes consumers ‘high’, came as a result of South African Health Products Regulatory Authority (SAHPRA ) rescheduling CBD from Schedule 4 to unscheduled for 12 months (that has since been extended since May 2020), opening the way for many products to be unleashed onto the market by the new cannabis entrepreneurs.
. “This is an industry that needs to be supported by the authorities by reviewing legislation so that opportunities for entry into this business can open up, especially to benefit small community farmers especially in the rural areas that in any case have been farming cannabis (illegally) for years.
“One way of doing this is to take away cultivation from the Department of Health, the control of the cultivation of the cannabis plant and place it in the Department of Agriculture and Rural development, and make the cultivation of the plant open to any farmer interested in farming it.
The legislation should only kick in when it comes to what one intends to do with the plant, for example when one starts extracting elements from it for example, to manufacture and trade in CDB infused products,” the business man told Cannabis Business Africa.
And he has advice for regulators around the issue of making the cannabis business easy for small players to participate.
“Although Biomuti has a GMP (Good Manufacturing Practice) compliant farming facility and laboratory, If government allowed small scale community farmers to cultivate cannabis unrestricted by stringent regulations, as it is currently the case, Biomuti would source cannabis from small commercial farmers apart from sourcing such supplies in-house from their farm.
We would do this because number one, it would mean that we are expanding our supply chain and number two, we would be creating the much –needed employment in the country,” he said.
Tlhopane sees a lot of potential in the cannabis business.
“This industry is helpful to the country from both wellness perspective as well as from the economic perspective. Without making medical claims, the response we get from our customers who use our products that range from cosmetics, edibles, and supplements, is hugely positive. And as members of the Cannabis Traders Association, an industry lobby and self-governing body our products are of a high standard, meeting international standards when it comes to the quality that customers get.
It is important for the industry to self-regulate, making sure that members stick to set standards, among other things, making sure that the products they sell to the public are what they say they are. Having a self-governing body that gives quality assurance means that those members who do not meet the standard face consequences, and self-regulating is important given the fact that SAHPRA does not have the resources and the capacity to monitor every cannabis business to make sure that they meet certain quality standards,” said the chief executive officer of Biomuti, who is also the chairman of the Cannabis Traders Association.
One of the issues that the industry often complains about is the issue of the maximum THC content of 0.001 percent that currently applies to Cannabis infused products in South Africa, that is even more stringent than other countries such as Canada. Tlhopane also added his voice to this on-going debate on the issue.
“The thing is we should not have a situation where we cut and paste from existing models such as those in Canada as these countries’ socio-economic situations are different from ours. We should not take everything in those models, but must take what suits us and move on and develop this industry. ‘For example If you plant the high CBD cannabis plant on the African soil, its THC content automatically rises to 1 percent because of abundant sun and good soil, whereas in Canada and the US it only goes as high as 0.3 percent.
Tlhopane who for the past 20 years has acquired extensive managerial skills working in the various industries around the world including Thailand and China, says he became home sick and decided he was going to come back home with his Germany wife and two children.
“When I came back in 2016,I had two business plans, one to get into the diamond industry, and plan B, to get into the cannabis industry as I had extensive knowledge in both industries. However the stringent rules in the diamond industry proved to be a barrier to entry, especially for new entrepreneurs with limited resources to hire experts to deal with the regulatory hurdles.
So the only way open for me was to get into the cannabis industry, starting off by importing hemp as at that time the laws of the country did not allow cultivation locally. I started off by making my own concoction in my kitchen to deal with an ailment I had, and it worked. Now we are working with pharmacists, and what started off as a family business has now attracted other investors,” he revealed.