BY Edward Tsumele
Cannabis entrepreneurs are ready to invest in the cannabis industry and the only thing that is delaying this is the slow pace of the establishment of a regulatory framework, delegates to a cannabis Opportunity virtual cannabis conference hosted by GIBS at the University of Pretoria and Cheeba Academy Yesterday, June 24, 21 were told. The conference looked at opportunity in the growing emerging cannabis industry estimated to be worth billions of dollars annually
“Just to put it into context, the cannabis industry is estimated to be worth R103 billion dollars globally by 2024, and in South Africa it is estimated at R27 billion by 2023.Tthat is how big it is,” said Trenton Birch, the founder of Cheeba Cannabis Academy, the country’s first cannabis school based in Vaal Triangle in Sedibeng.
Tebogo Tlhopane, one of the loudest voices in the cannabis sector, especially when it comes to the issue of the slow pace of the development of the legal framework and the restrictive current legislation as enforced by the South African Health Products Regulatory Authority (SAHPRA), called on government to quicken the pace of the establishment of the cannabis legal framework that will regulate the industry, otherwise the global ship was about to bol and leave South Africa behind.
“Open the legislation and let the cannabis industry grow. As a country we are ready for this business as South Africa is in a much better position to do well in this industry as compared to the rest of the other countries in Africa because we have the infrastructure, the skills and our financial system is quite advanced. South Africa has good skills in the pharmaceutical sector, botanicals sector and laboratory capacity and research, ” Tlhopane said.
The founder and Chief Executive Officer of cannabis start up Bio-Muti and also the chairperson of the industry association Cannabis Traders Association Africa (CTAA), a voluntary association whose members are players in the cannabis industry said that unlike what happened with the mining industry, which saw raw gold and diamonds being exported overseas only to come back to the country as finished products with a higher price mark up, the local cannabis industry would not like to see that replicated in their sector.
“We should not allow these products to be shipped out without beneficiation like what happened with diamonds and gold,” he said.
Sibusiso Xaba a former London banker-turned entrepreneur in the cannabis industry, and whose company Africa Cannabis Advisory Group offers cannabis related services and solutions to both the private sector and governments in Africa, said that South Africa lost investors to Lesotho due to the lack of cannabis regulatory framework in the past three years.
“What we have seen is that three years ago, there was a lot of interest by foreign investors in the local cannabis industry, and who were ready to invest in it. But that changed a year ago as such companies instead of investing in South Africa, invested in Lesotho, which was quick to develop its legal framework in the medical cannabis sector. They were luck that they saw what was happening overseas, especially in Canada when the country legalised cannabis,” said Xaba.
This is the same view shared by Pierre van Hoven, joint Chief Executive officer of the country’s first cannabis fund, Silverleaf, which launched a few months ago in which even small investors were offered an opportunity to participate.
“South Africa has a good cannabis story to tell and that is strength. The problem though is that we are coming from a negative narrative that says that the regulatory environment is a mess. In fact that is what foreign investors who wanted to invest in South Africa found out. They actually told others that do not invest in South Africa because the regulations are a mess. Instead invest in Lesotho, they told other would-be investors,” said van Hoven.
Cannabis industry publisher Brett Hilton Barber said that the real value in the cannabis industry, and which If planned well with regards to the regulatory framework would see meaningful broad based participation of especially rural based folks, who in any case are experienced in the growing of cannabis, is the recreational cannabis sector.
“Unfortunately government policy makers are not prioritizing that aspect of the industry with regards to regulations. Recreational cannabis is in fact where money is as already there is a huge market for recreational cannabis in South Africa, which the government has not grasped and is reluctant to go into, simply because there is stigma around cannabis as a gateway to hard drugs such as cocaine, which is incorrect. We have conservative people in this country who are predisposed towards autocracy. And yet the participation of rural people who have perfected their skills in growing some strains of cannabis in the Eastern Cape and in Kwa-Zulu-Natal, where the country has become famous for growing the Durban Poison strain, is crucial in this industry, especially because we risk the danger of causing racial division If it is not properly addressed. It would also take care of the issue of inclusiveness and social equity, which is a big issue in the overseas cannabis market right now,” Barber said.
The Department of Agriculture, Land reform and Rural development in March released a national Cannabis Master Plan that it presented to industry stakeholders as a consultation process. The cannabis plan was developed in consultation with other relevant departments of government such as the Department of Justice and the department of Police. That plan is part of a stakeholder discussions at Nedlac, which commenced this week on Wednesday, 23, June 2021.
“The problem though with what is happening is that at all these webinars to discuss the way forward with regards to the cannabis master plan, two important government departments are never there and these are the Department of Police, who right now are continuing to arrest people for cannabis related crimes, and the department of Justice,” complained Barber.