Cannabis is here to stay since the September 2018 Constitutional Court rule that it is not a criminal offence for an adult citizen to use, possess or grow cannabis in private for personal consumption.
Ever since that, individuals, groups and even nations have been exploring its various economic benefits. Also, provinces in South Africa have realised the economic potential of the cannabis industry to the economy if it is properly regulated and the product is rescheduled as an agricultural crop rather than a drug as it currently is.
In this regard, Gauteng premier David Makhura has announced that the provincial government will be venturing into the cannabis industry. Makhura tabled this at his state of the province address (Sopa) on Tuesday morning, where he stated that the industrialisation of cannabis targeting healthcare and skincare could be lucrative for the province.
For Makhura the industrialisation of cannabis as a new industry has great potential and will create jobs. “Our first and foremost economic goal is to grow the economy in order to massively increase the number of new jobs, while sustaining existing jobs in Gauteng. Our number one goal is to create jobs.”
“There is a huge sector in our economy … any country that forgets about it will be left behind; that is the cannabis industry,” said Makhura
Makhura’s announcement followed President Cyril Ramaphosa’s state of the nation address’ (Sona) speech, in which he endorsed regulating the commercial use of hemp products and the formulation of a policy that supports the use of cannabis.
“We in Gauteng will focus on industrialisation and agro-processing of the cannabis industry, and unlocking the cannabis industry, especially for use for medicinal purposes and many broader areas, such as health care, including skincare. I don’t want to be part of those who want to use it for other things,” said Makhura.
It is envisaged that this will create 100 000 jobs in the next five years and facilitate the development of 50 black industries.
Similarly, the Eastern Cape province has approved the setting up of a cannabis college towards the development and commercialisation of cannabis. The Rural Development and Agrarian Reform MEC Nomakhosazana Meth proposed this before the provincial Parliament recently.
“The provincial government has accepted the proposal. There is a lot to be put in place first, things such as the legislative framework, the licensing regime and removing longstanding stigma. A building has already been identified and it is awaiting the final legislative processes to be in place,” said Ayongezwa Lungisa, spokesperson for rural development and agrarian reform.
Also, “the Eastern Cape government has taken a decision to support and facilitate legitimate production of cannabis in the province for the growth and transformation of its economy. Cannabis stakeholders in the province resolved that, among other things, the provincial government would facilitate investors and markets, support farmers with hemp permits, and assist in reviewing the South African cannabis legislation to support the production of cannabis,” Lungisa told City Press.
Meth has already engaged investors in Canada, which is one of the fastest-moving countries towards relaxing cannabis legislation and allowing for its commercial production. Eastern Cape is endowed naturally with cannabis.
Lesotho’s South Africa neighbour is already reaping rewards in the cannabis industry and exporting the product to Canada. Cannabis companies in Canada are listed on the stock exchanges.
The global legal cannabis market size is expected to reach USD 73.6 billion by 2027, according to a new report published by Grand View Research, Inc. It is anticipated to expand at a CAGR of 18.1% during the forecast period. Increasing legalization of cannabis for medical as well as adult-use is expected to promote growth.
Based on geography, North America held the largest revenue share at 88.4% in 2019, owing to the increasing legalization of medical marijuana and liberalism of government regulations regarding the same. The legalization of medical cannabis Canada, Israel, and some countries in Europe and South America, owing to its multiple therapeutic applications is expected to promote the growth. Moreover, the recent legalization of cannabis for medical purposes in countries like Australia, Germany, and Poland is expected to create lucrative opportunities for market stakeholders.
Key players operating in the legal marijuana market include Aurora Cannabis; Canopy Growth Corporation; Maricann Group, Inc.; GW Pharmaceuticals, plc.; Aphria, Inc.; Tilray; The Cronos Group; ABcann Medicinals, Inc.; Lexaria Corp.; and Organigram Holding, Inc.
[Credit: Grand View Research, Inc. and City Press]
Additional Report by: Ifedayo Oshin