‘The cannabis industry in SA is touted as a potential saviour of the country’s ailing economy. There is R107bn of value in the local industry waiting to be unlocked.’

Labat Healthcare’s Herschel Maasdorp points to Prohibition Partners’ 2019 African Cannabis Report, which forecast the South African medicinal cannabis market value and the recreational cannabis market value at R11bn and R20bn by 2023 respectively.

‘The projected growth rate is 28.4%,’ he says, warning that while SA enjoys a strong head start compared to others, it remains in the very early stages of ironing out the various legal, political, economic, regulatory and social obstacles standing in the way of its potential.

‘SA needs to urgently address the constraints standing in the way for the country to begin reaping the fruits of the local industry’s potential.’

In his opinion piece on the Mail & Guardian Online site, Maasdorp says ever since the Constitutional Court decriminalised cannabis in 2018, discussions around regulation have continued. The Cannabis for Private Purposes Bill was drawn up and is still waiting on Parliament to be ratified.

The Department of Agriculture, Land Reform & Rural Development presented Parliament with a master plan in 2021 detailing how cannabis can be incorporated into the business sector. However, he says the legal cogs have been grinding ‘achingly’ slowly.

Maasdorp says an enabling framework needs to be developed as soon as possible.

Growers can be involved in every part of the value chain, while businesses can obtain a licence to grow, cultivate and export cannabis.

‘All levels of government are saying how much money can be made out of cannabis. But they will not make that money if the legislation is not changed.’

He says cannabis can be regulated through the Drugs Control Amendment Act or decriminalised through safety and security legislation.

‘All of these different regulations were amended and can be re-issued specifically for the cannabis sector to inform the commodity’s commercial trajectory.’ 

He believes the absence of a sophisticated policy framework is an indictment on government and state agencies.

‘In SA, we should have, by now, a recommended price per gram of different profiles of cannabis, for different markets and purposes. And from the specific price point each constituent in the value chain gets their share.’

Maasdorp concludes: ‘If we can get the laws right, market enablers and the regulations aligned, we can attract the ideal investors. When that happens, cannabis can begin to navigate its way out of the dark alleyways of the illicit trade and into the formal economy, as a legitimate economic category.’

Full analysis on the Mail & Guardian Online site