Will hemp in South Africa drive economic recovery after COVID-19?
We’ve covered how to get a cannabis cultivation licence in South Africa, but recent news about cultivating hemp in South Africa has revealed some exciting improvements ahead. The fifth version of South Africa’s National Cannabis Master Plan (NCMP) frames hemp and marijuana cultivation as potential economic drivers that could help relieve poverty and revive the agriculture industry.
The Future of South African Cannabis Regulation
The proposed 5th version of the NCMP covers both marijuana and hemp and seeks to establish a national hemp program by 2023. It is currently in a public comment period. The plan touts public-private partnerships and proposes eight pillars to support the new legal cannabis economy:
- Effective Regulatory Systems
- Sustainable Seed Supply Systems
- Research Development and Innovation
- Producer Support Systems
- Market Development
- Enterprise and Supplier Development
- Manufacturing and Product Development
- Education and Training
The purpose of the master plan is to provide a broad framework for the development and growth of the South African cannabis industry in order to contribute to economic development, job creation, inclusive participation, rural development and poverty alleviation.South Africa’s National Cannabis Master Plan (Version 5)
South African cannabis regulators want to participate in the global cannabis market while creating economic opportunities for impoverished and rural citizens. The current cannabis market in South Africa is mostly a recreational black market with an estimated value of 28 billion Rand. Recreational cannabis legalization and legal hemp cultivation already have market demand. The local cannabis variety termed ‘dagga’ (also used to refer to marijuana in general) has long-standing traditional use there and is estimated to have as many as 3.5 million current users. The climate is also well suited for outdoor cannabis and hemp cultivation.
Growing Hemp in South Africa
Around 1999, the South African government began investigating the viability of hemp cultivation. While climate conditions are favourable to cultivation, there are financial barriers for farmers seeking to grow hemp. Security requirements and regulatory compliance can be especially costly. Currently, South Africa imports hemp products from other countries. The demand clearly exists, but local production needs a sustainable system in order to make domestic production possible. In May 2020, the government rescheduled the cannabinoids THC and CBD. They redefined industrial hemp with a 0.2% THC guideline. Now they are taking the next steps to make local hemp cultivation possible.
Growing Dagga in South Africa
Dagga is a term for marijuana that is commonly used in South Africa. The illegal cultivation and trade of dagga have been an important source of income in poor and rural areas of South Africa and it has a long history of traditional use in South African culture. The government understands this perspective and has taken measures to decriminalize dagga in its efforts to integrate townships into the formal economy.
Private use and cultivation of cannabis were decriminalized in 2018. With it now being legal for people to grow their own dagga at home, illegal indigenous growers worry that they will lose income. The current medical cannabis pilot program does not seem to offer much for illegal indigenous growers. It has also relied on imported cannabis seed because local seed trade is still prohibited. The new version of the NCMP seeks to address these issues of social equity and establish a national supply of cannabis genetics.
Hemp in South Africa: Stepping into the Global Cannabis Market
In order to achieve a sustainable hemp program that promotes social equity and economic growth, the NCMP aims to meet three key objectives by 2023. Those are:
- Declare hemp as an agricultural crop
- Make amendments to the Drugs and Drug Trafficking Act
- Develop new policy and legislation for the commercialization of hemp and dagga
The government of South Africa is sincerely hopeful that these steps will help revive the economy, which has been suffering in light of the impacts of COVID-19. They project that a fully legal recreational marijuana and hemp program could create up to 25,000 jobs, and generate $1.9 billion in revenue per year.
To achieve these benefits and unlock the full economic potential of cannabis, lawmakers are taking aggressive measures to create a legal infrastructure through the new version of the NCMP. They know they must unite a highly fragmented market, increase manufacturing capacity, and invest heavily in research and development. The most critical challenges they are facing are to secure stable cannabis genetics, lower economic barriers of entry to the market, and prevent big cannabis conglomerates from taking over the market.
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