Africa’s Cannabis Frontier: South Africa’s Permit Landscape and Lesotho’s Export Ambitions

What does this mean for the global cannabis industry?

Africa’s cannabis story is being written from two flanks simultaneously. In Pretoria, a multi-departmental government machine is turning a National Cannabis Master Plan into regulations with real teeth — 1,408 hemp cultivation permits on the ground, 83 SAHPRA medicinal licences active, and a presidential mandate to make South Africa a global leader in commercial cannabis production. Two hours north by road, the Kingdom of Lesotho — the continent’s first mover, first to issue a legal cannabis licence anywhere in Africa in 2017 — is dismantling its existing regulatory architecture and rebuilding it from the ground up, installing two new oversight bodies and publishing its most comprehensive licensing amendments since the industry’s founding.

The Africa medical cannabis market was sized at USD 1.9 billion in 2025 and is projected to reach USD 8.2 billion by 2034, growing at a compound annual rate of 17.2%, according to IMARC Group analysis spanning six key African jurisdictions: Lesotho, Zimbabwe, South Africa, Ghana, Zambia, and Malawi. The continent’s legal cannabis framework is no longer embryonic. It is operational — but it remains uneven, fragmented across jurisdictions, and laden with structural challenges that separate credible investment opportunities from regulatory mirage.

This analysis examines the two African markets drawing the most sustained international attention in 2026: South Africa, where the regulatory scaffolding is being constructed faster than at any point in the country’s cannabis history, and Lesotho, where a decade of hard-won export infrastructure is being stress-tested by governance reforms, compliance tightening, and the competitive pressure of better-capitalized neighbouring markets. For investors and operators evaluating Africa’s cannabis frontier, the regulatory details in both countries are not background noise — they are the investment thesis.

South Africa: Two Regulatory Tracks, One Industry

South Africa’s cannabis regulatory environment is unlike any other in the world — not because of its complexity, but because of its deliberate duality. Two entirely separate permitting systems govern the sector, managed by two different government departments, operating under different legislation, with different fee structures, different THC thresholds, and different strategic objectives.

Understanding this architecture is non-negotiable for any operator considering South Africa.

Track One: DALRRD Hemp Permits

The Department of Agriculture, Land Reform and Rural Development (DALRRD) manages industrial hemp cultivation under the Plant Improvement Act. Since hemp was declared an official agricultural crop, DALRRD has issued 1,408 cumulative cultivation permits as of September 2025, up from 1,110 permits in September 2024 — a 27% increase in twelve months.

Each permit authorises cultivation of up to 50 hectares. The application fee is R902. The regulatory requirements cover cultivation, propagation, breeding and research, seed cleaning and conditioning, sale, import, and export under a system designed to treat hemp as an agricultural commodity rather than a controlled substance.

The most consequential development in this track: on December 1, 2025, South Africa activated the revised Plant Improvement Act and its accompanying regulations via Government Gazette No. 53707, raising the legal THC threshold for industrial hemp from 0.2% to 2% in leaves and flowering heads. This makes South Africa the only jurisdiction in the world permitting more than 1% THC for industrial hemp — a decision driven in part by the practical reality that South Africa’s intense UV radiation causes naturally elevated THC levels in hemp plants, rendering the 0.2% threshold commercially unworkable for many growers.

Provincial permit distribution is uneven. KwaZulu-Natal leads nationally with 664 permits and has committed R47 million to cannabis research alongside R120 million in facilitated investment commitments. The Eastern Cape has set a production target of 100,000 hectares. These are not projections from consultancies — they are provincial government commitments backed by budget allocations.

Track Two: SAHPRA Medicinal Cannabis Licences

The South African Health Products Regulatory Authority (SAHPRA) operates the second regulatory track: Section 22C(1)(b) licences for the cultivation and manufacture of cannabis for medicinal and research purposes under the Medicines and Related Substances Act.

Since 2022, SAHPRA has issued 83 cannabis cultivation licences, 4 manufacturing licences, 120 export licences, and 30 research permits. As of February 2025, 93 licensed establishments are active. The licence application fee is R25,200 and the process typically requires 12 to 24 months — with documented cases running to four years for complex operations requiring full Applicant Drug Master Files.

SAHPRA’s mandate is explicit: these licences cover medicinal and research purposes only. Current legislation does not permit SAHPRA to issue licences for non-medicinal commercial cultivation, including food supplements. This legislative boundary is not an oversight — it is the designed architecture ahead of the forthcoming Overarching Cannabis Bill.

The Permit Landscape at a Glance

Sources: DALRRD / SAnews.gov.za (September 2024); SAHPRA; DTIC / thedtic.gov.za; GrowerIQ South Africa Hemp Cultivation Regulations 2026

The Cannabis for Private Purposes Act: Not Yet in Force

International investors often conflate South Africa’s public decriminalisation narrative with commercial licensing reality. The distinction matters enormously.

The Cannabis for Private Purposes Act 7 of 2024 was signed into law by President Ramaphosa on May 28, 2024. It addresses personal use rights — the direct consequence of the 2018 Constitutional Court ruling in Minister of Justice and Constitutional Development v Prince that found the criminalisation of private cannabis use unconstitutional. The Act does not establish a commercial licensing regime. Commercial cultivation and sales remain prohibited under this legislation.

The Act cannot take legal effect until the President issues a commencement proclamation in the Government Gazette. That proclamation requires finalised regulations. On February 2, 2026, the Department of Justice and Constitutional Development published draft regulations for public comment, proposing that adults may possess up to 750 grams in a private place at any time, and cultivate no more than five plants simultaneously. The public comment period closed on March 5, 2026. Parliament must approve the final regulations before they take effect.

Commercial regulation sits entirely outside this Act. The Department of Justice confirmed in the draft regulations statement that commercial cultivation, sales, and traditional grower recognition are being handled by other government departments — primarily DTIC and DALRRD.

GrowerIQ’s detailed analysis of South Africa’s Cannabis Master Plan and Ramaphosa’s commercial production mandate covers the commercial policy timeline in full.

The Master Plan: Economic Stakes and Timeline

Behind South Africa’s regulatory complexity sits a formal economic framework. The National Cannabis Master Plan, coordinated by the Department of Trade, Industry and Competition (the dtic) with DALRRD, the Department of Health, and the Department of Justice, sets out a nine-pillar structure — covering regulatory services, seed systems, research and development, market development, and inclusive participation.

President Ramaphosa’s February 2025 State of the Nation Address was unambiguous: "We want South Africa to lead in the commercial production of hemp and cannabis." The economic arithmetic behind this statement is substantive.

DTIC Chief Director Ncumisa Mcata-Mhlauli has stated the government is targeting 10% annual growth from an estimated R14 billion current formal market base — with the full market, including illicit activity, estimated at R28 billion. A March 2026 industrialisation study published by the Localisation Support Fund (LSF) in partnership with the Presidency, the Industrial Development Corporation (IDC), and the dtic estimated the domestic hemp sector alone could grow from R7.3 billion in 2025 to R40.4 billion by 2040 under a coordinated policy environment. The sector currently employs more than 90,000 people; the Master Plan targets 130,000 sustainable jobs.

Commercial Licensing Regulatory Calendar

The critical signal for operators: full commercial licensing for vertically integrated cannabis operations — seed to shelf — is realistically a 2027–2028 milestone. Operators who begin building compliance infrastructure, cultivation capacity under existing hemp permits, and SAHPRA medicinal relationships now will hold first-mover advantage when commercial frameworks open.

For a granular breakdown of cultivation requirements by province and the dual-track regulatory application process, GrowerIQ’s complete guide to South Africa hemp cultivation regulations covers permit requirements, provincial conditions, and seed certification obligations.

Lesotho: Pioneer Under Pressure

Africa’s original cannabis licensing jurisdiction is the one that most operators underestimate — both its achievements and its ongoing structural fragility.

In 2017, Lesotho’s Ministry of Health granted South African medical company Verve Dynamics Africa’s first legal cannabis cultivation licence, making Lesotho the continent’s pioneer. In 2021, MG Health became the first cannabis producer anywhere in Africa to achieve Good Manufacturing Practices (GMP) certification and win a licence to sell medicinal cannabis flower as an active pharmaceutical ingredient to the European Union.

These are genuine milestones. But they also bracket a decade in which Lesotho’s cannabis licensing system has struggled with governance failures, low utilisation rates, inadequate testing infrastructure, and intense pressure from better-capitalised competitors in South Africa and beyond.

The Regulatory Framework

Lesotho’s cannabis industry operates under the Drugs of Abuse Act 2008 and accompanying regulations. The current governing instrument is the Drugs of Abuse (Cannabis) Regulations (first issued 2018, subsequently superseded by the 2019 Regulations), which establish licensing categories, seed-to-sale tracking requirements, security standards, and import/export permit obligations.

Seven licence categories exist: Operator, Cultivation, Testing, Transport, Non-academic Research, Supply & Distribution, and Manufacturing. Operator licences cover the full commercial footprint — cultivation through export — and are renewed annually.

A critical regulatory constraint: outdoor cultivation is restricted to cannabis strains with a THC content below 1%, and only for the production of CBD isolate. Higher-THC cultivation must be conducted indoors.

Export of cannabis and cannabis products requires a dedicated permit under sections 14 and 15 of the Act, using Form B of Schedule I. Every shipment requires formal endorsement from the regulatory authorities.

The 2025 Amendment: Tighter Standards, Revised Fees

On November 7, 2025, Lesotho published Legal Notice No. 155 of 2025: Drugs of Abuse (Cannabis) (Amendment) Regulations, 2025 — its most significant regulatory revision in years. The amendment refines import/export permit requirements, introduces stricter laboratory testing obligations, and substantially revises fee structures across all licence categories.

Source: Mayet & Associates / Legal Notice No. 155 of 2025, Lesotho Government Gazette

Additional fees: annual inspection (M25,000), location change (M35,000), information amendments (M5,000).

New Regulatory Architecture: LeMeRA and LNB

The 2025 reforms established a two-body regulatory architecture replacing direct Ministry of Health oversight:

Lesotho Medicines Regulatory Authority (LeMeRA) — modelled on South Africa’s SAHPRA, LeMeRA conducts technical reviews of licence and permit applications and makes recommendations. Board Chairperson Robert Taolana, a professional pharmacist and public health policy specialist, has articulated an institutional vision centred on "coordination, credibility, and long-term public value."

Lesotho Narcotics Bureau (LNB) — receives LeMeRA’s recommendations, conducts vetting, and issues final licensing decisions. The LNB must formally endorse destruction certificates and export permits as part of compliance verification.

This two-stage process — LeMeRA technical review followed by LNB vetting — is designed to separate scientific and pharmaceutical assessment from narcotics enforcement. In practice, it adds a layer of process that operators must account for in their compliance timelines.

Operational Reality

Despite being Africa’s regulatory pioneer, Lesotho’s cannabis sector has struggled to convert licences into operational capacity. Of a reported 140 licences issued across the sector’s history, only 17 were recorded as active at one assessment point; the PMC-published academic study on Lesotho’s cannabis sector found that at the time of research, only one of the 33 licensed entities held GMP certification. Five producing farms are currently reported as successfully operational.

Structural barriers explain much of this gap: no accredited domestic testing laboratories (samples must be sent to South Africa at significant cost), high licence fee thresholds that exclude small and medium enterprises, an export logistics requirement that routes all shipments through South Africa, and a prior absence of marketing authorisation regulations that blocked domestic dispensary development entirely.

LeMeRA and LNB are intended to resolve the governance dimensions of these challenges. New operational guidelines covering marketing authorisation, drug schedules, and clinical trial protocols are expected to be gazetted by the second quarter of the 2026/27 fiscal year.

Comparative Framework: South Africa vs. Lesotho

What This Means for International Investors

The Africa cannabis market 2026 narrative is real — but it requires investors to distinguish between regulatory momentum and operational readiness.

South Africa presents a complex but credible investment environment. The dual-track regulatory system is not confusion — it is an intentional architecture separating industrial agriculture (hemp) from pharmaceutical-grade production (medicinal). Operators who can navigate both tracks, build compliant supply chains under existing DALRRD permits, and position for SAHPRA medicinal licensing will be placed ahead of the commercial licensing window expected in 2027–2028. The LSF/IDC/Presidency study’s projection of a R40.4 billion hemp sector by 2040 comes with an explicit caveat: it requires coordinated industrial policy and processing infrastructure investment. That infrastructure gap is itself an opportunity.

Lesotho is a higher-risk, higher-specificity play. Its pioneer status is genuine, and its EU market access precedent — established by MG Health’s GMP certification — is the clearest proof of concept for African-origin medicinal cannabis in European pharmaceutical channels. But operational density remains thin relative to the licence count, and the LeMeRA/LNB transition introduces process uncertainty in the short term. Operators already active in Lesotho have an advantage — the 2025 amendment refines rather than replaces the existing framework. New entrants should budget for the two-stage regulatory process and plan for South African export routing logistics.

Across both markets, the underlying regulatory theme is the same: compliance infrastructure built to pharmaceutical standards is the price of entry. Seed-to-sale traceability is not optional — it is explicitly required by both SAHPRA’s medicinal licence conditions and Lesotho’s Drugs of Abuse Regulations. Operators who treat compliance as a cost centre rather than a competitive advantage will not survive either jurisdiction’s regulatory scrutiny.

GrowerIQ provides a detailed breakdown of what SAHPRA compliance requires in practice in its guide to regulatory compliance for cannabis growers in South Africa.

How GrowerIQ Supports African Cannabis Operators

The regulatory frameworks in South Africa and Lesotho share a structural requirement that is difficult to overstate: seed-to-sale traceability is mandated, auditable, and enforced. SAHPRA’s Section 22C licence conditions require complete chain-of-custody documentation from cultivation through processing and distribution. Lesotho’s Drugs of Abuse Regulations impose tracking, record-keeping, and testing obligations that parallel international GMP standards. Export permits in both jurisdictions require documentation that demonstrates product integrity at every stage.

GrowerIQ’s seed-to-sale platform was purpose-built for regulatory environments of precisely this complexity. For South African operators working under SAHPRA medicinal licences or scaling hemp cultivation under DALRRD permits — and for Lesotho operators preparing for the LeMeRA technical review process — GrowerIQ provides:

• End-to-end traceability from genetic origin through cultivation, harvest, processing, and export — the chain of custody that both SAHPRA and Lesotho’s Narcotics Bureau require in permit documentation.
• Batch-level quality assurance with integrated laboratory testing workflows that generate the per-batch records regulators audit.
• Cultivation analytics tracking environmental conditions, yield, and harvest data — critical for THC threshold compliance (2% for SA hemp; 1% outdoor limit in Lesotho).
• Regulatory reporting aligned with SAHPRA pharmacovigilance requirements and Lesotho’s mandatory inspection reporting obligations.
• Multi-site management enabling operators who hold permits across South Africa’s nine provinces to manage cultivation records from a single compliance dashboard.

Africa’s cannabis market is not a future opportunity. It is a present operational environment with active regulatory requirements. The operators who build compliant infrastructure now — before commercial licensing opens in South Africa and before Lesotho’s regulatory overhaul is complete — will hold the market positions that are hardest to displace.

This analysis is current as of May 2026 and draws on official South African Government sources including the South African Health Products Regulatory Authority (SAHPRA), the Department of Agriculture, Land Reform and Rural Development (DALRRD), the Department of Trade, Industry and Competition (the dtic), the Department of Justice and Constitutional Development, and the South African Government News Agency (SAnews.gov.za); Lesotho government instruments including the Drugs of Abuse (Cannabis) (Amendment) Regulations, 2025 (Legal Notice No. 155 of 2025) and statements from the Lesotho Medicines Regulatory Authority (LeMeRA); the IMARC Group Africa Medical Cannabis Market Report; and the March 2026 LSF/IDC/Presidency hemp sector industrialisation study. Figures reflect the best available data as of the publication date.

Sources

• Cannabis Licensing — SAHPRA — South African Health Products Regulatory Authority (official)
• GMP Certificates for Cannabis Cultivators Holding a Section 22C(1)(b) Licence — SAHPRA — South African Health Products Regulatory Authority (official)
• Over One Thousand Permits Issued for Hemp Cultivation — SAnews — South African Government News Agency (official)
• Hemp (Low THC Cannabis) Regulatory System — Department of Agriculture — DALRRD (official)
• Cannabis for Private Purposes Act 7 of 2024 — South African Government — Republic of South Africa (official)
• Ministry Invites Public Comment on Draft Regulations for the Private Use of Cannabis — Department of Justice — Department of Justice and Constitutional Development (official)
• South Africa is Positioning Itself as Rising Leader in Global Hemp and Cannabis Industry — the dtic — Department of Trade, Industry and Competition (official)
• SA Emerging as a Leader in the Global Hemp and Cannabis Industry — SAnews — South African Government News Agency (official)
• National Cannabis Master Plan — DALRRD / DTIC Briefing to Parliament — Parliamentary Monitoring Group
• Drugs of Abuse (Cannabis) (Amendment) Regulations, 2025 — Legal Notice No. 155 of 2025 — Lesotho Government Gazette (via Mayet & Associates analysis)
• Lesotho Completely Overhauls Cannabis Oversight — Cannabis Law Report — Cannabis Law Report
• Envisaging Challenges for the Emerging Medicinal Cannabis Sector in Lesotho — PMC — Journal of Cannabis Research / Springer Nature
• Africa Medical Cannabis Market Size, Forecast 2033 — IMARC Group — IMARC Group
• South Africa Hemp Study Outlines $2.5B Market Opportunity — Hemp Today — Localisation Support Fund / IDC / Presidency / dtic study (via Hemp Today)
• SA Risks Missing R40bn Hemp Industry Opportunity — Business Day — Business Day
• Govt Moves to Accelerate Cannabis Industry Regulations — Business Report — Business Report
• SA Draft Cannabis Rules: 750g Possession and 5-Plant Limits Explained — IOL — IOL / Mercury
• GrowerIQ — South Africa Cannabis Master Plan 2026
• GrowerIQ — South Africa Hemp Cultivation Regulations 2026
• GrowerIQ — Regulatory Compliance for Cannabis Growers in South Africa