How to Get a Cannabis License in South Africa

South Africa is known for its cannabis-friendly policies. They have, in fact, legalized cannabis by decriminalizing private personal use and cultivation. But does this legal shift pave the way for commercial cannabis in South Africa? Maybe not for the recreational market. However, South Africa’s medical marijuana program already relies heavily on imported cannabis from Canada. Continue reading for a comprehensive guide to help you become a licensed cannabis producer in South Africa. Currently, firms such as Aphria, Aurora, and Canopy Growth are operating in South Africa.

South African cannabis laws have always been a bit different. The plant was criminalized in 1928 for political and moral reasons, like in much of the world. Despite these laws, usage of the plant, locally known as dagga, remained widespread in South Africa. To double down on prevention, the 1971 Abuse of Dependence-producing Substances and Rehabilitation Centres Act was passed, and later the Drugs and Drug Trafficking Act of 1992. These laws criminalized dagga possession.

However, in 2018, the South African Constitutional court ruled that dagga criminalization acts were unconstitutional and violated a person’s presumption of innocence by automatically classifying a person a dealer if they were found in possession of more than 115 grams of dagga.

Along with 2018 decriminalization came an amendment to the Medicines and Related Substances Act that rescheduled cannabidiol (CBD) products from Schedule 7 to Schedule 4. CBD in South Africa can be obtained from a pharmacist by prescription.

While a legal pathway for CBD in South Africa seems clear, widespread availability of products containing THC seem further away. The South African medical marijuana program relies heavily on Canadian suppliers. THC products remain a Schedule 7 Controlled Substance in South Africa.

In South Africa, recreational (personal use) cannabis is not regulated. While dagga is decriminalized there still may be legal consequences. Both of these elements arise because it is not legal to buy or sell cannabis in South Africa. The government itself explains that to get dagga you need to either grow it on your own property or be gifted it by another private grower.

The legal consequences of ensuring that dagga is not being bought or sold falls on South African law enforcement. The South African Central Drug Authority itself seems to support decriminalization of dagga and likewise do not support commercialization of cannabis. Despite this, South Africa has a thriving medical marijuana program with growing demand.

Specific Rules Around Cannabis Usage in South Africa

Cannabis usage was made legal after Deputy Chief Justice Raymond Zondo announced a decision in the Constitutional Court of South Africa, by making the ban on cannabis unconstitutional, and invalid. The specific rules around cannabis consumption in South Africa are:

• An adult person may use or be in possession of cannabis in private for his or her personal consumption in private.
• The use, including smoking, of cannabis in public or in the presence of children or in the presence of non-consenting adult persons is not permitted.
• The use or possession of cannabis in private other than by an adult for his or her personal consumption is not permitted.
• The cultivation of cannabis by an adult in a private place for his or her personal consumption in private is no longer a criminal offense.

Medical marijuana was legalized in South Africa in 2017 under the Cultivation of Cannabis and Manufacture of Cannabis-related Pharmaceutical Products for Medical and Research Purposes regulations, which state medical cannabis will be governed by their Medicines and Related Substances Act of 1965.

The Cultivation of Cannabis and Manufacture of Cannabis-related Pharmaceutical Products for Medical and Research Purposes regulations is comparable to Health Canada’s GPP regulations for cannabis. South Africa itself does not have any registered medical marijuana products or licensed producers of cannabis. North American cannabis companies from Canada have been their main source of cannabis.

The Cultivation of Cannabis and Manufacture of Cannabis-related Pharmaceutical Products for Medical and Research Purposes regulations cites Sections 21 and 22A(9)(a)(i) of the Medicines Act saying that:

The South African Health Products Regulatory Authority (SAHPRA) considers cannabis and cannabinoid-containing medicines to be unregistered medical products and governs the process for their importation along with the Department of Health. In order for firms to export their cannabis to South Africa they must have a permit issued by the Department of Health and a licence issued by SAHPRA.

Types of Cannabis Licenses in South Africa

There are two main types of cannabis licenses in South Africa: Hemp Permits, and Medicinal Cannabis Production Licenses.

Asides from the differences in the types of licenses, the fee structure for both licenses differ as well.

• Hemp Application: R902
• Medicinal Cannabis Application: R23,980 

The fee structure for Cannabis licensing application insepction and consulting also differ by the type of cannabis license.

According to Cliffe Dekker Hofmeyr, they charge R714 per hour for a Hemp Permit Application, and R3180 for a Medicinal Cannabis Application.

SAHPRA and Health Officials grant licences for other medical marijuana production and sale activities:

• Cultivate and produce cannabis and cannabis resin
• Extract and test cannabis
• Manufacture a cannabis/cannabinoid-containing medicine
• Import cannabis-containing medicine
• Export cannabis-containing medicine
• Distribute cannabis-containing medicine

Applications for the above licenses may be made on the basis of a site plan and site master file, prior to construction of the facility. However, all completed facilities will be inspected for compliance with all requirements. In addition to the licence application to SAHPRA, Applicants will also be required to apply to the Director-General of Health for a permit to comply with the terms of the provisions of Section 22A(9)(a)(i) of the Medicines Act to acquire, possess, manufacture, use or supply Cannabis for medicinal use.

Applying for a Medicinal Cannabis License

Here is the application form, to apply for a Medicinal Cannabis License in South Africa. Companies or individuals need to indicate whether they plan on doing cultivation, manufacturing, extraction, testing, importing, exporting, or distribution of medicinal cannabis, in their license application.

Licenses are valid for five years, unless suspended or revoked by SAHPRA.

How to Get a Hemp Permit in South Africa

As part of the development of the Cannabis Master Plan in South Africa, the government is aiming to develop a broad framework that allows for the development and growth of the Cannabis Industry so that the industry can:

• Contribute to economic development
• Create jobs
• Create an inclusive environment
• Encourage rural development
• Alleviate poverty

Accordingly, the government declared Hemp as an agricultural crop in September 2021, allowing importation, exportation, cultivation, sale and research of Hemp in South Africa.

Requirements and Application Form for a Hemp Permit

Applications for a hemp permit in South Africa need to provide the following information:

• The amount of hemp intended for cultivation
  • The South African government is not allowing more than 50 hectares of hemp cultivation at this time
• A copy of the lease agreement(s) or business arrangement(s) permitting use of each premises for the proposed activities

Here is the application form for a Hemp Permit in South Africa.

The regulatory framework outlines record keeping procedures in a general way, that match up closely with the pre-existing Canadian model. This includes stipulations that a licence holder should ensure that information created, sent and received in the course of conducting their business is appropriately recorded for the purposes of:

• compliance with obligations under licence conditions, the Act and Regulations
• corporate memory and repeatable decision making
• ensuring the integrity of information assets
• facilitating business continuity as employees change over time
• responding to auditing or inspectorate requirements, which may include unannounced inspections
• meeting the security arrangements to record access to cannabis and to cannabis cultivation, production or manufacture sites

The level of detail to be included in a particular record will need to factor in the complexity of the issue being addressed and any regulatory requirements that apply to the particular record.

As part of the application process Applicants are required to provide details of the arrangements in place to undertake record keeping activity. A robust seed-to-sale system like GrowerIQ is one way to ensure compliance with these record keeping guidelines.

Applicants must develop and implement a document management system which will allow all processes and procedures which may affect the quality of the product to be recorded in the documentation for each batch. The following in particular must at least be documented:

• the location of cultivation and the name of the person (cultivator) in charge;
• details of crops previously grown at that location;
• nature, origin and quantity of the herbal starting materials;
• the chemicals and other substances used during cultivation, such as fertilisers, pesticides and herbicides;
• irrigation water analysis;
• standard cultivation conditions, if applicable;
• particular circumstances which occurred during cultivation;
• harvesting and production which may affect the chemical composition;
• departure from standard cultivation conditions, particularly during the harvesting period;
• nature and quantity of the yield;
• date/s and time/s of day when harvesting occurred;
• drying conditions;
• measures for pest control.

Reports of soil analyses must be kept available in the dossier addressing “Location”.

All batches originating from one location must be clearly labelled (e.g. with a batch number). This must be done as early on in the process as possible. Batches originating from different geographic locations may be combined only if guaranteed to be the same, and if ensured that the mixture is homogenous. Mixing of batches must be documented. It must be recorded in the documentation for each batch that the cultivation, harvest and primary processing procedures were in accordance with these requirements.

GrowerIQ's seed-to-sale tracking platform contains all relevant batch information, including environmental conditions and cannabis-specific plant metrics. Their advanced seed-to-sale platform tracks everything SAHPRA requires.

On the legal front CBD has recently be re-scheduled from Schedule 7 of the Medicines Act (being a highly regulated substance) to Schedule 4 (substances that can be sold with a prescription). In addition, some products with THC levels of less than 0.001% and less than 0.0075% of CBD have been excluded from the list completely. Products that fall outside these ranges continue to be restricted and require a medical practitioner's prescription to be sold.

More firm legal guidelines for personal use are expected towards the end of 2020. Currently, South Africans can legally possess up to 600 grams of cannabis per person, with a maximum of 1,200 grams per household (public possession limit is 60 grams). South African neighbors Lesotho and Zimbabwe have also adopted liberal cannabis policies and entered into partnerships with Canadian cannabis producers. Outside of personal cultivation and personal gifting, the medical marijuana program is the main way that South Africans access cannabis.

Cannabis Market Opportunity in South Africa

While the path towards full legalization is unclear, what IS abundantly clear is the market potential - both in terms of domestic market and natural advantages. In 2021, the South African cannabis industry had an estimated market value of R87.7 million (approx. $17 million USD). However, analysts are expecting an exponential growth in the market, as they are projecting that the cannabis industry will have an estimated market value of R406.3 million in 2026 (22 million USD). This is in stark contrast to the overall South African economy growth rate which has fluctuated between 3% - 0.9% in the last few years. 

South Africa Is Perfect for Outdoor Cannabis Farming

There is a region in South Africa in the Eastern Cape, and KwaZulu-Natal provinces, where Cannabis grows very well. In fact this region is called the "dagga belt" where Cannabis is a traditional crop. Cannabis farming sustains entire communities in this region, areas which are traditionally involved in a subsistence economy. Expanding the overall cannabis market is helping rural farmers grow higher quality product, increasing the nations ability to sell their produce in the national and international cannabis markets - expanding beyond the restrictive, local markets.

Largest Cannabis Producers in South Africa

SafriCanna

SafriCanna stands out as a leading cannabis cultivator with the distinction of operating South Africa's most extensive and technologically advanced cannabis production facility.
Situated in Centurion, Gauteng, this state-of-the-art facility enjoys an elevated location at 1,500 meters above sea level, which contributes to the unique quality of its cannabis products. Notably, SafriCanna's products are characterized by their high THC (Tetrahydrocannabinol) content, the primary active compound sought after by the medical cannabis industry.

Sweetwater Aquaponics

Sweetwater Aquaponics has gained recognition for its substantial cannabis cultivation capacity, positioning it as a significant player in the South African cannabis landscape.
The company's strategic presence extends beyond South Africa, as it holds listings in Frankfurt, Germany, one of the largest European hubs for the distribution of medicinal cannabis.

Labat Africa Limited

Labat Africa Limited is a noteworthy name in the South African cannabis sector, evident from its listing on the Johannesburg Stock Exchange (JSE). In a major investment initiative that concluded in late 2022, Labat Africa Limited solidified its presence as a dominant cannabis industry player. Additionally, the company maintains a listing on the Frankfurt Stock Exchange (FSE) in Germany, underscoring its international influence.

Cilo Cybin

Cilo Cybin has achieved a significant milestone by becoming the first South African company to secure licenses for the cultivation, processing, packaging, labeling, and sale of medical cannabis products. Notably, Cilo Cybin has opted to focus on product export rather than catering to local consumption, signaling a strategic approach aligned with global market dynamics and demands.

Tapping into the South African Cannabis Market

For Canadian companies interested in participation, we featured support being offered by the government in an earlier post: the Canadian Trade Commission offers support to Canadian cannabis firms looking to expand internationally.

These cannabis-friendly structural advantages make South Africa an exciting frontier in the cannabis market.

The fact that you found your way to this article is remarkable, we're sure that you're an ambitious grower. The oppourtunity in international trade does not end here. We have written guides on getting your cannabis license for more countries in Africa, such as Malawi, Zimbabwe, and Zambia. Check out our guides over here: Cannabis License in Malawi, How to Get a Cannabis License in Zimbabwe, and Cannabis License Zambia.

This discussion only scratches the surface. Let's discuss your project in order to build a cannabis cultivation plan that best supports your needs. Our consultants can help, both in planning your project, and with the tracking technology you'll need to satisfy SAHPRA. Learn more by filling out the form below, or starting a chat with us to the right!