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Eastern Cape seeks different cannabis licensing model

The Eastern Cape is developing an alternative licensing model to the current South African status quo. The provincial government is driving a process aimed at helping illegal cannabis growers and says the permit system must not only favour big business.

A discussion document published in June 2020 by the Eastern Cape Socio Economic Council (ECSEC) proposes that a provincial cannabis development fund of R200 million be established to help develop the industry.

It wants to create a “formal sector” licensing regime in which entrepreneurs would partner with local communities by providing capital and processing facilities. It also says technical support should be provided for growers and that local landraces should be protected.

It proposes that it becomes a conduit for services to the informal sector and that it becomes active in cultivation itself. It currently is putting together a membership system that allows growers to access legal advice and benefits.

The ECSEC has also made a case for cannabis-tourism, saying the scenic beauty of the Transkei cannabis fields would attract foreign tourists.  

ECSEC’s Cannabis discussion document, authored by Mike Lewis, makes the following suggestions regarding the Eastern Cape Provincial Government (ECPG):

1. ECPG supports national government’s wish to legally enable the growth of an inclusive cannabis economy through the development of world leading cannabis laws and regulations (to match our world-leading 1996 constitution). 

2. ECPG recognizes that there must be a complete end to the colonial-origined criminal prohibition of the cannabis plant and its products, and that the cannabis trade must be brought within the law (like alcohol and tobacco). 

3. There is need for better policy co-ordination between drugs policy (substance abuse) and policies relating to cannabis business development and formalization processes. The  finalization of the (delayed) fourth National Drugs Master Plan (2018-22) should reflect this. 

4. The de-criminalisation and legalisation of cannabis (and its use, cultivation, processing and trade) will require the design and implementation of a new set of legal regulations. 

5. Existing legislation will need to be amended to allow this (notably the Medicines and Related Substances Act of 1965.The Drugs and DrugTrafficking Act of 1992 and theTraditional Health Practitioners Act of 2007). Ideally the (unpublished) Draft Cannabis Regulation Bill (2020) should de-criminalise and legalise not just the use of cannabis but the whole cannabis value chain. 

6. Government regulatory capacity should be focused, and the obvious focus is on regulating (and taxing) formal sector operators selling to the final consumersTHC-containing products and (western) medicinal cannabis final products (that is, there is no need to regulate cultivation). 

7. There is no need for sector-specific regulation of non-THC businesses (such as industrial hemp or CBD products). 

8. No attempt should be made to regulate informal/traditional growers, informal traders and cannabis use by traditional health practitioners. The costs of regulating these operators would certainly be much greater than the benefits. It has been argued that “As a consequence of the legal acknowledgment of THPs, traditional health products must now also be brought under regulatory measures”.15This appears untrue.The focus should be on the education and training of traditional health practitioners (as provided for in the 2007 Act). Instead we need to consider regulations that protect and privilege small/informal operators. 

9. Consideration should be given to making formal sector licenses conditional on the supply of raw cannabis from traditional small-scale growers (mainly located in the former homelands).  

10. This mechanism can be justified for several reasons: 

    • It makes good commercial sense for formal sector operators. The best cannabis is grown in these areas. High-quality craft cannabis based on heritage knowledge, and traditional and organic landraces has excellent export potential. 
    • The mechanism could help to promote investment into these impoverished areas by formal sector operators. 
    • Cannabis formal sector operators could invest in these areas, located, for example, at Wild Coast SEZ; the Magwa-Majola corridor development project; Lusikisiki and Libode; near to Khoisan traditional growers in the western and central parts of the province; and Rasta “groundation sites” (for example, around Bridle Drift Dam, near Mdantsane). 
    • Formal sector investors would engage in mutually beneficial outgrower relations with local traditional growers. 
    • The mechanism would at least provide some compensation for wrongs of apartheid era cannabis prohibition (as detailed in the work of Thembisa Waetjen16 among others). 
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11. It is recommended that formal sector licensees should not be permitted to cultivate more than two hectares and be obliged to source at least a half of their raw cannabis material from traditional growers. 

12. Formal operators sellingTHC products should be regulated to ensure compliance regarding: 

    • Product warnings 
    • Prevention of under-age sales 
    • Provision of information on product composition 
    • MaximumTHC content (20%) 
    • Restrictions on marketing 

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