Prohibition Partners: SA Starting to Distinguish Itself as Exporter of High Quality Cannabis
Main competitors are Columbia, Uruguay and Jamaica
South Africa’s main competitors in the international cannabis export market are Columbia, Uruguay and Jamaica, and the country’s main export opportunities lie in Europe, Israel and Australia.
That’s the view of Stephen Murphy of Prohibition Partners, the leading market intelligence firm providing strategic consultancy services, insights and data on the global cannabis industry. He was quoted in IOL Online on 26 May 2022 saying the SA market is gaining status for its focus on the quality and consistency of products, and complying with the European Medicines Agency’s Guideline on Good Agricultural and Collection Practice, which is seen as the highest international production standard.
SAHPRA has to date issued 55 licenses for cultivating cannabis for export only.
Murphy said: “In this market, it is not about being the largest or cheapest producers, but about delivering the required product at the right price, with off-takers in Europe, Israel and Australia primarily on the lookout for new offerings in terms of quality and consistency of supply.”
‘Grown in SA’ is a marketing advantage
He made his comments virtually at the delivery of research by the European Union Delegation to SA (through its EU-SA Partners for Growth project) on 24 May 2022 on the state of play for existing and aspiring SA cannabis grower and opportunities for trade and investment in medical cannabis and CBD products.
Murphy pointed out that most cultivation projects had so far focussed on the production of flowers and extracts, primarily for sale as bulk, active pharmaceutical ingredients, to countries such as Israel, Germany, Australia and the UK.
He said that while the market was still new, exporters had already distinguished themselves from cheap suppliers of raw material in a market dominated by Colombia, Uruguay and Jamaica.
He said the country’s climate added value to the “grown in South Africa” brand and the South African terroir would be turned into marketing opportunities as the regulatory environment became clearer.
This would allow South African expertise and product development capabilities to become a selling point on the European market.
He said he also expected South Africa to become a hub for breeding of cannabis start-up materials on the African continent, both for hemp and medicinal crops.
Murphy said that regulatory progress made in the past five years had enabled SA to catch up with other countries that had legalised cannabis production earlier.
However, challenges remained still with the limited access to the legal medical market for patients, equity concerns with regard to traditional farms, and the scope of hemp licences.
Right partnerships are the key ingredient to market success
Murphy said SA producers were fostering strong partnerships with licensed manufacturers and co-packers in import countries to help them navigate and overcome stringent export requirements.
“The market has become increasingly competitive, with margins coming under increased pressure. Partnerships will become a key ingredient to market success in the future,” Murphy said.
Brett Hilton Barber