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Maseru admits cannabis licensing fiasco, promises to clean up

It’s official. Lesotho’s cannabis industry is in a mess. The much-anticipated boom has fizzled into regulatory confusion, corruption and the dwindling of investor interest.  A shocking 97% of the issued production licenses remain dormant and the country’s new health minister, Motlatsi Maqelepo, has launched an investigation into the whole issue.

Now, a new government has come to power after a high profile murder case toppled the previous administration in May 2020. And it’s established a new Narcotics Bureau intended to bring order to the chaos.

New minister, Dr Motlatsi Maqelepo, said it was clear there was corruption in the issuing of licenses but stopped short of blaming his predecessor, Dr Nkaku Nkabi,. Dr Nkabi had been grappling with the license issue and had threatened to revoke licenses after it was revealed earlier this year that only five of the 140 cannabis production licenses issued had become operational.

The four companies in production are Bophelo Lesotho, Hemp Africa, Medigrow Lesotho, Verve Dynamics and Daddy Cann Lesotho. 

Maqelepo has promised strong action.

“I have been told that the issuance of licences happened in two different offices and I have asked the offices to give me copies of the licenses so that we can conduct a reconciliation and know the number of licences that have been issued.

“We also need to do some due diligence of how the licences were given and whether the right procedures were followed in their issuance. Most of the people who will renew the licences will be interrogated so that we can get to the bottom of things like whether they met the conditions for receiving the licenses,” Maqelepo told online news service theReporter.

“Despite the laws and regulations being there, a regulatory body is necessary to help grow the industry. We need such a body to function properly and enforce the law and principles to ensure success of the business.

“I still have a strong feeling that if we comply with the Drug of Abuse Act of 2008, Lesotho will be an example to other countries on how best to go about the industry,” he said.

One licence holder, Teboho Mohlomi who acquired a licence to start operating in the cannabis industry told the Lesotho online news service,  theReporter that he had decided to give up on the cannabis industry after struggling to secure investors who were put off by the lack of regulation.

“We have since complained that the ministry of health should now allow many people to get licences so that it could be easier for them to regulate people who obtained them, but the ministry kept on issuing more licences. After obtaining a licence with M540 000 and renewing it twice for M370 000, I am now forced to leave the business.

“It is sad for me to leave the business which I thought was going to be a legacy for my kids after spending so much money, but I have no choice but to leave it, Mohlomi said.

He said other people who are also exiting the industry after failing to get investors. Others have even resorted to selling their licences to recoup their money. 

However, the ministry of health’s legal officer, ‘Masello Sello says once someone acquires a license, they cannot sell it; the only thing they can do is sell the business under which they applied for the licence.

The Cannabis Law Report summed up the situation as follows:In the beginning, the licences were given out for free which gave locals the ability to use them. Now, the government charges ~ $37,000 for licenses which prices out standard residents. Even though many standard residents have their own illegal grow operations, they can only sell on the black market and cannot profit from the legal medicinal cannabis boom, while facing jail time if caught.”

They have advised investors to act cautiously until Lesotho’s new regulatory framework has been established and the license fiasco cleared up. This hasn’t prevented Bophelo Lesotho from ploughing ahead with its ambitions to be the world’s biggest cannabis farm.

 

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