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New Frontier Data: The African Hemp Report

Executive Summary

The last two years have seen a flurry of cannabis-related activity in Africa, including substantial foreign investment in Lesotho following the country’s regulation of medical cannabis in 2017, and the functional legalization of adult use in South Africa through the courts in 2018. 

In addition to those legal developments, several African countries have seen the establishment of businesses—often by or in partnership with foreign operators—which have not sought or received approval by governments to establish cannabis businesses on the continent, often angering local residents and governments. 

 

Read about hemp in South Africa

 

Cannabis legalization accelerating

Global interest and the pace of change will continue to accelerate, but policymakers in Africa still have choices to consider about whether to legalize cannabis, and how to design and implement regulations. However, governments must prepare now to effectively shape the medical cannabis and industrial hemp industries that they want in the future. 

The emergence of legal cannabis in Africa is occurring alongside several other transformative changes on the continent. Africa’s population is expected to double by 2050, to more than 2.5 billion people. Infrastructure investment is soaring, with China alone investing USD $40 billion in infrastructure and other developments in 2017 as part of its Belt and Road Initiative. 

 

East Africa likely to be Africa’s hemp hub

The sub-Saharan construction industry is forecasted to reach $12.9 trillion USD by 2022, with much of the construction centered in East Africa.

The continent’s growth presents opportunities for both medical cannabis and industrial hemp. The plant and the industries surrounding it can support several of the UN’s Sustainable Development Goals (SDGs), including those that are highest priority for African citizens, and some of the low-tech, low-cost, accessible applications of industrial hemp can be quickly activated to support the health and growth of Africa in the coming decades. 

This report is based on engagement with stakeholders on the ground, and intended for African policymakers, government officials, entrepreneurs, foreign investors, and casual observers interested in the medical cannabis and industrial hemp markets for their potential benefits in Africa. 

 

Africa accounts for 11% of global cannabis market

New Frontier Data estimates that the global market value of combined legal and illicit cannabis markets was $344.4 billion USD in 2018. Africa accounts for 11% of the world’s market value, at $37.3 billion. Africa’s most sizeable cannabis markets are those with the largest populations: Nigeria ($15.3 billion), and Ethiopia ($9.8 billion), followed by Morocco ($3.5 billion), a noted source of hash for most of Europe.

Cannabis has been used in Africa for centuries for medical, ritualistic, and social purposes, and its use remains common. The average annual cannabis use rate in Africa is 11.4% — nearly double the global average rate of 6%, with use in some markets running even higher, as in Nigeria, where prevalence of annual use is 19% among adults. These high use rates translate to tens of millions of consumers; about 1/3 (83 million) of the world’s 263 million cannabis consumers are African. In recent years, a few Southern African countries have begun reforming drug laws and establishing regulated cannabis industries. 

 

South African legalization will have significant market impact

The first countries to do so were motivated by the economic opportunities which cannabis presented. Lesotho was the first African country to establish a legal market; the government began granting medical cannabis cultivation licenses in 2017 and issued regulations the following year. Zimbabwe followed suit, legalizing cannabis for medical and research purposes in April 2018. Then, in September 2018, South Africa’s Constitutional Court ruled that personal, private cultivation and use of cannabis was protected under the right to privacy guaranteed by its constitution. 

The nation’s laws are currently being revised to account for the court’s ruling. The country’s first medical cultivation license was issued in early April 2019. The report begins with an introduction to cannabis—the plant, the global industry, and current demand in African markets. Next, potential benefits as well as risks and challenges to establishing legal, regulated cannabis markets are discussed. Then, crucial questions are posed to policymakers in Africa as they consider establishing medical cannabis and/or industrial hemp industries. 

The report concludes with brief summaries of 13 key African nations (Lesotho, Zimbabwe, South Africa, eSwatini, Malawi, Rwanda, Uganda, Ethiopia, Nigeria, Ghana, Liberia, Morocco, and Kenya) presenting their existing cannabis activities and the potential impact of regulated medical cannabis and/or industrial hemp programmes.

 

Contact New Frontier for the African Hemp report here (https://cdn2.hubspot.net/hubfs/3324860/NFD-TheAfricaRegionalHemp&CannabisReport-ES.pdf)

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