Advocate Simi Pillay-van Graan is the former CE of Business Against Crime and the Tobacco Research Institute of South Africa. So she knows a thing or two about regulations and how they enable and constrain economic activities.

The current CE of Trikar Enterprise says that South Africa is positioned for a transformative economic opportunity with cannabis but that significant regulatory gaps in the recreational cannabis space need to be addressed. 

Writing in the Mail and Guardian on 23 April 2025, Pillay-van Graan identifies four fiascos facing the South African cannabis industry unless Government urgently intervenes to put a set of regulations in place.

She writes:

"The economic potential of the cannabis industry is enormous. Estimates suggest that a well-regulated market can generate significant revenue and create thousands of jobs. But the regulatory void has a negative effect on the sector. 

The absence of clear and enforceable guidelines, including set limits on THC content, fuels the continuation of an informal market characterised by inconsistent product quality and potency. This situation not only deters legitimate investors and stifles innovation but also places companies that are serious about building a transparent and safe cannabis environment at a severe disadvantage.

Without strategic oversight and a comprehensive regulatory framework, the industry faces several detrimental consequences:

Investor hesitancy: Ambiguity in regulations discourages capital investment, as investors are unwilling to commit to a market with unclear legal boundaries and potential compliance pitfalls.

Erosion of consumer trust: The proliferation of unregulated products undermines consumer safety and erodes trust in the market. Without standardized guidelines, consumers struggle to differentiate between products that are safe and those that may pose serious health risks.

Market fragmentation: In the absence of a unified regulatory framework, the industry risks segmenting into regulated and unregulated sectors. This fragmentation hampers the growth of the legal market and encourages the persistence of a lucrative underground market.

Missed economic opportunities: The lack of regulatory clarity prevents the formalisation of the cannabis sector, limiting its capacity to contribute to national economic growth and job creation.

Pillay-van Graan argues that there is a need for a comprehensive approach to cannabis legalization.

“Before South Africa can contemplate true commercialisation of the cannabis industry, significant groundwork must be completed. The environment lacks the robust infrastructure, advanced testing capabilities and stringent enforcement mechanisms required to support a healthy, well-regulated market”. She says that while the Cannabis Master Plan is a step in the right direction it offers an “incomplete picture” as it “falls short in balancing the genuine benefits of cannabis with the inherent risks”.

“This incomplete approach underscores the need for a comprehensive integrated strategy that ensures all critical aspects of the industry are addressed in an auditable manner."

She says there are health and safety concerns:

“There are no established guidelines for recreational cannabis that dictate crucial aspects such as THC quantities, quality benchmarks and standardised product labelling.  Without regulated standards, recreational cannabis products can vary in potency.

“Cannabis products with high levels of THC may expose consumers to an increased risk of adverse reactions from impaired cognitive function and heightened anxiety to serious health complications.”

“Compounding these issues is the lack of structured public health and education initiatives and community education to inform users of these risks. 

“Moreover, South Africa’s infrastructure for testing cannabis intoxication remains underdeveloped. There are no government facilities or reliable roadside testing methods to assess cannabis impairment at accident scenes. Law enforcement often defaults to attributing accidents solely to drunken driving without the necessary tools to detect cannabis intoxication.

Pillay van Graan says that another gap is the weak enforcement of laws designed to curb unauthorised drug sales and trafficking.

“The Drugs and Drug Trafficking Act provides a legal framework to disallow the unsanctioned sale and purchase of cannabis, yet enforcement in the recreational sector remains inconsistent, enabling the proliferation of unlicensed vendors. 

This lack of enforcement undermines legal compliance and perpetuates an environment where consumer safety is compromised. Strengthening these enforcement mechanisms is essential for accurately investigating accidents and upholding the integrity of the cannabis market.

Pillay van Graan says that only by investing in such strategic oversight can South Africa build a regulatory foundation that “ticks every box from quality control and consumer safety to robust enforcement and investor confidence”.

“By closing these regulatory gaps, investing in comprehensive testing and enforcement infrastructure and developing a fully integrated, auditable strategic framework, South Africa can build a cannabis industry that contributes to the economy but also safeguards public health and nurtures a secure, competitive market environment.”

She concludes: "Without these regulatory foundations and strategic insights, law makers risk leaving consumers unprotected and investors hesitant, stifling the industry’s growth potential and undermining efforts to create a booming, transparent and safe cannabis environment."

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