This is an excerpt from the DTIC’s document: Towards a Cannabis Commercialization Framework, dated 3 June 2025.

Proposed Policy Interventions and Regulatory Options for Hemp and Cannabis Commericalization.

The broad policy and strategic objective of the national policy on the commercialisation of hemp and cannabis for South Africa is to provide a regulatory framework for the commercialisation of cannabis in South Africa so as to give effect to the pillar on Effective Regulatory Systems contained in the National Cannabis Master Plan for South Africa in line with

The following proposals are made as possible policy provisions with discussion, motivation and recommendations that should be incorporated in the draft policy framework and be subjected to public comments:

1.          Hemp and Cannabis Commercialisation Must be Government Regulated Through a Defined Regulatory Framework as Opposed to Self-Regulation by Industry.

Cannabis is the world’s most widely used illicit substance. The United Nations Office on Drugs and Crime (UNODC) estimates, probably conservatively, that 180 million people use it worldwide each year. Retail expenditure on the drug is providing a lucrative, untaxed income stream for criminal profiteers. It is important for government control and regulation to be developed and enforced for regulation of cannabis in South Africa.

2.          Licensing of Entities as a Proposed Model Towards Commercialisation for Cannabis for South Africa.

All companies and entities that are engaged in activities from a commercial or trade perspective pertaining to the manufacturing and retailing of hemp and cannabis products will be required to engage in such commercial activities under authority issued to it for that objective.

3.          Compulsory Certification Scheme of Hemp and Cannabis 

The above proposal is to deal with the registration of all companies and organisations involved in breeding, multiplication and sale, seed producers, packers, variety control and listing and import and export control system.

The main rationale relative to this proposed policy principle is to ensure sustainable seed supply system & maintenance of hemp and cannabis biodiversity. It is therefore proposed and recommended for a compulsory certification scheme of hemp and cannabis for that sustainable seed supply system & maintenance of hemp and cannabis biodiversity

4.          Integration of Small Holder Farmers and Traditional Communities in the Formal Hemp and Cannabis Economy.

The existing hemp and cannabis market is operating with the exclusion of the small holder farmers and traditional communities, who, historically play a very important role in this market.

5.          Pilot Small, Medium and Micro Enterprises (SMMEs) and World-Class Government-Owned Industries.

It should be one of the primary objectives of this policy to seeks to empower small, micro and medium enterprises (SMME) through subsidies/grants so that they all participate in and share a piece of the market within the cannabis industry.

SMMEs must be empowered to make sure that they compete with all the big role-players in the industry, inclusive of manufacturing for both local and export market. This policy will also seek to encourage inclusivity of SMMEs from previously disadvantaged backgrounds and rural communities, especially those communities that have long been engaged in the cannabis industry from the Eastern Cape as well as KwaZulu-Natal provinces.

6.          Market Regulation for SMEs’, Large Companies and New Entrants in the Cannabis Industry

South Africa recognises the fact that greater participation of small and medium enterprises in the economy only helps to strengthen the economy and further contributes in the growth of the SME sector in the economy.

There is sufficient evidence to support the notion that hemp and cannabis grown in some parts of the country have contributed in the reduction of poverty in those areas and has helped in the creation of jobs and stimulating the local economy. Creation of a landscape for fair competition, levelling of the playing field for new entrants and enabling transformation of the sector (BEE, women ownership, etc) will be encouraged. 

7.          Establishment of Viable Seed Supply Systems I

t is hereby proposed that same should include most suitable cultivars to be established for local industry to promote the local industry and secure it.

Regulation of the industry through certified seed systems to ensure only the best suitable cultivars are established and to prevent genetic pollution from imported material. The seed supply system can be most effective if aligned to farmers’ current cannabis and hemp farming practices or any new and revolutionary farming model on production that is introduced and rolled-out.

8.          Registration of Agricultural Research Council (ARC) Developed Hemp Cultivars with Proven Adaptability and Performance under Local Conditions.

 Registration of Hemp 1 & 2 with Plant Breeders Rights (PBR) allocated is proposed. The proposal is based on the premise that as seed multiplication of locally developed cultivars are to meet the demand for proven locally adapted cultivars and encourage seed supply to local farmers for hemp production.

9.          Documentation and Protection of Indigenous Knowledge Systems (IKS) 

Protection of local Indigenous Knowledge (IK) through obtaining Plant Breeder’s Rights (PBR) and maintenance of superior germplasm for local commercialisation is recommended for inclusion in this policy framework. 

10.    Conducting Value-Chain Studies and Market Research

 For a sustainable cannabis market, a proposal is made that the policy must continually make provision for conducting of value-chain studies as well as market research relative to the hemp and cannabis industry as a whole by both government as well as the industry. the dtic, as a lead department in this area, will be required to conduct such market research together with other key departments in order to support the industry.

 This exercise is deemed necessary in order to optimise the product specification that must be supported and/or create an understanding of the idea of value-chains that do exist 4.15 Introduction of Trade Measures to Protect and Support Development of the Local Cannabis Market  As part of proposed commercialisation, South Africa should consider imposing other technical requirements that would prevent imports and illicit trade e.g. clinical trials, preferences for domestic manufacturers.

Additional HS Codes should be developed for raw materials and finished products in this sector, both for hemp and cannabis.  Agencies such as NRCS, SABS, SAHPRA can be used to enforce standards to ensure that good quality products are sold on the market. South Africa can also consider imposing import duties to protect local manufacturing or production.

Streamlined import processes for hemp and cannabis products and clear labelling and testing requirements for imported products are also recommended.

The International Trade Administration Commission (ITAC) can be approached to conduct a general tariff review in line with the objectives of the NCMP. Regulation should also deal with competition issues, as competition may also threaten and push SMMEs cannabis out of the emerging legal cannabis industry. The Competition Commission (CompCom) must be approached on this aspect.

11.    Cannabis Market Expansion through increased Investments in Research and Technology Development Programmes 

Both the hemp and cannabis industry require substantial investments for programmes on research to be conducted in this area, and how this can positively impact development of new products in the market. Investments for technological research for the advancement of this sector is also advised in order to drive commercialisation efforts and ensure the industry is competitive.

12.   Establishment of Cannabis Industry Development Fund

The establishment of Cannabis Industry Development Fund is proposed. Annual contribution to the Fund will be made by all cannabis licencees (excluding hemp licences). Levies can be charged to deal with harmful effects of cannabis.

Departments of Social Development (DSD) and Correctional Services (DCS) will assist with the costing of the harmful effect in order to determine the contributions that need to be paid to the fund. 

The Fund will primarily be used for supporting the promotion and development of social and economic programmes in the cannabis industry as well as development of new products in the sector. The Fund will also contribute towards the development of the industry and supporting participation of designated groups.  Contribution to industrial development funding.

13.   Balanced Cannabis Industry Regulation 

It is in the interest of the South African society for its policymakers to keep in mind the livelihoods of the poor and the most economically vulnerable while protecting and introducing a new era on the commercialisation of cannabis. It is therefore important that this draft policy framework should seek to strike a balance between the economy and the health of its citizens, by paying due consideration to social, economic and health issues.

14.   Qualification or Eligibility Criteria for Licensing or Registration

This proposed framework will set a criterion or requirements that make applicants eligible for licensing of the various categories of licences and this may be covered in both the principal act as well as the regulations laying out a full criterion for qualification.

Criterion is therefore required and must then be adopted. If policy is going to be pro-poor and problack, it is important that these qualification criteria be that expressive 4.20 Exemptions Applications, Criteria and Consideration

This proposed policy hereby makes provision for applications for exemptions from the provisions of the policy from the hemp and cannabis industry stakeholders, i.e. those who may not want to have the commercialisation policy apply to them.

Such applications will be made with the Minister of the dtic for consideration.  The proposed policy recommends inclusions of applications for exemptions to those who do not want the policy to apply to their businesses or undertakings

15.   Licensing and Compliance 

Businesses involved in cultivation, sales, or exports must secure new licenses, categorized by cultivation scale (small, medium, or large). The established cannabis regulatory authority must be empowered to enforce compliance.

16.   Sales and (Advertising Practices) Marketing Restrictions.

This policy must control sales and marketing methods of cannabis products such as online sales, vending machines and promotional activities.

Cannabis may be incorporated into products like herbal remedies, medicines, food, and cosmetics, provided they comply with existing laws. By outlining appropriate sales and marketing practices on cannabis products, this policy proposal will ensure protection of consumer against unacceptable advertising or marketing practices and safeguard the sustainability of the sector.  

17.   Executive Authority and Mandate for the Implementation of the Policy 

The executive authority and mandate for the implementation of this proposed policy will vest in the Minister responsible for Trade, Industry and Competition (the dtic).

The draft policy will spell out the powers the Minister will exercise towards implementation of this proposed policy. The roles of the other Ministers or Departments will be spelled out and defined in the policy and may include their roles in the application, consideration, approval and issuing of licences to the prospective licence holders

18.   Institutional Arrangements for Implementation of the Policy 

As the executive authority responsible for the implementation of this policy will vest in the Minister of the dtic, it is proposed the appointment of a ministerial advisory committee on hemp and cannabis commercialisation. 

The functions and roles of the committee will include advising the Minister on policy and strategy; monitor and implementation of the policy; review of the policy; perform such other functions as may be consistent with the objectives and spirit of the proposed policy. 

Establishment of a multi-sectoral stakeholder coordinating committee on hemp and cannabis is proposed. It will serve as a co-ordinating structure involving government, industry, labour, consumers, non-governmental organisations (NGOs) etc, on matters involving commercialisation of hemp and cannabis.

Establishment of an implementing agency of the policy in the form of a licensing authority is proposed and such establishment of this agency must be accelerated.

This authority will be responsible for administrative implementation of the policy and will largely deal with matters such as development of national register of licensees, registrants, processing and issuing of licences, processing of applications for exemptions. T

The appointment of a ministerial advisory committee on hemp and cannabis commercialisation, establishment of a multisectoral stakeholder coordinating committee on cannabis and establishment of an implementing agency of the policy in the form of a licensing authority is hereby proposed.

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