The Department of Trade, Industry and Competition (DTIC) says finance is one of the critical enablers to any industry and the South African  hemp and cannabis industry has “faced enormous obstacles in relation to investment and financing owing to the existing legislative framework.”

As the lead institution driving the National Cannabis Master Plan, the DTIC says it wants  Government to accelerate funding for the cannabis industry from SOE’s and financial institutions. In a draft discussion document the DTIC says it has “considered presentations on  the current cannabis finance ecosystems and discussed the current opportunities that can be leveraged to accelerate access to finance for the industry”.

The DTIC is preparing to release its draft guidelines for cannabis commercialization to the public soon, with one of its main recommendations being the creation of a central cannabis licensing authority which would be in charge of regulations and provide guidelines for the retail sector.

It is also seeking input on how the Master Plan should be funded and how that funding should best be employed.

“Government must prioritize financial funding, especially for small holder farmers and indigenous communities, to enable their participation in the industry”, reads the document which calls for the establishment of “Hemp and Cannabis Financial and Non-Financial Support Instruments from Government, SOEs and Financial Institutions” reads the document which is titled “National Policy on the Commercialisation of Hemp and Cannabis in South Africa: Towards a Comprehensive and Inclusive Hemp and Cannabis Commercialisation in South Africa: Revised Draft Discussion Document, June 2025).

At the same time the DTIC is to “engage with National Treasury for assistance in terms of the inclusion of the industry for purpose of taxation as the industry will be moving towards commercialisation”.

The Department says  “it is imperative for inclusion of the industry in the taxation regime” and wants  “tax incentives and allowances to be introduced to attract investments targeted at research & development in the sector.”

It says there is “a need for investments in establishment of manufacturing plants that will be used for producing food, medicine, beverages, cosmetics and a whole of other value-added products from raw material of both hemp and cannabis. “

The DTIC says Government intends identifying a number of hemp/cannabis value-added products that would have the most impact, especially those with “health and cosmetic benefits and are potentially in high demand”.

“ These should be targeted for piloting or assistance, as this could yield better outcomes than trying to spread limited resources to any and every cannabis/hemp product that requires support” suggests the discussion document. It wants  investments will come from government, private sector, donors and state-owned entities in a form of grants, soft loans, loans and blended finance to support growth and development of the industry .

“The establishment of hemp and cannabis financial and non-financial support instruments are proposed to support hemp and cannabis manufacturers in the food, beverages, cosmetics, medicine, fibre sectors and other hemp and cannabis-related sectors. Either subsidies and/or grants for hemp fibre should be directed toward aggregator hemp stalk decortication equipment and facilities. It is proposed that the Department of Agriculture (DOA) and its Direct

Foreign Investments (DFIs) should provide support to upstream activities such as growing and cultivation, while the dtic and its DFIs provides support for downstream processing such as technology and manufacturing.”

The DTIC says it wants  financing to be provided across the value chain, “from upstream to downstream opportunities with regulatory certainty.  This requires a funding model that would take the form of grant, loan and equity funding involving both private sector and public sector funders. “

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