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Good GNU’s For The SA Cannabis Sector Now That Election Jitters Have Settled

Good GNU’s For The SA Cannabis Sector Now That Election Jitters Have Settled

South Africa has a new Government of National Unity, and although it’s early days, the new dispensation augers well for South Africa’s fledgling cannabis industry. President Ramaphosa’s consolidation of power in the ANC and the inclusion of the pro-business DA may well be the right mix to lay the framework for a regulated commercial cannabis industry.

Brett Hilton-Barber, Publisher, Cannabiz Africa

21 June 2024 at 09:00:00

With South Africa’s general election now out the way and a GNU in the process of formation, there is likely to be more certainty on the commercialization of cannabis and related products within the next six to 12 months. 

The President is already a convert to the “whole plant” approach and has included cannabis in the Operation Vulundlela fold, an initiative aimed at eliminating structural bottle-necks to unleash the economy. However, his Operation Phakisa project has faltered since its grand inception 12 months ago, and the absence of any mention of cannabis in his State of the Nation address in February 2024 was noticeable.

But since then he has signed into law the Cannabis for Private Purposes Act, which will have a significant impact on the cannabis landscape, mainly because it envisages cannabis being removed entirely from the Drugs and Drug Trafficking Act and the plant ultimately being regulated by the Department of Agriculture rather than the Justice cluster.

The Drugs Act has been the biggest impediment to mainstream finance investing in the South African cannabis industry. The change in law will especially benefit the agricultural sector as big business will be able to invest in the government’s plans to grow the industrial cannabis (hemp) market.

The changing landscape is also good news for first-mover advantage cannabis investment companies such as Silverleaf, as well as for conventional investors with Cilo Cybin due for a JSE listing next week.

Although the CfPPA is an imperfect piece of legislation based on a court ruling rather than government policy, it clears the way for cannabis to be treated as an agricultural product that can significantly add to the country’s GDP.

At the time of publication no cabinet posts in the GNU had been announced, although it’s known that the DA has its sights set on inclusion in the health and trade and industry ministries, both of which are key departments in developing the next phase of the country’s cannabis strategy.

On a provincial level, the Eastern Cape and KwaZulu Natal are likely to give impetus to the inclusion of legacy growers in the industrial cannabis chain.  

In the Eastern Cape, Oscar Mabuyane has retained the premiership, and has adopted the development of the Coega SEZ into a cannabis hub in partnership with Medigrow. In KZN, the IFP’s provincial GNU with the ANC will see the expansion of the pilot projects in Bergville and the development of a cannabis hub in the Vryheid area. KZN has already pioneered the inclusion of legacy growers in the existing regulatory framework. The Free State has also signalled its intentions to grow its cannabis sector with the identification of Springfontein as a potential ‘hub’.

In the meantime the “grey” market in cannabis retail is flourishing in urban areas, with consumers spoilt for choice by an exploding range of cannabis products. The reality is that THC products are more available than ever before, especially in Johannesburg, Pretoria, Durban and Cape Town, where cannabis outlets can be easily Googled. SAHPRA has yet to issue any license for the production or retail of  THC products for the domestic market, but that has not deterred cannabis entrepreneurs and consumers from bringing cannabis into the mainstream.


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