Goodleaf’s Shewitz: SA Cannabis Entering A Brand New Chapter: Over 100 Cannabis Companies Are “Investment Ready”
The Goodleaf CEO estimates US$5 billion has been invested in the South African cannabis industry and that the market is set to grow exponentially in the next few years.
24 October 2022 at 09:00:00
Founder and CEO of cannabis consumer brand Goodleaf, Warren Shewitz says the main investment opportunities in cannabis right now are “in cultivation, processing and laboratories, then linking into brands and going backwards into manufacturing”.
In an opinion piece on IOL Online, Shewitz wrote “as billions of investment dollars pour in, the cannabis industry is finding itself entering a brand new chapter.
“Businesses are starting to take note of the potential within the cannabis industry with many investing in hemp-based and CBD products.”
He said that there were “in excess of 100 cannabis-related companies in South Africa are investment ready - mostly cultivation businesses” and that about US$5 billion (R334 million) has already been invested in the local industry.
“The key areas of investments are the cultivation of cannabis, followed by the extraction of oil from the plant, testing laboratories, the retail and branding of CBD products.
“As the industry grows, there will be a demand for services such as greenhouses, nutrients, plant growers, quality control systems and software” he said.
“There are also investment opportunities in the manufacture of pharmaceutical cannabis products (not a well-developed area in South Africa), but this requires a license from the South African Health Products Regulatory Authority (SAHPRA) and is a lengthy and expensive process.
“Hemp, a cannabis plant used for fiber to make clothes, also presents a gap for investment”.
Shewitz said the “global cannabis space is moving rapidly, and by 2024, it is expected to be worth a massive US$103 billion and that “according to the global cannabis market size and forecast report 2021: the sector will reach a whopping $176 billion by 2030”.
He praised the Cannabis Master Plan which was unveiled in June 2021, detailing how cannabis can be incorporated into South Africa’s business sector as part of the government's ongoing drive towards legalization and commercialisation.
He said Government had good reason to want to focus on this industry, as “the Department of Agriculture, Land Reform and Rural Development estimates that the cannabis industry is worth an estimated R28 billion in South Africa, and could create between 10 000 – 25 000 jobs across the sector”.
He said “Africa needs to unlock the economic value of cannabis cultivation. It has the potential to become a world leader in the cultivation of cannabis and its products.
“Unfortunately, burdensome global regulations and tight domestic controls stand in the way of creating a booming multi-billion-dollar industry.
“The African Cannabis Report cites the continent seeing the value of its legal cannabis rise to at least $7.1billion by 2023 across nine major African nations if they legalize medical use and recreational use.
South Africa has an incredibly rich heritage of medicinal plants, think rooibos, moringa, marula, baobab and Kalahari melon. The soothing, moisturizing and anti-inflammatory capacities of these plants echo those properties in CBD – making the combination a particularly powerful, organic product for skin vitality, which creates a compelling selling proposition.
He said the regulatory landscape was tricky to navigate
“Finding a liberal host country in which to cultivate is only part of the challenge of running a sophisticated global cannabis supply chain thwarted with tangled regulations, demanding export principles and industrial-scale competition in the developed world.
“Here on local shores, our government is busy reviewing regulatory and policy frameworks for cannabis and industrial hemp to realize the vast potential for job creation and investment.
He said South Africa was among “the most recent nations to rule firmly in support of a sector that has experienced an astounding transition from a universal shadow industry to an agro-industrial powerhouse.
“From lifestyle supplements to recreational smoking and medical cannabis, legal, medical, and cultural change is wafting the whiff of the once forbidden plant decisively into the global mainstream”.
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Cannabis in South Africa: The People’s Plant
We are a civil society organisation with the interests of the existing Cannabis industry and the Human Rights of ALL citizens at heart.
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