Illegal Cannabis Market Thrives As Legal Vacuum Stymies Legit Mainstream Players
As 2023 draws to a close, it’s become clear that the initial excitement around the legalization of cannabis has waned as Government has failed to put into place any meaningful policy since the historic Concourt ruling of 2018.
William Brederode, News 24
27 December 2023 at 10:00:00
This article first appeared on News 24 on 21 December 2023
Legal uncertainties have stymied the growth of the cannabis industry in South Africa, after an initial frenzy of interest and activity following the decriminalisation of the substance under certain conditions in 2018.
This is according to Rozayne Malyo, the co-founder of the Cannabis Development Council of South Africa who also heads up Think Green Consulting, a cannabis consulting organisation.
"[When] cannabis was decriminalised, there was a lot of excitement initially. A lot of people were interested, a lot of new businesses popped up and so on. But, in terms of the market, I think it has slowed down a little bit because there are a lot of grey areas still," Malyo said.
In 2018, a ruling by the Constitutional Court decriminalised the personal and private cultivation, possession and use of cannabis for adults.
There was a lot of optimism about the industry following this.
A 2019 report on the African cannabis industry produced by Prohibition Partners, an international cannabis business intelligence firm, estimated that the South African cannabis industry would be worth $1.85 billion (R34 billion) by 2023.
As Paul-Michael Keichel, a specialist attorney at Cullinan & Associates, said in a recent News24 article that "private grow clubs" started operating at this time, but authorities cracked down on them.
It is hoped that the Cannabis For Private Purposes Bill, which is currently before the National Council of Provinces, will bring some clarity for the industry if passed, Keichel said in the article.
For now, however, over five years after the Constitutional Court judgment, businesses in the sector still aren't sure how to run their operations legally.
Frank Rosen, the founder of cannabis products maker and retailer Canabliss, said the lack of clarity was "incredibly infuriating" for businesses and law enforcement officials alike.
He feels as though his company is "trading on the fringe" and desperately wants clarity on how he should be operating to comply with the law.
"Would legislation done properly be of value? Most definitely," he said.
Rosen is a proponent of the medicinal properties of cannabis. He says Canabliss has in-house medical professionals, including a physiotherapist, psychologist and, until very recently, a pharmacist.
"If I never sold another recreational product, it wouldn't worry me if I knew I could sell the medicinal side legally," he said.
A growing number of his clients think similarly, he claimed.
"Before, if you said 'I take cannabis for this', people would be like 'Oh my God. Pariah! He's a stoner. He's a drug addict.' Now, however, we are getting people of all ages coming to us."
Rosen added that he has clients aged from 30 to perhaps 95, who come to Canabliss for products to help with their various medical issues.
With the shifting user base, authorities are increasingly struggling to crack down on cannabis businesses and users.
Malyo said laws regulating the operations of cannabis businesses also seemed to be haphazardly applied.
"There are several things that are not clear in terms of cannabis shops because some people get arrested and then you find some other shops that are intact. We are trying to figure out what laws they are working on," she said.
Malyo also said the more restrictions there are for cannabis products, the more trade would be funnelled through the black market for cannabis.
"The black market is still thriving. It is thriving much more than [it would if cannabis products trade were] legal," she said.
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