Rise of Sophisticated Illegal Cannabis Grow Ops and Government Policy Vacuum Push Legacy Growers into Poverty
Business Day reports that legacy cannabis growers in rural areas are increasingly vulnerable as several clandestine large-scale hydroponic facilities have come into production and are able to cultivate better, year-round crops to support the local adult-use market
Michael Schmidt, Business Day
17 February 2023 at 08:00:00
Business Day’s Michael Schmidt reports that the end of SA’s century-old war on dagga use announced during President Cyril Ramaphosa’s Sona address last year gathered momentum with last week’s commitments to creating “enabling conditions” to “unlock enormous economic energy in the rural areas of the country”.
But the delay in decriminalising the uses of the plant — arguably SA’s most famous, if illicit, export — has created a grey area in which millionaire entrepreneurs are already setting up industrial-scale facilities that have stolen a march on traditional rural cannabis farmers, the government’s developmental target.
The erosion of the criminalisation of cannabis started with a landmark Constitutional Court ruling in 2018 that allowed private, personal consumption on the basis of cultural and religious freedoms.
Though the ruling is still proscriptive — commercial-scale growing, sales, or smoking in public are prohibited — it has since been honoured more in the breach, with an estimated 900,000 new dagga farmers emerging, and cannabis-based businesses sprouting across the country. They peddle an array of paraphernalia and applications, from medicinal and veterinary to textiles and recreational.
Faced with the need to bolster post-pandemic economic recovery, the government appears to have gone for full decriminalisation of an already thriving industry, though Ramaphosa said that had still to be aligned with pending legislative reform.
A Gauteng marijuana industry insider told Business Day the legislative and regulatory vacuum meant they had to operate “under the radar” until the law and departmental rules aligned. Several clandestine multimillion-rand facilities are operating in the country, cultivating hydroponic crops for export, mostly to Europe. That was confirmed by a Western Cape insider.
Growing the plants hydroponically in laboratory-like conditions enables consistent quality control, the elimination of pests (and pesticides), and year-round growing. Traditional crops are susceptible to pests, bud-rot that can cause lung infections in smokers, soil and weather conditions, and other environmental contaminants — and they are seasonal.
In last year’s SONA, Ramaphosa said the government’s intention was to turn “this age-old commodity” into a legitimate economic sector, and pledged the government “will review the policy and regulatory framework for industrial hemp and cannabis to realise the huge potential for investment and job creation”.
Ramaphosa noted that the “hemp and cannabis sector have the potential to create more than 130,000 new jobs.” That’s equivalent to the employment of defence-related industries at the height of apartheid in the late 1980s. Still, the Gauteng insider says that is a gross underestimation. “In the US, it grew into a multibillion-dollar industry within two weeks” of legalisation in 21 states, he said.
The SA department of agriculture, land reform and rural development estimated last October that the sector was already worth R28bn annually. No doubt the government has its eye on a potentially considerable source of additional revenue to its sin taxes on alcohol and cigarettes, which were severely curtailed during the Covid-19 severe lockdown restrictions.
While Ramaphosa hinted at industrial-scaled operations of the kind already under way in the shadows, much legalised dagga farming can be expected to remain at subsistence level in the poverty-stricken rural areas of provinces like “the Eastern Cape, KwaZulu-Natal, and Mpumalanga” with the “collection of harvests from traditional farmers” being processed and marketed by professional companies.
“We are,” he said, “streamlining the regulatory processes so that the hemp and cannabis sector can thrive like it is in other countries such as Lesotho.”
Lesotho’s cannabis trade dates back to at least the 16th century when the Bakoena tribe used it to barter for land. Today it is the country’s biggest cash crop and the source of about 70% of the cannabis sold in SA — and in the past even led to the SA Army being deployed at great cost to intercept shipments over the Drakensberg.
Though it remains illegal for most uses, its cultivation in Lesotho is tolerated because of rural communities’ extreme poverty. In 2017 the country was the first in Africa to legalise medicinal marijuana. Four Canadian companies and one each from the UK, the US and Israel were licensed to grow and export the product.
SA’s war on cannabis began in 1916 when it was proscribed alongside opium, though as Associate Prof Thembisa Waetjen of Wits University writes in a recently published study, it took aggressive form in 1971 with the passing of the Abuse of Dependence-Producing Substances and Rehabilitation Centres Act.
The law was based on the findings of the Grobbler Commission of Inquiry that had narrowly focused on “white ‘hippy’ youth,” Waetjen says, and their “misuse of synthetic and pharmaceutical drugs such as LSD, Mandrax (methaqualone) and heroin”.
Though the commission found drug abuse to be marginal among whites, the ruling National Party described it as “a form of terrorism that is more dangerous than the armed terrorism we are familiar with on our country’s borders”.
The lone liberal voice in parliament at the time, Helen Suzman, pointed out that the proposed law would also criminalise the huge black-owned commercial, and arguably far less harmful, cannabis industry. That was probably the intent, as the act provided, like the antiterrorism laws, for detention without trial and harsh minimum prison sentences.
The ANC’s 1992 Drugs and Drug Trafficking Act merely “reproduced the heavy-handed tactics it had inherited from the apartheid National Party: militarised suppression, [herbicidal crop] spraying and incarcerations”, Waetjen adds.
Now, Ramaphosa has promised “an enabling regulatory framework for a whole-plant, all-legitimate-purposes approach for complimentary medicines, food, cosmetics, and industrial products, aligned to international conventions and best practices,” he says. "This includes the reprioritisation of departmental budgets for sector development and support for traditional, black farmers.”
While touting an inclusive economic model, Waetjen warns that “in an opening cannabis economy, rural cultivators remain in a vulnerable position against more powerful interests”.
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