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Section 21 Insanity! Local Cultivators Cut Out of Medical Cannabis Schemes as SA Imports Flower from Canada!

Section 21 Insanity! Local Cultivators Cut Out of Medical Cannabis Schemes as SA Imports Flower from Canada!

Alas there appears no end to Government bungling cannabis reform. The latest sorry story is around the Section 21 Medical Cannabis scheme which is ridiculously open to abuse and being manipulated by Canadian exporters and local cannabis dealers.

Cannabiz Africa

12 December 2022 at 10:00:00

In yet another sign of complete policy dysfunctionality, there is no legal mechanism in place for SAHPRA-licensed cannabis growers to provide the country’s growing number of medical cannabis patients. This has provided a gap for Canada, which is sitting on a cannabis surplus, to export flower to South Africa’s Section 21 Medical Cannabis Schemes!

The Global Cannabis Report 2022 confirms that “a number of international cannabis companies, such as The Green Organic Dutchman, have exported medical cannabis to South Africa under Section 21, with only a select few local producers being integrated into the supply chain.”

And back home, local producers are having a tough time with fewer than 6 of the 80 or so licensed SAHPRA cultivators having cracked the export market. CGR identifies the main South African facilities: FarmaGrowers, SafriCanna, Felbridge, Cilo Cybin, Rascal Seed Research Laboratories, Chroni-Co and Geo Greenhealth.

It’s an all-or-nothing game as if a cultivator cannot fulfil an offtake agreement there’s no legal domestic market for them to supply. It’s not surprising that a handful of  SAHPRA license holders are alleged to have dumped their export rejects into the local illicit market.

Just let that sink in for a moment!

The GCR’s authors, Prohibition Partners and the ACA Group, have highlighted serious flaws in how South Africa is rolling out its medical cannabis patient programme.

They estimate there are about 1 000 people registered under Section 21 schemes, but no official statistics have been forthcoming from SAHPRA. There are at least five Section 21 medical cannabis schemes Cannabiz Africa is aware of, but there is no central registry or repository of information that is available.

The GCR points out that countries such as Germany, Australia and Israel have over 150,000 registered medical cannabis patients supporting the development of the sector, further improving their global competitiveness, R&D investment spending and international integration.

South Africa, by contrast, stands clueless and confused. The main problem, they say is that the local cannabis industry’s growth potential is hampered by not allowing for broad access to the medical cannabis supplied by local cultivators.

As one local stakeholder commented: “The extent of the dysfunctionality is profound. Government has ticked all the right boxes in recognizing the potential of cannabis and hemp to really give the economy a boost, but it can’t seem to get all the cogs moving in the same direction. Cannabis has been identified as a key economic driver by the President himself, he has a heavyweight cannabis advisor tasked with getting Government departments onto the same page, the provinces are raring to go, state financial institutions are putting mechanisms in place to finance hemp and cannabis cultivation, and yet it all comes to nothing. Why? Because Government seems incapable of putting laws into place that reflect its own policies!

“As everybody has pointed out ad nauseum, nothing can happen until a cohesive regulatory framework is put in place. Unfortunately, with cannabis continuing to be included as a scheduled substance under the new version of the Drugs Trafficking Act, things are actually going backwards and, from a cannabis industry perspective we’re going into 2023 with less hope than we had going in to 2022, when the President, in his State of the Nation Address, pledged to put in place a regulatory framework for the cannabis industry as a matter of urgency. I wonder what he’s going to say this next year around, assuming he’s still in office!”

Another stakeholder who wished to remain anonymous, said he thought the situation was worse. There were elements in Government who wanted to drag out cannabis legalization for as long as possible because they were receiving kickbacks from the black market.

“Think about it. By Government’s own estimates the South African cannabis market is worth R28 billion, 90% of it illegal! You can’t have that much money floating around without cops being on the take. Interpol ranks South Africa as one of the main illegal cannabis exporters to Europe, but it’s not just about cannabis. As long as cannabis remains illegal it’s a black market commodity like abalone, rhino horn, heroin, and so forth, controlled by criminal networks, who by all accounts have infiltrated officialdom and have no motivation to see the plant legalized.

Cannabiz Africa also understands that the system has been manipulated by certain cannabis dealers who have facilitated their own Section 21 schemes as a cover for moving recreational cannabis to their clients!

There’s also no clarity from the Department of Health as to whether the Section 21 medical cannabis schemes are here to stay or whether they are an interim measure. The lack of clear communication and an established framework for local cannabis distribution has been a source of frustration in the industry.

For example, South Africa currently doesn’t have a monograph or any well communicated guidelines for doctors, patients, and cultivators with regard to medical cannabis.

It’s still unclear whether the Department of Health and SAHPRA intend to scale this scheme in a similar way to Australia, or whether the scheme is still intended for exceptional medical cases.  Any which way, the GCR says until local cultivators are integrated into the medical cannabis supply chain, the sector won’t grow.

Looking at the law as it stands: in South Africa, medical professionals are permitted to apply to SAHPRA to utilise unregistered medicines for patients. Any doctor registered with the South African Health Professions Council is able to utilise Section 21 to prescribe medical cannabis. Doctors are not limited to specific indications when prescribing cannabis, but must provide a rationale on why medical cannabis is suitable for their patient’s medical condition.

Medical cannabis is not currently covered by medical aid or health insurance in South Africa. The fee for a Section 21 application is currently R350 or roughly US$20.

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