Medigrow’s billion rand Coega industrial cannabis project is set to begin this month. Equipment has arrived at the site in the Eastern Cape, and the first hemp seeds are prepared for delivery to small-scale rural growers.
Transforming the Eastern Cape Economy
Medigrow’s Coega project is called Instango Extraction. The name "Ntsango" translates to cannabis in isiXhosa. This initiative has the potential to significantly change the economy of the Eastern Cape. This bold plan is a joint venture with the Eastern Cape government. Medigrow has pledged a R1 billion investment over five years. This investment aims to create an industrial cannabis economy. It could generate between R6 billion and R26 billion. Additionally, it is expected to bring about 30,000 traditional growers into the mainstream market.
The provincial government has committed R4 million from its budget to purchase seeds, fertilizers, and equipment. They emphasize their dedication to this project and the impact it will have on local farming communities.
In support of the project, the Eastern Cape government will procure essential supplies, including six tons of hemp seeds, 1,000 liters of herbicides, 1.3 tons of fertilizers, and fencing. Small-scale hemp farmers can profit by selling their cannabis to Medigrow for processing.
Support for Local Farmers
According to a report from City Press, the first delivery of hemp seeds will occur next week for 30 selected farmers. The project is designed to empower these local farmers, transforming their operations into licensed and sustainable businesses.
Imported equipment valued at R30 million is already on-site, awaiting assembly. Actual production is set to start in February. This initial investment focuses on establishing the indoor cannabis cultivation facility, along with cannabidiol (CBD) extraction, packaging, and pre-roll manufacturing.
The project occupies a massive 10,000-hectare area. When fully operational, it will process cannabis into various medicinal products and oils, creating around 30,000 job opportunities. The cannabis industry is anticipated to inject between R6 billion and R25 billion into the country’s gross domestic product (GDP).
Small-scale farmers currently growing cannabis illegally will benefit from this initiative. They will receive proper licensing and hemp seeds, allowing them to cultivate cannabis legally. The cannabis they grow will be sent to the Medigrow processing plant for conversion into finished products for both local and export markets.
A Personal Commitment to the Industry
Medigrow’s chief executive, Edgar Adams, expressed confidence in the project's success during an interview with City Press. He stated, “We have invested a lot of money into the project, so there is no chance of it failing.” His commitment to the cannabis industry is deeply personal. Adams's daughter passed away from cancer, which fueled his dedication to this enterprise.
"The project is progressing smoothly and on schedule," he noted, emphasizing the strong commitment from the Eastern Cape provincial government. "We are set to deliver hemp seeds to 28 selected and licensed rural farmers on January 27, 2025. The R30 million equipment is on-site, and production will commence next month."
The end products are intended for international markets, including the US, Europe, and Australia. Adams revealed that Nehawu, the workers' union, is a shareholder in Medigrow through its holding company, Nehawu Holdings.
“Our production practices adhere to international standards since we export our finished products to European markets,” Adams elaborated. “We receive the raw product from farmers and process everything here at Coega. Our processed products include CBD isolate and tetrahydrocannabinol (THC), the psychoactive component of the hemp plant, which has numerous medicinal uses.”
Regulatory Support and Future Prospects
Founded in 2017, Medigrow has operated as a consultancy for medicinal cannabis producers. They have assisted these producers in obtaining the necessary legislative licenses. Recently, the Eastern Cape Rural Development and Agrarian Reform Department announced that the Coega project represents the first stage of a commercial pilot project focused on hemp flower cultivation, supply, and delivery.
The Department has noted, "The Plant Improvement Act enables commercial hemp cultivation, regulated via a permit system. Farmers, importers, processors, manufacturers, and wholesalers must secure permits before entering the legal cannabis business."
The Eastern Cape government has injected R4 million into the project, demonstrating its commitment to this burgeoning industry. Eastern Cape Premier Oscar Mabuyane has been a vocal advocate for initiating the cannabis industry, recognizing the plant's potential in rural areas where it grows abundantly. He has previously remarked, “We cannot be missing in action when our province is endowed with a crop that can be ploughed and processed to make medicinal products and create jobs.”
The legislation signed by President Cyril Ramaphosa last year represents a crucial turning point. It is the first major step in the long-anticipated regulatory reform promised by the National Cannabis Masterplan. In his 2022 State of the Nation address, the potential for job creation and economic prosperity in rural communities through the industrialization of cannabis was a major point of discussion.
Medigrow’s project stands as a testament to this vision, blending economic development with social responsibility. The journey ahead looks promising as this initiative not only aims to enhance the local economy but also provides substantial benefits for rural communities.
Additionally, for interested individuals, information regarding further cannabis initiatives can be found on Medigrow's website.