SA Finance Minister calls for Full Legalization of Cannabis as a “Taxable Product”

South Africa’s Finance Minister Tito Mboweni has called for the full legalization of cannabis. He says cannabis should be a “legal, taxable product that generates money for the fiscus, creates jobs and brings illegal farmers into the economic mainstream.

The Minister was in private conversation with Cannabiz Africa publisher Brett Hilton-Barber near Tzaneen in Limpopo, welcoming the fact that the National Cannabis Master Plan (NCMP) is likely to be presented to Nedlac this week. Nedlac is a forum of key economic stakeholders that Mboweni was instrumental in setting up during his time as Labour Minister.

 

 

Tito Mboweni Cannabiz Africa Exclusive

Mboweni: Let them smoke weed: cannabis should be a ‘legal, taxable product”

 

Mboweni: legalize as quickly as possible

 “We must move as quickly as possible towards legalization” he said on 23 May 2021. “It’s already growing in profusion all over the country, but especially in the Eastern Cape.  When it becomes legal, there’s probably at least R4 billion in tax revenue from parts of that province alone, especially what was formerly known as Transkei.”

The NCMP is now under control of the Department of Agriculture, Land Reform and Rural Development (DALRRD)  which envisages the establishment of cannabis or hemp regional agri-processing hubs to empower small-scale farmers.  The NCMP is part of a broader initiative by Minister Thoko Didiza to boost agriculture’s contribution to GDP from its current 13% to 20%.  

The NCMP is expected to be discussed at Nedlac’s Trade and Industry forum scheduled for 26 May 2021. Although the NCMP has been broadly welcomed by pro-cannabis legalization groups, it has been criticized for its lack of vision for a local market.  By the government’s own estimates there are at least 3,5 million South Africans who regularly consume cannabis and about 900 000 illegal cannabis farmers in the country, centred mostly in the Eastern Cape.

 

 

Eastern Cape region the center of South African illegal cannabis production 

 

“Let them smoke legally” the Minister said. “The constitution already allows it. They’re already doing it. The main thing is for parliament to change the necessary laws so that cannabis can boost the economy”.

 

NCMP: value of illegal cannabis market: R28 billion

The NCMP says the current value of the SA cannabis market is about R28 billion, of which only a fraction of which is legal.  All the legal cannabis is for export only and is being produced by the 16 growers currently licensed by the South African Health Products Regulatory Authority (SAHPRA).

The NCMP envisages the licensing process for small scale farmers be taken over by DALRDD instead of the Department of Health.  However, it envisages the development of a new hemp industry rather than the complete legalization of illicit cannabis farmers. Until this policy contradiction is resolved and changed by law, police continue to make cannabis arrests, action that has drawn wide criticism from Fields of Green for All (FGFA), the Marijuana Board of South Africa (MBOSA) and law firm Schindlers Attorneys.

There are 9 supporting pillars to the NCMP which envisages opening up the entire cannabis value chain to entrepreneurs, farmers and community organizations. However, for this to happen, there’ll need to be far reaching legislative change. Agriculture Minister Didiza says hemp licenses will be issued by October 2021, but has made no mention of how this will impact on the million or so illegal cannabis growers.

 

(Tito Mboweni, via Twitter)

Mboweni posted about the plant on 9 January 2021, with a promise to push for the legalisation of dagga. He remains a firm proponent of full legalisation, with an eye to the tax revenue the SA government could claim from legal production.

Mboweni’s has been calling for cannabis legalization since he discovered an illegal cannabis plantation on his Limpopo Farm in early 2020. He said his legal team advised him to have the plants on his property pulled out, which he duly did, but said it seemed a travesty that a plant that grew so easily and had such economic potential should be illegal.

 

8 Comments

  1. Gauteng must be a cannabis capital with southern corridor, former known as Vaal triangle as a testing model. Southern corridor competency is tourism and agriculture. Cannabis must be open to agriculture, local trade, job creation/ LABOUR, craft growers /small scale farmers and RSA tax so that it’s not limited to health and only 16 SAHPRA

    1. Actually, we should more influx of tourisists to go on tours to cannabis friendly farms and venues, coffee shops, local merchandise etc

    2. We are now hopefully going to get a regulated industry. Unregulated plant and grower. A Board or Co- op or Hub as the Fields of Green proposal should be established. This body will then purchase all production after grading and testing has been done. Ideally tax should be deducted and Paid over to Sars.

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