Pivoting from the “Grey Zone”

The retail cannabis space is expanding rapidly with a mass of independent “grey zone” outlets springing up across the country. This has coincided with a vast array of new cannabis-related products making their way onto the market, particularly edibles, which have taken off as a consumer segment in the last 12 months.

Although very few products are SAHPRA-approved, retailers are taking advantage of consumer demand and stocking their shelves with international and home-made products. Although the commercial trade in cannabis is still illegal, the new Cannabis Act permits consumption on private property and foresees the removal of cannabis from the Drugs Act entirely. Many new cannabis products are non-psychoactive with benefits that relieve pain and anxiety, overcome insomnia and combat inflation.

With the advancement of the industry in both the medical and recreational sectors, the range of CBD and THC products available have exceeded everyone’s expectations. There is a wide range of CBD products available on the open market. These products range from bud to infused spices and everything in between.

JSE-listed CannAfrica was the first local company to see the potential of a franchise for its wellness brand of cannabis products and this is a key part of its store roll-out strategy. It has a network of 65 agents across the country with franchises in Sandton, Pretoria, Waterfall Mall and Ontdekkers.

PotAround initial uptake in Gauteng and KZN, W Cape next

A new cannabis franchiser has entered the market with a model developed by Cannabis Central, South Africa’s first mall dedicated to cannabis and related products, which opened its doors in Cedar Drive in Fourways earlier this year. Andrew Ward and Richard Fuller, (pictured above) co-founders of Cannabis Central, have launched a Pot Around franchise and have already signed up twelve franchisees in Gauteng and KwaZulu Natal and is negotiating with potential partners in the Western Cape.

“It’s very straightforward” says Ward. “At Cannabis Central we have over 2 000 products under our roof. We’ve come to understand consumer behaviour and what people are buying. Pot Around, which falls under the Cannabis Brand, offers franchisees a curated selection of our fastest moving products”.

Ward says his target market is cannabis entrepreneurs who have suitable locations across the country. He’s already sold franchises in Gauteng in: North Riding, Wilgeheuwal, Rivonia, Sunninghill, Northcliffe, Edenvale, Melville amongst various other locations. PotAround is expanding into the Cape, Free State and Natal.

In KZN, Pot Around franchises are opening soon in Richards Bay and Pietermaritzburg.

“All in all it costs R460k to set up a Pot Around franchise, which consists of R150k of stock, shopfittings, training and legal and admin costs” says Ward. “No franchise royalties are charged, but there is a monthly fee to cover point-of-sale equipment, bookkeeping and legal expenses.

“One of the major banks have come on board and provide and easy and quick solution for your POS system, accounts and any financing requirements. The franschisor’s income is through proving the franchisee with stock”.

“It’s an exclusive arrangement, of course” says Ward. “Our franchisees must only source from us, but we guarantee to stock them with a range of top quality product that is consistent and a proven seller”.

Cannabis is much more than a psychoactive substance

Ward says the main Pot Around range is associated with health and lifestyle, such as edibles, oils, tinctures and other legal cannabis products.

He says “We put a lot of work and time into providing the market with new and exciting products. We carry a wide range of products suited for everyone’s needs. We have customers from all walks of life ranging from the single person right up to families and even grandparents".

PotAround and Miracle Means have gone into a partnership agreement to offer franchisees a club model. They will be opening up additional smoke lounges together in key locations in the country

Ward points out that there’s a lot more to cannabis than its famed psychoactive properties.  Not that he and Fuller would know better. He says neither have smoked a joint in their lives, and no THC edible has passed their lips.

“In a way that’s been to our advantage as our approach to cannabis retail is motivated purely by business principles and not ideology”.

He says Cannabis-related products have undisputed health benefits, particularly in treating pain and inflammation, helping sleep and boosting appetite. But there are a plethora of other cannabis products coming onto the market from hemp clothing and accessories to CBD-infused beverages, through to an array of edibles and infusions that promote a sense of well-being and calm.

Cannabis Central capitalizing on “choice and wellness lifestyle”

PotAround is the second novel cannabis concept that Ward has bought to market. He, along with Richard Fuller, established Cannabis Central (CC) in March this year.

“There was never a doubt in our minds that the timing to launch Cannabis Central was right and the market needed it” says Ward, who in a previous incarnation was a pig farmer in the Cradle Of Humankind before focusing on animal wellness before entering the cannabis space. Fuller comes from the autotrade business and runs Reventon Auto.

Ward says the concept behind CC is that of associating cannabis with a “choice and wellness lifestyle” as opposed to being a mere head shop emporium. He points to the Padel courts and Virgin Active Gym next door, saying that the area is already a “health hub” and that cannabis is a natural extension.

“This made this location ideal” they said, adding that as a consequence of Covid, Reverton Motors, owner of the site, had scaled back on its display rooms. Reverton director Fuller and Ward came up with the concept after a 30-minute conversation and the two invested in an overhaul of the used car floor, turning it into a clean, minimalistic retail centre catering for speciality cannabis product shops. They used their own funds and did their own renovations over 14 months to prepare for opening day earlier this year.

Besides retail, CC is also registered as an NPO private club and can also offer a SAHPRA compliant medical prescription service. In keeping with the health and wellness ethos, alcohol is not served on the premises. Instead, there are a range of cannabis-infused refreshments such as teas and soft drinks. Smoking is restricted to consumption areas.

“We don’t want people seeking health products having to deal with smoke”, says Ward.

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