The private sector has fallen by the wayside in helping formulate South African cannabis policy. Government’s recent announcement that it would soon consult stakeholders on cannabis commercialization has highlighted the lack of any umbrella body that represents private sector interests.

The Presidency’s commitment over 12 months ago to include the private sector in creating an over-arching cannabis policy framework for the country, nothing has materialized.

The public/private structures envisaged in The Phakisa have not been set up and neither have there been any formal discussions with non-government stakeholders since the Private Sector Working Group fell apart in mid-2022.

While the Presidency briefed the media last week on progress in aligning government departments around cannabis policy, the silence from the private sector on these developments has been striking.

That’s because there is no one credible body that represents private sector cannabis stakeholders, let alone a co-ordinated lobby group pushing a market-friendly regulatory system.

Several private sector stakeholders have shared with Cannabiz Africa that there is no umbrella body that represents their interests in negotiating with government.  One business person who wished to remain anonymous, said: “This could cost us dearly because if commercialization of cannabis is left up to the government alone, it would be a disaster. The industry needs to come together again, like it did before during the 2023 parliamentary hearings on the Cannabis Bill, and speak with one voice”.

The latest call for better collaboration amongst stakeholders comes from Johann Slabber, founder and CEO of integrated agricultural and pharmaceutical company Nexus Pharma. He told Business Tech on 9 September 2024 that the lack of consolidated plans for the cannabis sector and the means of enforcing these plans, had led to the demise of the National Cannabis Master Plan.

A practical way to resurrect the plan, says Slabber, would be to revive the private sector working groups that had been facilitated by consultant M Ayanda Bam’s initiative in 2022.

He wrote in May last year: “Progress seemed promising as the president put together Cannabis Masterplan working groups and workstreams consisting of stakeholders from the state and private sector to create a regulatory framework.

“But these groups have collapsed and disappeared without a trace, a disappointing outcome for such a promising project. We cannot afford to stall on this. In a country where over 7.8-million people are unemployed, job creation should be a priority.”

Slabber, who cut his operational teeth at Cilo Cybin before establishing Nexus, told Business Tech's Seth Thorne that South Africa could have been the biggest player in the global cannabis industry but policy dithering had probably led to R30 billion in lost value.

The absence of a regulated local market has put considerable pressure on the 110 or so licensed SAHPRA growers who are not allowed to release non-export cannabis into the local market. It’s an open secret in the industry that many cultivators are struggling to meet stringent export requirements and have been offloading flower into the local market anyway. Many of the grey zone cannabis outlets that have proliferated in the last year are believed to source from licensed operators, which in effect means the black market is booming.

“This is a massive problem we’re facing in South Africa,” said Slabber.

“Unfortunately, sites have invested millions in setting up the infrastructure for commercial cannabis and desperate for the return on investment. Being inhibited has led to many of them supplying to the illicit markets and now we’re sitting in a situation where there’s more product on the illicit markets through licenced producers than there were before the issuing of licences,” he added.

Slabber favours a dual approach to addressing these challenges: clamp down on the non-compliers and help the legal guys get to market.

In his words, the industry needs “immediate interventions” to:

· Enhance Regulatory Enforcement: Strengthen measures to crack down on unlicensed operators and ensure compliance among licensed entities.

· Facilitate Market Access: Streamline export processes and provide clear guidance to growers, helping them navigate market challenges and reduce illegal practices.

Slabber has proposed creating a National Cannabis Compliance and Marketing Initiative, which would unite the private and public sector stakeholders to address industry challenges and bottlenecks.

“Perhaps we can take a lesson from Germany where well-designed regulations for recreational use have been crucial in preventing misuse and ensuring equitable market access,” said Slabber.

“As South Africa develops regulations for this segment, it is vital to establish measures that prevent indiscriminate use while also supporting smaller farmers and businesses. This balanced approach will help address immediate local market needs and support long-term industry growth,” he added.