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Cannabiz Africa

24/09/13, 14:00

The South African legal sector has significant experience in dealing with cannabis legislation and is well-positioned to benefit from the regulatory reform that is taking place in the rest of the continent.

Schindlers Attorneys was the first South African firm to specialize in cannabis law. They provided extensive legal and moral support for Myrtle Clarke and Julian Stobbs in what became known as the “Dagga Couple”case, one that had a bearing on the Constitutional Court’s historic 2018 ruling legalizing the personal, private consumption of cannabis.


Since then, many other legal firms have entered the cannabis fray as the sector evolved from defending criminal cases into a far wider space of policy formulation, labour law, corporate advice, legal compliance and more recently debt leveraging services.


Once the Cannabis for Private Purposes Act finally becomes enacted, cannabis will automatically fall out of the Drugs and Drug Trafficking Act. This will clear the way for investment in the cannabis sector – and that should provide plenty of work for lawyers already familiar with the South African cannabis landscape.


Whereas most of the pioneering legal work was provided pro bono, times they are a-changing as Cabinet has signalled it will soon be consulting stakeholders on a commercialisation policy for cannabis. Most observers agree a legal cannabis sector could unlock R28 billion of value if an over-arching cannabis law was passed regulating full adult-use, instead of restricting legalization to the medical and industrial sub-sectors.


While there are growing opportunities for legal firms focussing on cannabis to grow their businesses in South Africa, the rest of the continent also holds promise.  To a greater or lesser extent, cannabis has been licensed (mostly for export purposes) in Lesotho, eSwatini, Zimbabwe, Malawi, Rwanda, Uganda, Ghana, Morocco and the DRC.


Law.com International reports that Eric Berlin, Dentons’ Chicago-based partner and global head of the firm’s cannabis practice, said South Africa’s offered significant commercial opportunities as the market develops. He expects demand for advice on regulatory aspects, intellectual property, patents and trademarks.


“There’s going to be a lot of transactions, including fundraising and debt,” he added.


The challenge for South Africa’s legal professionals will be how to harness the new energy, help government shape functional policies and advise the private sector on how best to take advantage of opportunities that will arise from a new regulatory framework.


Paul-Michael Keichel, a lawyer with South Africa’s leading cannabis firm Cullinan & Associates, told Law.com International that the industry was awaiting more detailed regulations following the passing of the Cannabis for Private Purposes Act. He said the government is expected to follow the legislative changes with regulations on the quantity of cannabis that may be cultivated for personal use and licensing processes. The licensing regime is expected to unlock more opportunities for law firms.


One of the firms that’s stepped up a notch with the new cannabis momentum in South Africa is Werksmans Attorneys, which advised medical cannabis company Cilo Cybin on its June 2024 listing on the JSE’s AltX. Another is Webber Wentzel, whose team helped draw up a draft of a new law that would govern the commercial trade in cannabis and related products while balancing them against potential harms that may arise with legalization.


If one looks to Europe, legal firms have profited enormously from the change in the regulatory landscape, particularly those in Germany.


Shaad Vayej, a South African lawyer and founder of industrial cannabis sourcing firm OpenFarms, said German firms began advising the industry long before the legalisation of cannabis “whether it be commercial regulatory, contractual drafting for offtake agreements or dispute resolution between parties.” He said South African lawyers should follow their example.


German law firms including, Heuking, SKW Schwarz, Nimrod Rechtsanwälte and KFN+ were offering legal advice in the cannabis sector before the decriminalisation of cannabis use on 1 April 2024. Heuking advised Berlin-based medical cannabis provider Cantourage Group on its listing in Frankfurt Stock Exchange in 2022  and KFN+ represents the European Industrial Hemp Association (EIHA), a group requesting novel food approval for various Cannabidiol CBD products in the EU Commission.


The potential target market for South African lawyers is far larger than the domestic landscape. Africa awaits.

In anticipation, South African firms Webber Wentzel and Cliffe Dekker Hofmeyr (CDH) told Law.com International they were drawing up expertise from existing practices within their firms.


“When looking at the various African countries where cannabis has been decriminalised, there is one major commonality, which is the acceptance of cultivation and use of cannabis in the medical and scientific sector,” CDH said in a legal briefing. “It is clear that there is significant potential for cannabis cultivation in the commercial sector, promising substantial revenue for farmers.”


Daveraj Sauls, an associate at Webber Wentzel, said the firm assisted in drafting regulatory documents for the office of the Presidency and is advising private sector clients, including a U.K-based company that required advice on the South African regulatory framework ahead of a planned listing on the London Stock Exchange. He declined to comment further, citing confidentiality.


Belinda Scriba, a director at CDH, said she didn’t foresee creating uniquely focused practices even if commercial growth for recreational usage became possible. “It is more likely that there will be advisors within wider sectors who have specialised cannabis knowledge.”


Developments in South Africa may impact Morocco, Malawi and Zimbabwe where recreational use of cannabis is still prohibited, according to Keichel.


“Some colleagues in other African countries, which are not yet cannabis liberal, are driving reform efforts, using their own constitutional laws and arguments, but often springboarding off our experience,” he told Law.com International.

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