The Presidency Says the Department of Trade and Industry and Competition should finalize a framework for cannabis legalization by the end of the year. It is looking to secure funding for an outside legal services provider to enable this.

Operation Vulindleza, the presidential initiative to fast track structural reforms to open up the economy, released a progress update on 22 August 2023.  Although most of the focus of the report was on electricity, water, Transnet and digital migration, it said that four new reforms have been added:

“(i) creating an appropriate legislative framework for hemp & cannabis,

(ii) enabling the devolution of passenger rail functions to local government,

(iii) titling reform for low-cost housing and

(iv) the development of a fit-for-purpose procurement regime for state-owned entities.

This is an excerpt from the Operation Vulindlela Progress Update: Two Years of Progress in Accelerating Economic Reform 2022/23 Q 3 Report:

CREATING AN APPROPRIATE LEGISLATIVE FRAMEWORK FOR HEMP & CANNABIS

In July 2019 Cabinet took a decision to implement a hemp and cannabis sector development plan to commercialise the sector noting the sector’s potential to increase economic growth, create jobs and alleviate poverty.

The President reaffirmed government’s intention to create an enabling regime for hemp and cannabis in the 2022 State of the Nation Address. In his speech, the President announced the potential for hemp and cannabis production to generate 130 000 new jobs and made explicit the need to ensure that traditional growers are included.

With its long history of cannabis production, it is estimated that South Africa has more than 900 000 small-scale farmers growing cannabis, in the Eastern Cape, KwaZulu-Natal and other provinces.

1. The cannabis sectors offers huge potential for the development of SMMEs, attracting domestic and foreign investment and adding economic value in the production of goods for domestic and export markets. In addition to the positive economic effects, liberalising the sector offers reduced expenditure on prohibition enforcement costs and increased tax revenue from legal sales. South Africa’s cannabis industry is estimated to be worth about R28 billion.

2. This pales in comparison to estimates of the global cannabis industry. The global legal market is projected to reach roughly US$90 billion by 2028.

3 Many other countries have already moved to capture this market through liberalisation and legalisation measures.

Amid this global trend and given the potential the cannabis industry offers in terms of economic growth and job creation, an inter-ministerial committee was established in 2019 to secure intra-government and inter-institutional policy coherence and programme alignment and implementation.

Subsequently, in 2020, the Department of Agriculture, Land Reform and Rural Development was tasked as the lead department to develop a Masterplan, a key component of government’s industrial strategy.

Operation Vulindlela is tasked with supporting the lead department and others in accelerating the reforms required to realise government’s objective of enabling economic activity in the hemp and cannabis sector.

A legal team has been appointed to prepare a set of interim measures, following engagements with the departments and institutions responsible for the existing regulatory framework.

These measures are intended to fast track enabling economic activity in the near term, until such time as an overarching, all-purpose Hemp and Cannabis Bill is developed. Work will commence to develop the latter as soon as funding has been secured and a legal service provider is appointed.

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