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5 Take-outs on where South African Medical Marijuana is Heading

The South African medical marijuana market is heading for double digit growth over the next five years and will eat into recreational cannabis revenue.  Spend on medical cannabis products is estimated to have been around R2,6 billion (US$162,6) in 2019, accounting for 11,8% of the market. This is expected to rise to R9,97 billion in 2024, when it will account for over 30% of the cannabis market.

 

Read about CBD in Southern Africa

 

These figures are published in Birguid’s Southern African Cannabis Industry Analysis April 2020, the most comprehensive cannabis research on the region to date. Lead researcher on the project, James Maposa, says the dramatic changes in the legal framework governing medicinal marijuana will see significant shifts in spend. Read Birguid’s July 2021 Cannabis Industry Report in Southern Africa here.

These are Cannabiz Africa’s five take-outs on the South African medicinal marijuana landscape:

1 – Medical marijuana will drive the legal cannabis market for the next 5 years

The changing legal landscape will open up the floodgates for medical cannabis on two fronts: domestic retail sales and export agriculture; medicinal cannabis sales will eat into recreational spend and will account for over 30% of the cannabis market by 2024.


2 – CBD sales are likely to experience double digit growth 

CBD sales accounted for R2,6 billion in 2019; this will rise to a staggering R10 billion by 2024 based on current projections. The change of law has already seen a roll-out of CBD retail outlets in South Africa and this is set to develop into a nationwide footprint within the next five years.


3 – Clinical trials will open the way for consumer acceptance:

Further clinical trials are required for the CBD market to develop; these will focus on the efficacy of CBD in treatments of chronic pain, stress and anxiety, HIV-Aids, nausea and seizures in a southern African context; this will develop the foundation for a strong consumer market which also needs to be researched, particularly in terms of product pricing.

 

4 – Substantial infrastructure investment is underway

Significant investment required in producing cannabis for export or rolling out a chain of CBD retail stores; this investment is having a knock-on effect on the rest of the economy and investors are hoping for good returns in a depressed economic environment.

 

SA cannabis store, cbd shop cape town, inside SA marijuana shop,

CBD store roll-out has begun in SA – heading for a national footprint


5 – Stigmatization will remain a factor for the foreseeable future:

Cannabis products may still be viewed with suspicion by more conservative elements of society; there is also a psychological barrier that first-time users have to overcome to buy CBD products although this may be over-stated; much of the advertising spend, product display and point-of-sale branding will be geared at educating consumers and overcoming the stigma of cannabis being a ‘bad drug’.

 

 

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