The Southern African Cannabis Market generated an estimated R21,92 billion (US$1,37 billion) in legal and illegal cannabis revenue in 2019. This is expected to rise by between 6 and 7 % over the next four years as deregulation sweeps through the subcontinent, and the forecast for 2024 is a turnover of US$2 billion (R32 million).
Southern African Cannabis Market Expected to Grow at 6 – 7%
That’s according to the Birguid’s Southern African Cannabis Industry Analysis April 2020, that’s just been published (find Birguid’s July 2021 Cannabis Industry Report for Southern Africa) here report here. Birguid reports that the region’s cannabis revenue grew from US$1,9 m in 2015 at between three and four percent but that growth is expected to increase significanty to around 6 to 7 percent over the next five years. Growth will be fuelled by increased legal consumption as deregulation spreads through the subcontinent. The overall price of cannabis is expected to drop as the pace of legalization continues.
The future is in these hands
The three key drivers are:
- the Medicinal marijuana export markets
- the Medicinal marijuana domestic markets
- the Legalization and commercialization of recreational marijuana
Recreational use will dominate spend but CBD will grow fastest
Recreational cannabis will remain the largest generator within the industry for the foreseeable future, but that medical cannabis is expected to show the fastest growth as southern African countries open their domestic markets to CBD products.
Maposa says the Covid-19 pandemic will reduce demand in the short- to medium-term for cannabis but that the overall industry is heading in a positive direction – providing regulatory issues are resolved. Another major inhibitor he identified is the high cost associated with producing medical marijuana