DM168

BUSINESS MAVERICK 168

Cannabis Master Plan: The search for the pot of gold

Cannabis Master Plan: The search for the pot of gold

Cannabis Master Plan is out; hopefully legalisation drive won’t go up in smoke.

First published in the Daily Maverick 168 weekly newspaper.

A lot of rolling papers – Rizla being a standard brand – are sold in South Africa. Loose tobacco, a legal product, is also sold fairly widely. There is no data on this that this correspondent is aware of, but one suspects that there is a disconnect between the number of rolling papers sold and the amount of loose tobacco that is sold.

By this I mean that the number of papers sold could surely roll far more cigarettes than the amount of loose tobacco that is traded would suggest. That might indicate that rolling papers are being hoarded, but we all know the reason behind this discrepancy. It’s because most Rizlas sold in South Africa are used to roll cannabis joints. Decades of prohibition on this front have been an utter failure.

The reality of this state of affairs has slowly dawned on South African policy makers, whose hand on the issue was forced – as is often the case – by the courts, in this instance the Constitutional Court. It ruled in September 2018 that South Africans had the right to consume cannabis in the privacy of their own homes. This effectively decriminalised the private use of dagga.

The court gave Parliament 24 months to change the legislation to align with the ruling. It has not, but the drive towards legalisation and the unlocking of the economic potential it could bring has plodded along. One result was the unveiling this week of the Cannabis Master Plan at the gabfest that is the National Economic Development and Labour Council, or Nedlac.

To wit, the suggestions and timelines laid out in the Master Plan provide some hope that a sensible cannabis policy can be crafted – one that taps into the sector’s budding economic potential while recognising that adults should be treated as such. That goes against the grain of a government with a deep streak of social conservatism, as the various episodes of prohibition during the pandemic have shown. But it is also a government that is desperate to kick-start economic growth even as many of its own policies have throttled it.

Among other things, the Master Plan calls for the “Amendment of schedules of the Drugs and Drug Trafficking Act”, which means bringing some kind of regulated legality to the proceedings.

The Master Plan makes the obvious point that: “The biggest legal challenge is that there is no law in the RSA that allows for commercialisation of cannabis.” So change the law. The timeline here is 2021/22.

Another “intervention” it lays out is: “Signing of the Cannabis for Private Purposes Bill into law” by 2022/23. That is a bit tardy according to the Constitutional Court’s instructions on the matter but it gets things hopefully rolling.

The “development of a new policy and legislation for commercialisation of cannabis” is another intervention, which the Master Plan says should be in the hands of the control freaks at the Department of Trade and Industry. Expect all kinds of red tape to be wrapped around this one.

“Establishment and implementation of registration system for all companies and organisations involved in breeding, multiplication and sale of cannabis seed” is another intervention, which will be in the hands of the Department of Agriculture.

It also says that certification schemes and import and export protocols need to be developed and that sort of thing. That is quite sensible.

Economic development and job creation are the driving forces behind the Master Plan. “The purpose of the master plan is to provide a broad framework for the development and growth of the South African cannabis industry in order to contribute to economic development, job creation, inclusive participation, rural development and poverty alleviation,” it says.

Its key objectives are as follows:

  • Establish an inclusive, sustainable and globally competitive cannabis industry in South Africa.
  • Increase the volumes and variety of cannabis products destined for both local and export markets.
  • Establish and increase the capacity of South African farmers to produce dagga and hemp.
  • Create opportunities for creation of small and medium-sized enterprises across the cannabis value chain.
  • Increase investments in research and technology development to support the increased production, productivity and competitiveness of the cannabis industry.
  • Establish and increase the manufacturing capacity of the South African cannabis industry.
  • Designate cannabis and hemp products with the designated local content legislative framework.

The legal global market and industry, led by nations such as Canada, are fast growing, and this is what South Africa should aspire to plug into.  

“The global medical cannabis industry is estimated to generate $82.9-billion by 2027. Amidst the Covid-19 pandemic, a new report expects Canada’s recreational marijuana industry to double revenues this year and grow more than 500% by 2025,” the report says. It says the size of the South African cannabis industry is estimated at R28-billion. Interpol rates South Africa as the fourth-largest producer in the world.

That could surely rise if the capital-intensive and precision farming methods employed by South Africa’s commercial grain farmers were used for pot. As things stand, most cannabis producers in South Africa are small-scale, which is why it has huge potential for rural development, though in the former homelands obstacles to land tenure and investment stand in the way.

“The optimum growing conditions exist in what is known as the dagga belt. This is an area that extends from [the] Eastern Cape to KwaZulu-Natal. It is referred to as a traditional crop in this area. It is estimated that more than 900,000 small-scale farmers are growing dagga. The target market for [the] majority of their harvest is Cape Town, Johannesburg, Durban and also other South African towns and cities. Millions of people depend on income from dagga,” the Master Plan says.

It also says the number of dagga users in South Africa is estimated at 3.5 million.

Like the discrepancy between number of Rizlas sold and amount of loose tobacco sold, that also looks a bit suspect considering there are estimated to be 900,000 small-scale dagga farmers. Some of them might grow purely for home consumption, which would make them “subsistence farmers”, as it were.

Still, one reckons that almost all of them must sell some of their surplus, and the ratio of 900,000 to 3.5 million means that each farmer would only provide product on average to around four end users. That does not seem commercially viable and suggests South Africa’s pot market may be far larger than estimated. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for free to Pick n Pay Smart Shoppers at these Pick n Pay stores.

Gallery

Comments - Please in order to comment.

  • Michael Aldridge says:

    It’s rather quaint that the author uses the American colloquialism “pot” to refer to cannabis since no-one in SA uses it as a descriptive term. Still, let’s hope that government can craft a sensible cannabis policy out of the wreckage of the ‘war on drugs’ that has characterised its thinking for so long.

  • Antonette Rowland says:

    At the same time one can’t help wondering whether this will be a repeat of the Oxycontin opioid abuse situation in the US

  • Caroline de Braganza says:

    Dooby dooby do! Loved the puns – pot, up in smoke, get things rolling. Seriously though, I’m worried about the Dept of Trade & Industry’s proposed involvement in policy and legislation. I recall the madness in May last year when the Minister gazetted what clothing retailers could and could not sell – bed linen but no towels, no open-toed shoes, and other ludicrous instructions about short-sleeved tops, etc.

    • Caroline de Braganza says:

      Forgot to mention – I have a pack of Rizla’s but don’t buy loose tobacco. Wonder why?

    • John Bestwick says:

      Totally agree: that rabid Communist Patel is the biggest handicap to industrial growth in SA let alone a cannabis industry. Throw in Cele who is on record as saying if he was on Cons Court he would have voted no. Mishmash morons can’t even run a bath now they will run a cannabis industry neither knows one thing about.😂

  • Louis Potgieter says:

    Here is one for the Department of Health: migrating people from alcohol into dagga will have the benefit of fewer hospitalisations for violence related injuries – with obvious Covid implications.

  • Andy Miles says:

    Cannabis offers South Africa the opportunity to become a leading global player in a high growth industry. Literally black gold. Ideally privatised as much as possible, the fact there is a drug involved State participation is necessary. Given this the Government’s involvement should, in my view, be housed in an initiative similar to InfrastructureSA, effectively reporting to/within the President’s office’, where a group of the best resources from public and private sector have come together to find sensible solutions to meet SA’s infrastructure need. The possibility exists for SA to have a fully integrated cannabis industry from seed development, farming – including intensive hydroponic based, where SA has some leading technical innovation – to the development and manufacture of medical and leisure products (oils, creams, vap, cigarette, edibles). At the farming level there is the opportunity to have hundreds of small farmers producing the raw product produced to agiscience designed standards, specified by manufacturers. There will be need for a wholesale trading function that collects the farm produce and supplies manufacturers. A carefully crafted industry model will maximise innovation at the market end whilst enabling all levels in the value chain. The employment potential will be significant. Correctly addressed the cannabis industry is a bright light on the horizon.

  • Keith Scott says:

    where does one obtain a copy of the Cannabis Master Plan?

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

Get DM168 delivered to your door

Subscribe to DM168 home delivery and get your favourite newspaper delivered every weekend.

Delivery is available in Gauteng, the Western Cape, KwaZulu-Natal, and the Eastern Cape.

Subscribe Now→

Daily Maverick Elections Toolbox

Download the Daily Maverick Elections Toolbox.

+ Your election day questions answered
+ What's different this election
+ Test yourself! Take the quiz