Maverick Citizen

CANNABIS CAPTURED (PART ONE)

Exclusive: A tale of marijuana charlatans, corruption, collusion and exploitation

Exclusive: A tale of marijuana charlatans, corruption, collusion and exploitation
Through manipulating trust and exploiting public ignorance, cannabis charlatans, new and old, are trying to construct corporate empires, some of which appear to be based on corruption, collusion and exploitation. (Photo: iStock)

Through manipulating trust and exploiting public ignorance, cannabis charlatans – new and old – are trying to construct corporate empires, some of which appear to be based on corruption, collusion and exploitation. Without transparency, credibility and integrity from the get-go, the equitable growth and sustainability of the South African cannabis community stands to be sacrificed purely for the sake of profit.

Since talks started around the legalisation and regulation of cannabis in South Africa, Parliament has been slow to act. Instead of listening to the cannabis community, genuine experts and the activists who had long campaigned for decriminalisation, Parliament continues to rely on dubious parties outside cannabis culture to make real decisions for a diverse populace with varied needs and disparate means to meet them. 

In light of this, Maverick Citizen is publishing a series of articles that examine the collusion and corruption already proliferating in the industry, raising questions about some of the charlatans, corporations and regulators who are undermining the potential of the industry to benefit poor people. 

In 2018 the Constitutional Court ruled that the prohibition of cultivating, possessing and consuming cannabis in private in South Africa was unconstitutional. Since then, much has been happening around cannabis. 

Unfortunately, the bulk of this action has been based on a misunderstanding of what both the new and developing laws mean, creating a great deal of uncertainty. 

Despite decriminalising the plant, the persecution and exclusion of cannabis users and proponents continues. By contrast, those with money and influence are establishing themselves firmly in a potentially lucrative market they never advocated, through legitimate means as well as less transparent ones. 

To quote Michelle Dockery from The Gentleman – “There’s fuckery afoot.”

The Constitutional Court ruling on the status of cannabis somewhat vindicates the plant and its proponents. But, despite this, as Paul-Michael Keichel outlines in this article, the contradictions between the Medicines Act (1965) and Drugs Act (1992) remain, and are causing confusion. 

For example, despite the 2018 ConCourt ruling allowing for private cultivation, possession and consumption of cannabis, the Drugs Act still does not allow for commercial practices. 

Licences for the cultivation and manufacture of medicinal and research cannabis granted by the South African Health Products Regulatory Authority (Sahpra), through their interpretation of the Medicines Act, remain in contravention of the Drugs Act. 

For hemp (industrial cannabis), the Department of Agriculture, Land Reform and Rural Development (DALRRD) has issued permits and uses the Plant Improvement Act (1972) to make room for this, but this too still runs afoul of the Drugs Act. 

The result? Some businesses, both large and small – and even regulators – are bending logic to fit their needs, if not greed. 

The wealthier and well-connected – many corporations, conglomerates and even philanthrocapitalists – are lending legitimacy to their practice by using targeted terminology alongside the granted and paid-for approval from entities like Sahpra, DALRRD and individual authorities.  

Investment and venture opportunities of all sorts abound, and those who possess the money, connections and means are able to fully exploit the unregulated market under the guise of “legal cannabis”, a legal construct that does not yet fully exist in South Africa. 

Four years on and the Cannabis Masterplan remains in the works, while Parliament has gotten only as far as a flawed and unrealistic proposed Private Purposes Bill, on which the Portfolio Committee had another impromptu meeting this week, with its findings discussed on 16 November.   

With discord between government departments, other interested parties have entered the ring – reaching their tentacles into sectors that should not concern them. 


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Role of Sahpra

While their acronym indicates regulation of health products, Sahpra – the former Medicines Control Council – has now assumed authority on all things cannabis, extending its reach from cultivation to processing, from testing to distribution, export and import, research and development. 

According to Sahpra, a “responsible pharmacist” also needs to be part of the process: the responsible pharmacist is named in the approved licence registry and is responsible for ensuring compliance with the Pharmacy Act and related legislation. 

Sahpra’s control of licensing – thanks to the glaring contradictions in the law – to cultivate, produce, procure and distribute for their selected medicinal and scientific research markets, comes with exorbitant fees and onerous and often impossible requirements for traditional cultivators from poor communities.

Off-take agreements need to be pre-approved, facilities need to meet Good Manufacturing Practice (GMP) standards (or EU-GMP for international markets), and higher-cost artificially controlled indoor growing is clearly preferred over lower-cost, age-old and proven outdoor growing. 

The extraordinary costs incurred to just get started means that those most passionate about cannabis – indigenous farmers and old-school legacy growers – are simply denied the chance to become legitimate participants in a market they created and supported under prohibition. 

With expensive barriers to entry, it is unrealistic to assume South Africa will reach its cannabis market value prediction of R28-billion by 2025. 

In response to a request for comment, Sahpra says it is merely following national and international law, arguing that: “Anyone can submit a request for review of scheduling status and limits for any scheduled substance, this must be supported by relevant backing information (e.g. evidence-based) and the Minister of Health with Sahpra will review and provide the outcome.” 

Greenhouse filled with young hemp plants ready to be sold to farmers converting from produce crops to cannabis for more profit. (Photo: Supplied)

Flawed demarcation of hemp and cannabis 

Sahpra dictates licensing for the cultivation of medicinal and research cannabis under sections 21 & 22 of the Medicines Act. This is typically high-THC cannabis. THC, which stands for delta-9 tetrahydrocannabinol, is the main component that leads to a “high”. But this is not always the case.  

Where high-CBD (cannabidiol – the component most often linked to healing without a “high”) markets are concerned, DALRRD gets to govern the permits for low-THC commercial cannabis, more widely known as hemp. 

Hemp is the golden child of the market presently – its uses and applications are said to number into the hundreds. If utilised correctly, hemp may help with poverty alleviation and the general economic malaise South Africa currently finds itself in. 

However, the demarcation of what is hemp and what is cannabis is so semantically flawed that Sahpra can easily swoop in and claim a hemp plot as a medicinal cannabis plot, which may lead to crop destruction rather than utilisation. 

Such actions obviously have severe consequences for indigenous and legacy growers. 

Clarity is desperately needed on how hemp can fall under Sahpra’s research or medicinal licensing regime when not cultivated specifically for use in medicinal or research sectors. 

Contrary to popular belief, hemp is simply cannabis with a THC content of 0.2% within the Sahpra definition, although this figure does differ between the various documents currently on the table. 

This arbitrary demarcation of what is hemp and what is cannabis lacks good evidence and so sees leftover biomass from high-THC cultivation excluded from other markets. 

Unsurprisingly, this raises further questions around why cultivation licences are falling to a health products regulator when they are an agrarian raw product. 

There are still more questions to be asked around the perceived legality and resulting persecution of non-licenced/permitted cultivators, producers and even consumers under section 21 regulations.

Sahpra’s interpretation of the legalities in a market built around a decriminalised plant has companies paying attention, using the same dysfunction to establish their presence and line their pockets. 

Sahpra’s barriers to entry may well be perceived by some of these companies as a tool that could be utilised to stifle competition from the existing industry, allowing the corporate capture of cannabis for those with the means to do so. 

Time to ask questions about cannabis charlatans

A “charlatan” is defined by The Cambridge Dictionary as “a person who pretends to have skills or knowledge that they do not have, especially in medicine”.  

When we talk of “cannabis charlatans”, we are referring to those outside the traditional cannabis culture, particularly where cannabis is used by indigenous knowledge systems as a natural medicine with cultural significance. This extends to legacy and future proponents of cannabis.  

Cannabis charlatans are opportunistically trying to enforce practices that may not benefit the industry or the culture as a whole. 

Without questioning the ongoing prohibition of free and fair access to a plant that is ingrained in the cultures of many South Africans, the future for the wider South African cannabis community looks bleak. 

The current, corporately focused model that is establishing itself is geared purely to benefit those with money. It is being enabled by the connections and required means to meet the regulatory conditionalities of Sahpra. This presents obvious opportunities for exploitation and bribery. 

Of course, there are people and entities who feel Sahpra is doing well enough, but these are the more privileged few who have been able to use their positions and knowledge of their local legislators to exploit the market for their own gains.

Those who are ready, even eager, to comply do not necessarily understand the wider implications of supporting a broken system. 

The door is thus wide open for self-styled “cannabis pioneers” (merely charlatans by another name) focused on profit and personal gain, accolades and fame. 

Their language centres around catchphrases like “value-chain”, “synergy”, “market value”, “disruptive”, “poverty alleviation” and “investment potential”, among others. 

In conversations, it is clear they are largely dismissive of the human element, seeing big pay cheques and their own companies benefitting in lieu of a sustainable future for cannabis participants across the board, especially the indigenous farmers and legacy growers who have been cultivating cannabis for decades. 

Through manipulating trust and exploiting general public ignorance, cannabis charlatans – new and old – are constructing corporate empires that are built on exploitation. 

All this is happening with little regard for the ramifications of their actions, particularly now when the developing legal frameworks for cannabis production and consumption is happening at a prohibitively slow pace. 

Without transparency, credibility and integrity from the get-go, the equitable growth and sustainability of the South African cannabis community stands to be thwarted purely for the sake of profit.

While many people have been using cannabis medicinally for years on the illicit market, the developing licit market should be making it easier for folks to access cannabis for whatever purpose, alongside pertinent information about the product. 

Despite good science backing many treatments (or disclaimer-friendly “protocols”), many of the dubious agents proliferating in the market are using a superficial understanding of the current laws to position themselves as pioneers in an industry they have entered purely for personal gain.

Without Sahpra fulfilling its regulatory role transparently and with accountability – understaffing and lack of funding being their chosen scapegoats – the corruption that is already beginning to proliferate throughout the market will continue to spread. 

Corporations, local and international, continue to monopolise the industry through various means of commoditising cannabis products and related services. 

These include assisting with compliance, selective education, dominating every facet (cultivation through to consumption) and conducting pseudo-scientific research. All the while, these actions are being endorsed by Sahpra along the way. 

Greed has many faces, and desperation breeds utility for those who have the means to control the market. 

Steps to allow fair and equitable participation in the market

What all this illustrates is that an evidence-based regulatory framework is urgently required, and a set of different practical requirements needs to be put in place to allow for fair and equitable participation.  

This may also mean that the local market needs to be prioritised over the international market as we develop this industry sustainably for equitable participation.

Where Sahpra sees fit to exploit anyone hoping to make a (more) legitimate income from cannabis, corporations are willing to bend to their will – and to bend others along with them. This holds true not only for the riskier players, but also for those companies focused on the processes involved in securing licences and adhering to malfunctioning, non-state compliance strictures. 

Indeed, the woes resulting from impending corporate capture of cannabis through charlatans, are by no means unique. 

They are simply emblematic of the rot, corruption and collusion that run through every facet of our rainbow nation. 

The game is rigged, folks, and it is time we learn the how, why and by who – as well as how to change the rules to positively shape the future of cannabis in South Africa. DM/MC

Nichol Budds is a pseudonym. The author is a qualified researcher whose identity and qualifications have been verified by Maverick Citizen. The author has requested anonymity as they continue their investigation into the subject matter of this series. They fear that disclosing their identity now would be a threat to their safety and would mean they no longer have access to spaces and sources of information to observe and investigate this unfolding story.

Maverick Citizen invited Sahpra to respond to the criticism in this article. Yuven Gounden, Sahpra’s Manager: Communication and PR, responded as follows:

“The international control framework for the medical and scientific use of cannabis and cannabis-related substances is established by the Single Convention on Narcotic Drugs, 1961, as amended by the 1972 Protocol, and the Convention on Psychotropic Substances, 1971, as well as relevant resolutions of United Nations Economic and Social Council and the Commission on Narcotic Drugs. 

The Conventions are overseen by the International Narcotics Control Board (INCB) and provisions are enacted within domestic legislation and regulations permitting licenced activities and use of narcotic drugs 1 and psychotropic substances 2 for medical and scientific use. 

The application of the provisions of international drug control treaties allows for appropriate monitoring by the INCB and Competent National Authorities who, in South Africa, is Sahpra. This is to ensure that accurate data on licenced activities (e.g. cultivation) and the production of controlled substances accurately reflect the national estimates and Assessments are reported to the INCB by Sahpra/Competent National Authorities. 

The medical and scientific control framework control and reporting requirements among member states includes licensure of cultivation, manufacture, distribution, monitoring process in preventing diversion to illicit market, reporting, and ensuring compliance with the international conventions by member states. 

Sahpra is tasked with regulating (monitoring, evaluating, investigating, inspecting and registering) all health products. Sahpra’s mandate is outlined in the Medicines and Related Substances Act (Act No 101 of 1965 as amended) and Sahpra reports to INCB on all controlled substances. 

Therefore, Sahpra through its schedules, in line with the above-mentioned, regulates cannabinoids such Tetrahydrocannabinol (THC) and Cannabidiol (CBD) for medical and scientific purposes. These control measures are aligned to international requirements and reporting requirements as committed to by the Republic. 

The manufacturing (includes cultivation) of scheduled substances requires a Section 22C(1)(b) licence, supported by Regulation 23 of the Medicines Act and the licence holder must comply with good practices as determined by the Authority. 

In conclusion, anyone can submit a request for review of scheduling status and limits for any scheduled substance; this must be supported by relevant backing information (e.g. evidence-based) and the Minister of Health with Sahpra will review and provide the outcome. 

Gallery

Comments - Please in order to comment.

  • Keith Scott says:

    The simple solution to developing fair, workable cannabis regulation is to use the tried and true laws and bylaws controlling alcohol use and production as a template for new cannabis laws. These laws allow any adult to produce alcoholic beverages for private use without having to have a permit, and anyone to produce and sell alcohol products as long as they have the relevant licences. These licences are NOT only given to big business – witness the plethora of artisinal beers, gins etc on the market. And SAHPRA should concern itself only with those cannabis based products that purport to have medicinal value. Although the above suggestions have been put forward many times to the Cannabis For Private Purposes Bill Portfolio Committee by various interested parties, little progress has been made in what should be a relatively simple piece of legislation.

  • Johan Buys says:

    There are many scams in this game. start at the official side, SAHPRA wants to extend its powers to growing facilities. There are a host of grown products that after processing end up in scheduled drugs. Morphine is a basic and obvious example. Does one need SAHPRA approval to plant poppies? Over-reach by them and they are saddling themselves with areas they have no skill or experience in. Then there are the project peddlers. They claim fantasy land business models and offtake agreements. When you dig into the market, you find that there is MASSIVE over-supply of recreational products. To the extent that North Anerican growers last year destroyed half the crop. There is a potential market in guaranteed pharma grade specific strains grown purely organic with no herbicide or pesticide, but it is frighteningly expensive as it will (1) certainly be indoor vertical stacked growing (2) involves $$$$$ capex just for lights and $$$$ energy bills. Figure 350kW per 2000sqm grow space. You are dead unless you have a take-or-pay contract with an entity that you can sue and that can pay when they don’t take your product. Personally, I am anti recreational dagga. For some reason, it is the beginning of a sad end for some % of people, especially young people that might also be bipolar. The term “dopehead” has its origins in what happens to people that use too much dagga.

  • Donald Moore says:

    Recreational drugs, dagga, alcohol, crime, corruption, misleading advertising, gangsterism, etc. they all belong together. Regulation of alcohol has not made it less of a problem. It is a myth that the laws and regulations surrounding the production, sale and consumption of alcohol have been effective in limiting its harmful effects. It still causes motor accidents, minor and major criminal activity, domestic violence. Dagga will always be a cause of social problems, like alcohol is, no matter what legislation is passed. STOP KIDDING YOURSELVES.

    • John Cartwright says:

      But would you then criminalise the production, sale and use of alcohol? It’s been tried. It created ciminality on a large scale with even less control over its individual and collective effects. So decriminalising and legalising won’t lead to paradise, but it will reduce the shocking harms of contining crimialisation.

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