Ready to venture into R27 billion cannabis industry
The South African dagga industry could potentially be worth R27 billion within four years as the country is the fourth largest cannabis producer in the world.
This is according to a cannabis market analysis and its economic impact study conducted. This is why Lubabalo Mbuyane, the Eastern Cape Premier, believes that Cannabis farming could literally get the province out of poverty. “Some will push their narrow national interests into this space, but if we can do this right, for once pre-occupy ourselves with development, this could be the solution to unemployment. Gauteng has gold, we have cannabis,” he said during a two-day Cannabis Indaba hosted by the Department of Agriculture in East London last week.
The province has invested R1.1billion into the emergence of this industry for the next three years to add to investments that were made from 1999 to try and get the industry off the ground. Pilot projects exist in areas such as Mbizana and Nyandeni, where growing, cultivating and processing methods were tested with the help of Dr Thandeka Kunene, owner of House of Hemp.
House of Hemp was awarded the very first Cannabis Cultivation Licence from the South African Health Products Regulatory Authority earlier this year, making it one of only four companies to have this licence. Dr Kunene presented a paper titled ‘The background of Cannabis in the Eastern Cape’ which basically concluded that we are ready to produce exportable goods. “Our hemp can make sanitary pads, medicine, food, cosmetics, oils, building material and car parts. As it stands, we might never need anything from outside this province,” she enthused. Kunene is also the secretary general of the Cannabis Development Council of SA which seeks to find more ways in which cannabis can enrich rural communities.
The Indaba, the first of its kind, drew stakeholders from all corners of the province. This included elderly cannabis farmers, the Rastafarian community, the Khoi San tribe, Kings and Chiefs as well as representatives from all government departments.
Despite the enthusiasm showed by all present, there was concern over licencing and its high price. Mlungisi Wondo from the South African Health Products Regulatory Authority (SAHPRA) announced that the application fee to farm cannabis for medicinal purposes amounts to R24 000 and that farmers must have a commitment from a buyer before being awarded a licence. This was met with angry outbursts from the floor with people lamenting a tight red tape into the industry. “We have to inspect the project and ensure that all health standards of cultivation, drying, extracting oil and packaging are met. We charge R700 an hour to do inspections. We feel that all these costs are not as high as people make them out to be, considering the gains expected,” he said.
The cost of setting up a facility and getting a licence is estimated at between R3 million and R5 million, especially if people will use the assistance of consultants to put together the necessary documentation to apply for a licence.
Mabuyane urged traditional leaders to avail land to their community, as the land belongs to the people. “It is simple, in the words of Bob Marley, ‘hemp is the healer of the nation and alcohol is the destroyer of the nation’, so enough talking, let us getting working and ensure that we catch up on the wasted 12 000 years of having the best soil to grow dagga, hemp and cannabis,” he encouraged.
He assured that no other country will come into the province and profit from a product that is historically owned by the people of the Eastern Cape. Nomakhosazana Meth, MEC for Agriculture in the province is convinced that the cannabis industry has guaranteed success as it already exists, albeit without regulations. With its decriminalisation, the province will look into practices of countries such as Canada, which is thriving since it began its licencing and growing. “This is new wealth; we need to cash in on it. The stigma of the plant is slowly diminishing which means it can be mainstreamed into the economy. It is exciting to know that the rural spaces will benefit the most out of this brave move by our Premier,” she concluded.
Just over 2 000 jobs are expected to be created when growers have been fully licenced and work has started. This number is expected to increase every year. “I am hoping that this industry will not be about employment but rather about full ownership of land and the businesses by our own people,” said Meth.
Cannabis is a tall plant with a stiff upright stem, divided serrated leaves, and glandular hairs. It is used to produce hemp fibre and as a drug. Hemp is a cannabis plant grown for fibre, extracted from the stem.