Pot of Gold Down South – South Africa’s Cannabis Industry on the Rise

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Experts believe that Europe is set to become the largest market for cannabis, and the North American industry is expected to be worth 47.3 billion USD by 2024. Yet, little attention has been paid to South Africa – which can very well be suited to become the next cannabis hub.

South Africa has a fascinating and enriched cultural history of cannabis use, while simultaneously having a disgraceful history of lesser-known prohibitions with roots in colonial racism.

Cannabis entered the region at least 1,000 years ago and has been used in a multitude of ways, ranging from being used for its psychoactive properties, to making fabric and easing childbirth.

 

Historical Dispersal of Cannabis in South Africa


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Africans has been smoking pot for generations. Traces have been found on 14th-century pipes in Ethiopia.

The British army settlers in the 19th century disliked the use of cannabis amongst Indian immigrants in the colony, so it was subsequently banned, stating that it ‘rendered the worker unfit and unable to perform at the expected standard’.

It might seem that cannabis prohibition was built on the very thing we are all trying to fight, racism. The prohibition was manifested by a support of the exploitation of slaves, and the fact that the country is – to this very day – still opposed to the decriminalisation of cannabis is a quandary.

The prohibition had roots in colonial racism and a lack of moral judgement, not scientific evidence.

Recent legislative changes could suggest the country is on track to a more lenient approach. The Drugs & Drug Trafficking act of 1992, which is the current law dealing with illicit drugs in South Africa, was deemed unconstitutional by the Constitutional Court in 2018.

The Court deemed that it would be unconstitutional for the state to criminalise the possession, use or cultivation of cannabis by adults for personal consumption in private.

With this decision, South Africa became the first African country to legalise recreational use.

 

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The ruling was a massive victory for pro-marijuana activists


Although these changes might paint a compassionate and progressive picture, the cannabis landscape in South Africa is still messy. South Africa could be world-leading in this emerging, billion-dollar industry – but rather than being daring, the government is fidgeting with changes to legislation.

However, the monetary incentives presented through full legalisation might be too substantial for the government to turn a blind eye.

The international market for legal marijuana is expected to reach 73.6 billion USD by 2028.

The government is sniffing an opportunity, and it might be a big one. Not only is South Africa starting to explore the intricacies for the commercialisation of the plant, but other countries in the region have also started to relax their laws against cannabis and legalised it for medicinal use.

 

African countries are looking to cannabis as a ticket out of poverty


  • Lesotho was the first African country to legalise cannabis in 2017 for medical purposes and it’s now a leading contributor to the economy.
  • Malawi passed a bill earlier this year decriminalising cannabis for medicinal and industrial purposes, and the country’s cannabis is regarded as the best and finest in the world.
  • Zambia legalised marijuana production for export and medicinal use in December 2019.

Significant steps are also taking place in South Africa, with the cabinet recently approving “The Cannabis for Private Purposes Bill” to be presented to Parliament for processing. Thus, the South African cabinet is advocating for a tolerant and progressive view, driven by the liberalisation of North American markets and the subsequent monetary success the cannabis market has experienced.

 

Total estimated value of cannabis demand by region.

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New Frontier Data

The value of Africa’s legal cannabis market could be worth over 1.7 billion USD by 2023, and the low labour costs, low humidity, a low-polluted environment and a suitable climate makes the region ideal for cultivation.

 

The case for full legalisation in South Africa is substantial and could be the catalyst for other countries in the region to follow suit.

Africa might just become the next major export hub for the blossoming plant – and can potentially rake in millions from foreign investors in the new green rush.

M2BIO Sciences recently purchased Tsime based in Lesotho. The shares are traded under the ticker symbol –  OTCBB: WUHN 📈

 

Erik Faye

Erik is an undergraduate student studying abroad at the University of Strathclyde in Scotland. He has a keen interest in both financial markets and sales, which is why he is majoring in finance & marketing. His curiosity sparked a venture at an early age together with his peers, and his business-centric mind sent him on a path that resulted in the fascination of equity markets and trading. Erik enjoys staying physically fit and challenging himself, manifested by being a member of the university’s rugby club.

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