Agbiz calls for more research into growing and trading in cannabis

An organisation that represents commercial farmers and agribusiness enterprises nationally has called for more research into the growing and trading of cannabis in SA and the rest of the world.

In a market update on Monday, the Agricultural Business Chamber (Agbiz) said such research would assist policymakers in evaluating the benefits, and possible unintended consequences, of the plant. Agbiz noted a Constitutional Court ruling that decriminalised the private use of cannabis in SA. It said, however, the conditions and boundaries still need to be considered and legislated.

Wandile Sihlobo, head economist at Agbiz, said private use might not be where the commercial value lies.

“The focus should rather be on exploring the possible benefits for the country through the controlled, international trade in cannabis and its products, and also medicinal use purposes in the domestic market,” said Sihlobo.

The cannabis industry is growing fast throughout the world as more countries move to legalise the plant. A report by Europe-based market intelligence and strategic consultancy firm Prohibition Partners, highlighted that Africa’s legal cannabis industry could generate more than $ 7.1bn a year by 2023 if more of the continent’s major markets open up and follow the trend of legalisation seen in the US, Canada and Europe.

According to a UN survey, more than 38,000 tons of cannabis is produced in Africa each year. However, African governments have not yet followed the trend of legalisation seen in Europe and the Americas. Only a handful of African countries have taken steps toward legalising cannabis use, including SA, Lesotho and Zimbabwe, which recently approved its use for medical purposes. Recreational use in Zimbabwe is still illegal.

Sihlobo said SA already trades agricultural commodities with countries such as the US, Canada, and China where some regions in those nations have decriminalised cannabis.

“Hence, their increasing desire for cannabis and its product is interesting as it would offer extra value if SA was to follow the route of producing the crop for international trade, and medicinal use within a clearly regulated environment,” said Sihlobo.

He said the state of California in the US had a cannabis industry valued at about $3bn in 2017.  In the same year, Canada spent over $5bn on cannabis for medical and non-medical purposes. In China — a grower of nearly half the world’s legal hemp — the sales of textile fibre made from the plant’s stalk, totalled $1.2bn, said Sihlobo.

“Overall, we are not arguing for any particular policy position regarding cannabis, but rather for increased research which would assist policymakers in evaluating the benefits, and possible unintended consequences of growing and trading cannabis. This should take stock of the changing perceptions surrounding this crop globally, and its growing demand and commercial value.”

Sihlobo said in the coming years, depending on whether SA’s policy position on cannabis follows the global development, the ideal provinces for growing the crop would be the Eastern Cape, KwaZulu-Natal and Limpopo due to favourable climatic conditions.

phakathib@businesslive.co.za