Government to open up and regulate use of hemp and cannabis products

President Cyril Ramaphosa  announced on Thursday that the government will  in 2020 open up and regulate the commercial use of hemp products, providing opportunities for small-scale farmers; and formulate policy on the use of cannabis products for medicinal purposes.

Ramaphosa said in his state of the nation address that this will put the industry in line with global trends.

“The regulatory steps will soon be announced by the relevant ministers,” he said.

Hemp, or industrial hemp, is a variant of the cannabis plant species that is grown specifically for industrial uses.

At present, it is illegal to cultivate hemp in SA. Hemp production is authorised for research purposes under special conditions granted by the director-general of the national department of health.

According to the Agricultural Research Council, hemp can be used to make more than 25,000 consumer products, from hemp clothing and accessories to housewares and cosmetics.

The global industrial hemp market size is expected to reach $10.6bn by 2025, according to US-based market research and consulting company Grand View Research.

Former Trade & industry minister Rob Davies previously said the government recognised the potential of commercial value chains of cannabis and related products. It will thus consider the obstacles and opportunities for SA to become an active and innovative player in the growing hemp market.

A report released in 2019 showed 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 the report by Europe-based market intelligence and strategic consultancy firm, Prohibition Partners, while cannabis remains illegal in most African countries, many nations are keen to embrace cultivation as a way to boost their economies.

“Cannabis is already widely grown and consumed across the continent with production currently standing at around 38,000 tonnes and consumption rates at 13.2%,” according to the report.

According to a UN survey, more than 38,000 tonnes 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 towards legalising cannabis use, including SA, Lesotho and Zimbabwe, which recently approved its use for medical purposes, but recreational use is still illegal.

The report by Prohibition Partners says that while any path towards a legalised and regulated cannabis industry presents a number of significant challenges due to opaque laws and inconsistent enforcement, Africa’s climate, affordable land and low-cost labour offer enormous opportunities in a market which could exceed $7.1bn by 2023.

phakathib@businesslive.co.za