WARREN SCHEWITZ: SA has what it takes to create global cannabis brands

It has been just more than three years since the Constitutional Court ruled that South Africans have the right to consume cannabis in the privacy of their own homes, in effect decriminalising the personal use of cannabis. Since then, there have been important milestones that have enabled the emergence of SA’s fledgling cannabis industry.

In 2019, cannabidiol (CBD) was officially rescheduled a level 4 substance, meaning all CBD-containing preparations were rescheduled and fully legal. In June 2021, the much-anticipated cannabis master plan was unveiled, detailing how cannabis can be incorporated into SA’s business sector as part of the government’s drive towards legalisation and commercialisation.

The government has good reason to want to focus on this industry — the department of agriculture, land reform & rural development estimates it could be worth R28bn and could create 10,000-25,000 jobs across the sector.

Yes, there have been frustrations along the way. The enabling legislation has not been forthcoming and the pace of change has been slower than anticipated. However, from the outset we had a clear sense of the opportunity and acted quickly, launching CBD wellness and lifestyle brand Goodleaf within a year of the Constitutional Court ruling. In 2019, we opened SA’s first premium CBD store in the heart of Cape Town.

Two years on and we have three physical stores (two in Cape Town and one in Johannesburg) and our 30-strong premium product line, which includes oils, skincare topicals, sparkling flavoured water, natural vapes and powder sachets, is available online and in major retailers across SA, including Pick n Pay, Spar, Checkers, Wellness Warehouse, Woolworths and Poetry. We also sell powder sachets through Vida e Caffé and have started to market our products in Hong Kong.

From the start, our intention at Goodleaf was to create an SA-grown global cannabis brand, and now we are ready to formally take our brand to the world stage.

Europe is widely considered as the world’s biggest market for cannabis exports, estimated by Prohibition Partners to be worth €403.4m (R7bn) by end-2021. They expect this market to grow at a compound annual rate of 67.4% from 2021 to reach €3.2bn by 2025. The global CBD skincare market is set to surge to $959m by 2024, to represent 10% of the total global skincare market. This had also attracted us to Europe.

The CBD industry is highly regulated, with complex distribution networks. While we are excited about the international expansion opportunity, we will be adopting a targeted approach to these new territories. Our products will soon be available in the UK through our website, Amazon and select stores. We are delighted to have reached this milestone in just three years.

So how did we get to this point and what do we believe is the opportunity for other SA entrepreneurs? There is no doubt the opportunity is there. Demand for cannabis products and other plant-based wellness and beauty alternatives will continue to grow as consumers become increasingly aware of the potential benefits for their health and wellbeing.

The global cannabis market is expected to reach $91.5bn by 2028, registering a compound annual growth rate of 26.3% over the forecast period, according to a 2021 report by Grand View Research. 

Having strong ties to Canada, which provided access to thought leadership and capital, and being a proud African at heart, I knew this was a big opportunity for SA given our abundant sunshine and low cost of production. But there are many countries in the world with sunshine and low production costs, so what else makes us worthy of developing world-class cannabis brands?

We have an incredibly rich heritage of medicinal plants — think rooibos, moringa, marula, baobab and Kalahari melon. The soothing, moisturising and anti-inflammatory capacities of these plants echo the properties of CBD, making the combination a particularly powerful, organic product for skin vitality, which we believe creates a compelling selling proposition. All Goodleaf products, other than CBD oil, are infused with these African botanicals.

We have seen amazing strides in Lesotho and positive support from the government, to see what a progressive regulatory framework combined with pristine growing conditions can do. Lesotho has attracted significant international investment, which has seen the creation of world-class cultivation facilities that meet consumer demands for transparency and traceability.

In 2021, we merged with Highlands Investments, formerly Canopy Growth Africa, which was part of the world’s largest cannabis company. We now have a state-of-the-art ISO 22000-certified cultivation facility, which means we will be able to provide a truly seed-to-sale offering.

When we started Goodleaf we realised we would need significant capital to execute our vision of creating a world-class, vertically integrated brand. Raising this capital allowed us to hire great people. Cape Town is blessed to have some of the best creative talent globally, allowing us to create brands that easily compete with the best.

As the cannabis industry enters this exciting new phase in our growth, let’s not lose the opportunity to create value right here in SA. We must endeavour to not become just another sector where Africa provides the raw product but the real value is created in Europe or North America.

We have what it takes; let’s embrace it and not be afraid to act quickly, decisively and with the confidence that this is SA’s opportunity not to be missed.

• Schewitz is founder and CEO of Cape Town wellness and lifestyle brand Goodleaf.