South African cannabis growers left behind by legalization plans

South African cannabis growers left behind by legalization plans

People sitting with cannabis

People sitting with cannabis

For generations, people in the Eastern Cape of South Africa made a living by growing cannabis. You can expect that as the country moves to legalize harvesting they will be first in line to benefit, but that is not necessarily the case.

Short presentation gray line

Short presentation gray line

The journey from Umthatha to the village of Dikidikini in South Africa’s Eastern Cape province is a picturesque journey filled with endless vistas, sprawling properties and winding roads that cut through rolling green hills that can easily be mistaken for cornfields – but they are anything but that.

“This is cannabis,” my local guide and cannabis activist Greek Zueni tells me. “Everyone here cultivates, that’s how they make a living.”

Cannabis, colloquially known as “umthunzi wez’nkukhu”, or chicken shade, is an intrinsic part of many rural communities in Eastern Cape Pondoland and a vital source of income.

On a farm near the river bank, we found a group of men, women and children tending to a new crop. His hands are stained green from pulling cannabis heads off all day.

The pungent smell of cannabis hangs heavy in the air. They make jokes as they work – harvesting is a group effort. A huge pile of green heads is beside them, drying in the midday sun.

For community member Nontobeko, who is not her real name, growing cannabis is all she knows: “I learned how to grow it at the age of eight,” she says proudly.

“Cannabis is very important to us because it’s our livelihood and source of income. Everything we get, we get through selling cannabis. There are no jobs, our kids are just sitting here with us.”

While cannabis may be a way of life for this community, growing it on this scale is illegal.

There are over 900,000 smallholder farmers in the Eastern Cape and KwaZulu-Natal provinces who have been growing cannabis for years.

These growers have often found themselves on the wrong side of the law, but the government’s tough stance on cannabis looks set to change.

It all started with a landmark court ruling in 2018 that decriminalized the private use, possession and cultivation of cannabis.

Earlier this year, during his State of the Nation address, President Cyril Ramaphosa said South Africa should tap into the multi-billion global hemp and cannabis industry, which he said has the potential to create 130,000 much-needed jobs.

While this may be good news for commercial companies, traditional Eastern Cape producers feel left behind. The cost of getting a license to grow cannabis is too expensive for many.

Greek zueni surrounded by cannabis

Greek Zueni says government needs to do more to support small cannabis farmers

“The government needs to change its approach and create laws that are producer- and citizen-friendly. Right now, people who have licenses [to grow cannabis] are rich people”, says Zueni.

“The government should be helping communities to grow so they can compete with the world market. Here is a commodity growing so easily and organically. We are not jealous, the rich must come in too, but please accommodate the poorest of the poor.” , says Zueni.

turning a blind eye

Last year, the government released a master plan for the industrialization and commercialization of the cannabis plant. He values ​​the local industry, which has largely operated in the shadows, at nearly $2bn (£1.6bn).

It is looking to make the South African cannabis industry globally competitive and produce cannabis products for the international and domestic market.

Key to the launch is the Private Purpose Cannabis Act, due to be signed during the 2022-23 fiscal year, which provides guidelines and rules for consumers and those looking to grow cannabis in their own homes.

It would legalize the cultivation of hemp and cannabis for medicinal purposes, thus opening the industry to serious investment and growth. It is also expected to clarify the legal gray areas and thus provide potential investors with clarity on the future of the South African cannabis market.

While much remains unclear, it appears that the government is committed to opening up the sector, because the economic opportunities are too attractive to ignore. The plans have broad public support, with few dissenting voices.

While the legal framework is still trying to keep up with a rapidly evolving market, many companies are moving forward in the expectation that the law will eventually open up the industry.

As it stands, although private use has been decriminalized, it is still illegal to buy and sell cannabis and various cannabis products.

However, judging by the proliferation of stores selling cannabis products across the country, authorities are already turning a blind eye.

In addition to this legal minefield, it is legal for private companies to grow and export medical cannabis to other countries.

‘European distribution opportunities are great’

One company that is looking to capitalize on medical cannabis is Labat Africa Group. The Johannesburg Stock Exchange-listed company recently acquired Eastern Cape cannabis producer Sweetwater Aquaponics.

Labat director Herschel Maasdorp says the company is experiencing significant growth in both Europe and Africa.

The Sweet Water Aquaponics facility in the Eastern Cape.

The Sweetwater Aquaponics facility has a large cannabis production capacity

It was also listed in Frankfurt because “Germany is Europe’s biggest market for medical cannabis distribution,” he says.

“Distribution opportunities in Europe are very large. Also, beyond borders, only in Africa, there is a proposal that we have consolidated in several different countries, from Kenya, Zambia, Uganda, Rwanda, Tanzania, as well as Zimbabwe.”

Legal cannabis trade on the continent is expected to rise to $7 billion as regulation and market conditions improve, says London-based industry analyst Prohibition Partners, Lesotho $90 million and Zimbabwe $80 million.

In its Global Cannabis Report, Prohibition Partners predicts exponential industry growth worldwide: “Combined global sales of CBD, medical and adult-use cannabis reached $37.4 billion in 2021 and could reach $USD 105 billion by 2026”.

Considering South Africa’s stagnant economic growth and record unemployment, tapping into the cannabis industry can bring big rewards.

For Wayne Gallow of Sweetwater Aquaponics, incorporating traditional producers into the industry is crucial for economic development in the Eastern Cape.

Sweetwater Aquaponics workers selecting cannabis

Sweetwater Aquaponics wants its cannabis production to benefit the local population

“What we wanted to achieve with our license is not just to grow medical cannabis, but to use this license to benefit everyone in the Eastern Cape,” he told the BBC.

He admits that more traditional growers were left behind as cannabis legislation progressed.

“The Pondoland area was synonymous with the supply of cannabis across South Africa,” he says.

However, the changes in the law had a “harmful” effect on Pondoland’s farmers, because they meant that anyone could now grow and consume their own cannabis, so they no longer had a market for a previously very profitable crop.

Even growing cannabis for export for medicines is not viable for small farmers because of the exorbitant costs. It requires a license from the South African Health Products Regulatory Authority (SAHPRA), which costs around $1,465.

In addition to the license fee, to set up a medical cannabis facility you need around $182,000 to $304,000, which is beyond the reach of many traditional growers.

However, there is some promising news for Eastern Cape farmers. The Pondoland or Landrace variety of the plant, which grows so abundantly in the area, has shown some encouraging results in the treatment of breast cancer.

Sweetwater Aquaponics and the Council for Scientific and Industrial Research (CSIR) are currently conducting a study, and scientists are optimistic that the strain will produce good results.

It’s still early days, but if the Pondoland variety proves to be effective, this could be the game-changer that indigenous growers are desperately looking for.

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