The Unfulfilled Potential of Cannabis in Southern Africa: Why Inclusion Matters

As the global legal cannabis market explodes, worth an estimated US$69.78 billion in 2023 and projected to reach US$216.76 billion by 2033, Southern Africa's indigenous cannabis farmers are being left behind. For decades, rural communities in South Africa and Zimbabwe have cultivated cannabis for medicinal and economic purposes, only to be excluded from the new industry. Despite decriminalization in South Africa in 2018 and regulation in Zimbabwe, high barriers to entry and strict regulations have prevented small-scale farmers from participating in the legal market.

Key Takeaways:

• The global legal cannabis market is projected to reach US$216.76 billion by 2033, but Southern Africa's indigenous farmers may miss out on the benefits.
• In South Africa, medicinal cannabis production is an exclusive business, with only well-off businesses able to participate, excluding traditional farmers who grew and sold cannabis illicitly.
• In Zimbabwe, small-scale farmers are prevented from entering the legal market due to high costs of greenhouses and licences, while wealthy investors and corporations dominate the industry.
• The cost of setting up a medicinal cannabis business in South Africa ranges from R3 million to R5 million (US$173,000 to US$289,000), sidelining the communities that kept the industry going.
• The main beneficiaries of cannabis law reform in both countries have been established local businesspeople and foreign investors, rather than small-scale farmers.
• Corporate capture of the cannabis industry is looming, with well-capitalized companies able to afford regulatory standards and sell cannabis on the export market.
• Excluding smallholder farmers perpetuates inequality and undermines the sustainability of reform, as illicit markets continue to thrive if ordinary cultivators see no benefit in moving to the legal sector.
• More inclusive models, such as tiered licensing systems and cannabis producer co-operatives, are necessary to permit small-scale farmers' participation and balance commercial opportunities with their rights and livelihoods.

Statistics:

• The global legal cannabis market is worth an estimated US$69.78 billion in 2023.
• The market is projected to reach US$216.76 billion by 2033.
• The cost of a five-year medicinal cannabis licence in Zimbabwe is US$50,000.
• Annual inspection fees and licence renewal fees for medicinal cannabis farmers in Zimbabwe are substantial.
• A greenhouse installer interviewed reported that the cost of a cheaper version of a greenhouse in Zimbabwe is US$220,000 for a five-hectare plot.

Sources:

• "Cannabis is booming as an ingredient in everything from supplementary oils, inflammation-reducing skin creams, lip balms to health drinks and gummy sweets that promise to reduce anxiety and pain and promote relaxation."
• "The global legal cannabis market is today worth about US$69,78 billion, and this will skyrocket to US$216,76 billion by 2033."
• "In South Africa, cannabis was prohibited under different laws since 1928."
• "In Zimbabwe, the Dangerous Drugs Act criminalised cannabis in 1955, and this continued after independence."
• "We are social scientists who research cannabis and development in Africa."
• "Our research found that cannabis reform has continued old patterns of unfairness."
• "Trade in cannabis outside the tightly regulated medical and hemp sectors is mainly prohibited."
• "To set up a medicinal cannabis business in South Africa needs a licence from the health products regulatory authority."
• "The cannabis farm has to meet high-quality standards and comply with strict manufacturing and agricultural practices."
• "Medicinal cannabis businesses estimate that R3 million to R5 million (US$173 000 to US$289 000) is needed to start a farm."
• "Zimbabwe's reform took a different route. The Government legalised cannabis cultivation in 2018, but only for medicinal and industrial purposes."
• "Recreational use remains illegal."
• "In practice, though, only wealthy investors can afford to set up cannabis export businesses."
• "A five-year medicinal cannabis licence costs US$50 000."
• "Cannabis farmers must pay substantial annual inspection fees and licence renewal fees."
• "Our research also found that the cost of greenhouses prevents small-scale farmers from starting cannabis businesses."
• "Medicinal cannabis farmers are required to use greenhouses to control temperatures, humidity, pests and contamination."
• "A greenhouse installer we interviewed said one of their cheaper versions cost US$220 000 for a five-hectare plot."
• "If the cannabis industry is taken over by corporations, profits will be concentrated in a narrow elite rather than growers on the ground."
• "Both countries are struggling with the contradiction between reforming cannabis laws and international drug controls which still classify cannabis as a prohibited substance."
• "This complicates efforts to develop export markets and creates uncertainty for investors."
• "Excluding smallholder farmers who have cultivated cannabis for decades perpetuates inequality."
• "It also undermines the sustainability of reform, because illicit markets will continue to thrive if ordinary cultivators see no benefit in moving to the legal sector."
• "More inclusive models are possible."