The cannabis industry in South Africa is often touted as a potential saviour of the country's ailing economy, and one look at the figures explain why. There is R107 billion of value in the local industry waiting to be unlocked. In 2019, Prohibition Partners released its African Cannabis Report, which forecast the value of the South African medicinal cannabis market and that of the recreational cannabis market at R11 billion and R20 billion by 2023, respectively. The projected growth rate is 28,4%.
South Africa has the capacity to become a leader in this dynamic space. The country enjoys a strong head start on others, a good reputation internationally for quality of product, and is rated number one in Africa for technical competence and cost of production. In addition, its favourable climate, loosening laws, arable land and pre-existing experience in farming and hemp production make it a formidable force.
FAST FACTS
South Africa has been slow in enabling the right policy framework to benefit cannabis growers.
Labat Africa Limited became the first cannabis company to list Johannesburg Stock Exchange.
The Cannabis for Private Purposes Bill is awaiting ratification in Parliament.
Despite all this, the industry remains in the very early stages of ironing out the various legal, political, economic, regulatory and social obstacles standing in the way of its potential.
Some advanced economies and sophisticated markets have not been shy to put their faith in South Africa's medicinal cannabis industry as cannabis use grows across the globe.
Germany, for example, has recently become the most developed market to allow the use of cannabis to treat medical conditions, with recreational cannabis (adult use) to be ratified within the next 12 months.
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