Par Vumani Mkhize BBC Africa Business, Amths
For generations, people from the Eastern Cape in South Africa have been making a living growing hemp. One might expect them to be the first to benefit from the legalization of this culture, but this is not necessarily the case.
Driving from Amthatha to the village of Dikikini in South Africa’s Eastern Cape Province is a scenic drive filled with endless scenery, scattered farms and winding roads that meander through rolling green hills that one could easily mistake for cornfields – when anything else.
“It’s hashish,” my local guide and Greek cannabis activist Zweni told me. “Everyone here grows it, that’s how they make a living.”
Cannabis, colloquially known as “umthunzi wez’nkukhu” or “chicken shadow”, is an intrinsic part of many rural communities in Eastern Cape Pondoland and a vital source of income.
On a riverside farm, we meet a group of men, women, and children tending to a new harvest. Their hands are stained green from picking cannabis buds all day long.
The pungent smell of cannabis hung in the air. They joke at work – harvesting is a teamwork. Next to them is a huge pile of green shoots drying up in the midday sun.
For Nontobeko, which isn’t her real name, growing cannabis is all she’s ever known: “I learned to grow it when I was eight,” she says proudly.
“Cannabis is very important to us because it is our livelihood and our livelihood. Everything we get we get from selling hemp. There is no work, our children are just sitting here.”
While hemp may be a way of life for this community, its cultivation on this scale is illegal.
More than 900,000 small farmers in the Eastern Cape and KwaZulu-Natal provinces 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 decriminalizing 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 benefit from a multibillion-dollar global medical cannabis industry that, he says, could create 130,000 much-needed jobs.
While this may be good news for businesses, traditional farmers in the Eastern Cape feel left behind. The cost of obtaining a license to grow cannabis is too high for many.
“The government needs to change its approach and come up with favorable laws for farmers and citizens. At the moment, people with licenses [pour cultiver du cannabis] “They’re rich,” Zweni says.
“Government should help communities to farm so they can compete in the global market. This is a product that grows easily and organically. We are not jealous, the rich should come too, but please, help the poorest of the poor,” Zweni says.
Turn your back on reality
Last year, the government unveiled a master plan to manufacture and market the cannabis plant. The domestic industry, which operates largely in the shadows, is estimated at 2 billion dollars (1 trillion 319 billion 175 million 800 thousand CFA francs).
It seeks to make the South African cannabis industry globally competitive and to produce hemp products for the domestic and international market.
The Special Purpose Cannabis Bill, which is expected to be signed in the 2022-23 fiscal year, is a key component of the industry’s development.
It would legalize the cultivation of hemp and hemp for medicinal purposes, and open the sector to serious investment and growth. It is also expected to clarify legal gray areas and give potential investors a clear idea of the future of the cannabis market in South Africa.
Although much remains unclear, the government appears determined to open up the sector, as economic opportunities are too tempting to ignore. The plans have broad popular support, with few dissenting voices.
Although the legal framework is still trying to catch up with the changing market, many companies are pressing ahead with the hope that the law will eventually open up the industry.
Currently, although private use is not criminalized, the purchase and sale of hemp and various derivative products remains illegal.
However, given the prevalence of stores selling cannabis products in the country, the authorities are already turning a blind eye.
To add to this legal minefield, it is legal for private companies to grow and export medical cannabis to other countries.
“The potential for distribution in Europe is great”
The Labat Africa Group is a company seeking to benefit from medicinal cannabis. This company, which is listed on the Johannesburg Stock Exchange, recently acquired the cannabis producer Sweetwater Aquaponics, located in the Eastern Cape Province.
Labat Director Herschel Maasdorp says the company is seeing significant growth in Europe and Africa.
It is also listed in Frankfurt, because “Germany is the largest market in Europe for the distribution of medical cannabis,” he says.
“The possibilities of distribution in Europe are very important. Moreover, beyond the borders, in Africa alone, there is a suggestion that we have consolidated it through a number of different countries, from Kenya to Zambia via Uganda, Rwanda and Tanzania, such as as well as Zimbabwe.”
Legal cannabis trade on the continent is expected to reach $7 billion (4 trillion 607 billion 45 million 300,000 CFA francs) as regulations and market conditions improve, according to the London-based industry analyst.
It says that by 2023 the top African producers will be Nigeria with $3.7 billion, South Africa with $1.7 billion, Morocco with $900 million, Lesotho with $90 million and Zimbabwe with $80 million.
In the Global Cannabis Report, Prohibition Partners predict explosive growth for the global industry: “The combined global sales of CBD, medical cannabis and hemp for adult use exceeded $37.4 billion in 2021 and could reach $105 billion in 2026.”
“What we wanted to achieve with our license is not just to grow medical cannabis, but to use that license to benefit everyone in the Eastern Cape,” he explains to the BBC.
He admits that more traditional growers have been left behind as cannabis legalization has progressed.
“The Bundoland region has been synonymous with the supply of cannabis throughout South Africa,” he says.
However, the changes to the law have had a “harmful” effect on farmers in Bundoland, as it means that anyone can now grow and consume their own cannabis, so they no longer have a market for a previously very profitable crop.
Even growing cannabis for export for medicinal purposes is not an option for smallholders, due to the high costs.
A license must be obtained from the South African Health Products Regulatory Authority (SAHPRA), which costs approximately $1,465 (962,579 CFA).
Aside from licensing fees, setting up a medical facility for cannabis costs between $182,000 and $304,000 (119,549,270 and 199,615,310 CFA), which is out of the reach of many traditional growers.
However, there is promising news for farmers in the Eastern Cape. The Pondoland or Landrace strain, which grows abundantly in the region, has shown 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 about the results of this strain.
It’s still early days, but if the Pondoland breed proves to be a success, it could be a game-changer that local farmers are desperately looking for.