Page 22 - LandscapeIssue-143

FEATURE

Photo by Quade du Toit on Unsplash

KEEPING THE CANNABIS

INDUSTRY ON COURSE

By Johann Slabber, CEO of Nexus Pharma (Pty) Ltd

The cannabis industry in South Africa is experiencing rapid expansion, offering growth
and lucrative investment prospects. With over 50 countries legalising medicinal
cannabis and six permitting recreational use, the global market has surged to an
estimated €231 billion, driven by approximately 263 million annual consumers.

outh Africa’s cannabis industry has and ensuring equitable market access. As issues could jeopardise relationships with
the potential to generate up to 25 000 South Africa develops regulations for this international buyers, partners and investors
Sjobs and could be valued at around segment, it is vital to establish measures who rely on South Africa’s cannabis sector
R28 billion, with a projected growth rate that prevent indiscriminate use, while also being viewed as a legitimate and well-
of 28.4 %. The country is well-positioned to supporting smaller farmers and businesses. regulated market.
lead in this flourishing industry, benefitting This balanced approach will help address
from a strong initial advantage, a solid immediate local market needs and support Collaborative way forward
international reputation for product quality long-term industry growth. Establishment of a compliance and
and top rankings in Africa for technical marketing initiative
expertise and cost efficiency. Its favourable Export and market access To enhance compliance and support
climate, evolving regulatory environment, Since 2017, the South African government, market access for local and global markets,
arable land and established agricultural alongside various stakeholders, local and it is proposed that key stakeholders from
experience further enhance its competitive global investors, has emphasised the need the private sector collaborate with the
edge. Nevertheless, significant efforts are to advance the cannabis industry. Licenses Department of Agriculture to establish a
required to fully realise this potential. have been issued in response to the sector’s National Cannabis Growers Compliance and
significant potential for job creation, Marketing Initiative (The Initiative). The goal
Challenges investment and economic growth. of this is to effectively address the complex
Ensuring regulatory compliance However, the industry now faces more challenges facing the industry.
Adherence to the regulatory framework intricate challenges. To date, the South While adherence to SAHPRA’s
and legislation signed into law in May African Health Products Regulatory regulations is essential, The Initiative
2024 is essential for the advancement of Authority (SAHPRA) has issued over 110 will focus on ensuring compliance with
South Africa’s emerging cannabis industry. Good Agricultural and Collection Practices necessary standards for viable businesses
The numerous unregulated cultivators (GACP) licenses to growers, with many and exportable products. A further primary
and manufacturers pose a risk, potentially more applications under review. Yet fewer objective will be to facilitate market access
undermining the development of a multi- than 20 licensed operators are actively and manage the challenges posed by an
billion rand market. exporting bulk cannabis flower and oversupply of products. Specifically, The
The presence of these unlicensed related products to commercial markets. Initiative will provide targeted support to
operators not only threatens industry This raises a critical issue: what happens to licensed producers, helping them export
integrity but also creates opportunities for the surplus product? and market their products successfully. An
regulatory evasion. To safeguard the sector Many growers, having invested immediate goal is to develop a sustainable,
and ensure its growth, it is crucial for all substantial sums in their operations long-term solution that enables growers,
stakeholders to work collaboratively to and cultivation facilities, are eager to particularly small black farmers, to market
uphold and enforce compliance standards. recoup their investments. This urgency their products efficiently after each
While South Africa is not transitioning to has unfortunately led to some improper harvest.
a fully recreational cannabis market, there is practices, including illegal sales. As
a growing focus on recreational use within businesses struggle to remain viable, they Inclusive economic growth
a specific segment of the industry. This face an urgent need for clear guidance and The Initiative aims to play a significant role
approach is similar to that in Germany, where strategic direction. Without prompt and in driving inclusive economic growth in
well-designed regulations for recreational effective intervention, the industry risks South Africa by:
use have been crucial in preventing misuse continued delays and disruptions. These • facilitating strategic industry partner-

20 Landscape SA • Issue 143 2024 Check us out www.salandscape.co.za