THE fast-growing cannabis industry in South Africa needs better regulatory clarity with the respective government departments able to talk to each other for it to dominate the potential R56 billion a year potential by 2025.
Leading the pack in South Africa is Highlands Investments, which last week successfully exported an 8.5 ton harvest to Europe through Macedonia, where it is to be used for medicinal purposes.
Managing director Mark Corbett said the co-ordination between the Departments of Trade and Industry (DTI), Agriculture and Fisheries and the South African Health Products Regulatory Authority (Sahpra) was not where it needed to be.
“It makes much more sense to extract the product, but growth will be hampered by the regulatory environment.
“The regulations are opening up very slowly – it is still practically a schedule 6 offence in South Africa to grow or be in possession of large amounts of product, and that hampers growth plans within the region,” Corbett said. Highlands has proved its ability to meet the stringent shipping requirements with an earlier 1.5 ton shipment in April with the 8.5 ton shipment crowning an 11 hectare crop for the season.
The group shipped just over 2 000kg of THC short for tetrahydrocannabinol, the chemical responsible for most of marijuana's psychological effects and 6 500kg cannabidiol (CBD).
“The size of the shipment, which is enough to fill almost four 40-foot containers, required a chartered plane to transport to Macedonia,” Corbett said.
Local extraction of the same harvest would convert the 8.5 tons into 800 litres of residue, a much more compact and portable consignment fetching a higher price on the market.
The European Cannabis Market is forecast to reach R56 billion by 2025 according to the Prohibition Partners’ key insights from the European cannabis report released in April.
“The rapidly growing global medical, wellness and consumer cannabis markets all increasingly require certified, high-quality flower to meet their expanding product portfolios,” Corbett said. He pointed out that the while local pharmaceutical companies were a potential market for product beneficiation, the threat was probably posed by the tobacco industry, which was looking to muscle-in on the potential to add cannabis to its wellness offerings.
The group has 20 hectares of growing capacity out of 200ha available, opening up its prospects for the near future. The current crop has been harvested off 11ha out of the 20ha capacity.
BUSINESS REPORT