Progress on developing a South African cannabis industry has been inexplicably slow, which could cause the country to miss out on the potential for job creation and rural upliftment.

The Cannabis Expo held in Cape Town in March 2023, which brought together cannabis farmers, medical and health practitioners, pharmacists, and other potential role players, highlighted both the enthusiasm of participants as well as their frustration with the slow rate of legislative progress on cannabis regulation.

Both the Constitutional Court judgment in Minister of Justice and Constitutional Development and Others v Prince; National Director of Public Prosecutions and Others v Rubin; National Director of Public Prosecutions and Others v Acton and Others [2018] ZACC 30 (the Prince Judgment), as well as promises made by President Cyril Ramaphosa in his 2022 and 2023 State of the Nation (SoNA) addresses, have raised expectations that South Africa would adopt a more liberal approach towards cannabis to realise its potential to create a fully-fledged industry.

It is now approximately two and a half years since the expiry of the 24-month period provided by the Constitutional Court in the Prince Judgment for Parliament to address the constitutional defects in certain provisions of the Drugs and Drug Trafficking Act 140 of 1992 relating to cannabis.

In 2022, during the SoNA, President Ramaphosa said the local cannabis industry had the potential to create 130,000 new jobs, so regulatory processes were being streamlined to ensure it could thrive. In 2023, the President stated that government was moving urgently to “create an enabling regulatory framework for a whole plant, all legitimate purposes approach for complimentary medicines, food, cosmetics, and industrial products, aligned to international conventions and best practices."

But progress appears to have stalled.

During 2021, Webber Wentzel advised a public sector client and prepared a report regarding the Conceptualisation, Motivation and Key Provision for an Enabling Regulatory Framework for Cannabis – read the report here.

In addition, pursuant to the 2022 SONA, Webber Wentzel presented the report for Conceptualisation, Motivation and Key Provision for an Enabling Regulatory Framework for Cannabis to officials/advisors in the Office of the Presidency tasked with reviewing the policy and regulatory framework for industrial hemp and cannabis.

Pressing priorities

A range of speakers at the Cannabis Expo conference said there was still opportunity for South Africa to realise the huge potential of a domestic cannabis industry, but this window may be closing fast.

Aspects that need to be addressed, inter alia, are:

• the failure to redress past injustices;
• the continuous prosecution and imprisonment of individuals for cannabis-related offences;
• the failure of government departments to co-operate and work together to jointly realise the hemp and cannabis sector;
• the continued stigmatisation and negative perception of cannabis as well as the failure to appreciate the benefits of the cannabis plant from a medicinal, pharmaceutical, industrial, agricultural and economic perspective; and
• the commercialisation and integration of indigenous people into the cannabis industry.

The Cannabis Bill

The Cannabis for Private Purposes Bill 2020 has still not been finalised, although it was circulated for additional comments last year.

There are several issues with the draft Bill in its current form. Inter alia, it needs to go beyond addressing the right to privacy and individuals’ right to make, possess, cultivate and use cannabis, to stimulate the commercialisation of both cannabis and hemp for uses other than recreational activity.

Currently, sections 21 and 22C of the Medicines and Related Substances Act 101 of 1965 provide for the authorisation of a medical practitioner to sell cannabis to a patient for medical purposes as well as applications for a licence to cultivate, import and export cannabis.

The Cannabis Bill in its current form also contains various anomalies, for example, you cannot buy or sell cannabis, but you can grow it and consume it on your property. This implies that if you have a surplus you have to give it away. Most cannabis farms are located in poor areas that lack infrastructure, but if the industry was commercialised, it would help to address those issues.

Certain controls are needed, but these are not new. The industry can draw on the controls that are currently in place for the alcohol and tobacco industry, for example, no stores that sell cannabis products should be permitted within a particular distance from schools, a requirement to show a form of identification in order to prove that the buyer is over 18 (or 21), and providing traffic officers and/or law enforcement officials with an instrument to measure THC (the psychoactive compound) levels. South Africa could also look at the experience of other countries such as Thailand, which decided to relax its cannabis laws, and the experience was that the actual harm was considerably less than the perceived harm.

The Cannabis Expo highlighted both vertical and horizontal obstacles. The vertical obstacle is that only a handful of individuals have been granted permission to farm cannabis. These farmers export their crops, resulting in South African consumers paying a high price for products which contain CBD extracted from the same products that were grown locally. In addition, pharmaceutical analysts have warned that not all of the CBD products may contain the level of CBD that is described on the label, which exploits consumers seeking medicinal benefits. Horizontal obstacles are, firstly, the current red tape that farmers are experiencing and secondly, the potential rent-seeking those farmers (of which a majority from the rural and indigenous) areas may experience from government officials and politicians to expedite hemp and cannabis farming permits.

Another obstacle is funding. Financiers have indicated that they cannot invest in an industry that is illegal and unless a formal industry is regulated soon, funders will look elsewhere for opportunities.

Urgent action needed

There is a need for urgent action. Certainly, the hemp and cannabis plants are complex and it can be difficult to control THC and CBD levels, as well as put appropriate safeguards in place. But these are not new issues, and they have been addressed in other jurisdictions.

Developing this industry could give the South African economy a much-needed boost but opportunities like this, to develop a new industry, do not happen often. If South Africa’s politicians hesitate for too long, the country will lose out on a potentially lucrative market.

Written by Daveraj Sauls, Associate at Webber Wenzel