Ramaphosa’s big cannabis plans could go up in smoke
There needs to be urgent action to develop the cannabis industry in South Africa to boost business opportunities and take advantage of an internationally growing sector, says Daveraj Sauls, a legal expert from Webber Wentzel.
A recent cannabis expo held in Cape Town this month highlighted businesses’ enthusiasm to participate in the industry; however, concern and frustration were directed towards the slow legislative progress regarding cannabis regulation.
According to Webber Wentzel, unlike other jurisdictions, politicians have hesitated to develop regulations to take advantage of the potentially lucrative market.
A recent constitutional judgment opening up cannabis use and cultivation, as well as promises made by President Cyril Ramaphosa in both his 2022 and 2023 State of the Nation Address (SONA), have raised expectations that South Africa would adopt a more liberal approach towards cannabis becoming a fully-fledged industry, said the firm.
Progress has, however, been slow, and it has been two and a half years since the 24-month period for Parliament to address constitutional defects in legislation has expired.
Ramaphosa, in his latest SONA, said that the cannabis industry could potentially create 130,000 new jobs.
He added that the government was moving urgently to establish a framework for legitimate cannabis integration in medicines, food, cosmetics and industrial products. But little has yet to happen.
According to Webber Wentzel, various figureheads who spoke at the conference said that there was still an opportunity for the country to realise its potential relating to the domestic cannabis industry if it addressed the following:
- Failure to redress past injustices;
- The continuous prosecution and imprisonment of individuals for cannabis-related offences;
- Failure of government departments to cooperate 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
- 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.
Webber Wentzel said that the industry could draw on controls that are currently in place for the tobacco and alcohol industry for inspiration on how cannabis could be treated as an 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 to prove that the buyer is over 18 (or 21), and providing traffic officers or law enforcement officials with an instrument to measure THC (the psychoactive compound) levels.”
The country could further draw on what was seen in Thailand, which recently relaxed its cannabis laws and saw positive results.
Another issue hampering the cannabis industry from becoming full-fledged is that only a handful of individuals have been granted legal permission to farm cannabis.
“These farmers export their crops, resulting in South African consumers paying a high price for products containing CBD extracted from the same products grown locally”.
CBD is the non-psychoactive compound found in cannabis but is used for pain relief, anxiety, depression relief and sleep.
“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,” said Webber Wentzel.
On top of this, farmers face an onslaught of red tape and rent-seeking behaviour from government officials and politicians.
Webber Wentzel said that financiers are also needed to invest in the industry; however, they cannot if it is still illegal.
“Unless a formal industry is regulated soon, funders will look elsewhere for opportunities,” said the law firm.
The bill
The current Cannabis for Private Purposes Bill has faced backlash from industry players for being unclear and home to several issues.
Webber Wentzel said that the bill is insufficient in its current form – 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 cannabis and hemp for uses other than a recreational activity.
As it stands, the bill has, since September last year, been making its way slowly through Parliament.
The bill aims to tackle ambiguous areas relating to the use, cultivation and sale of cannabis. A new provision defines “private space” as where cannabis can be used or grown; however, it still remains unclear.
Ultimately, the bill allows for growing cannabis and consuming it on your own property; however, you are not allowed to buy or sell cannabis.
“This implies that you must give it away if you have a surplus. Most cannabis farms are located in poor areas that lack infrastructure, but if the industry were commercialised, it would help to address those issues,” said Webber Wentzel.
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