South Africa’s budding cannabis industry is waiting for regulations to catch up

 ·20 Oct 2019

Western Cape greenhouse facility, Felbridge says that it is waiting for the South African government to catch up to the growing demand for cannabis cultivation in the country.

Felbridge is one of four companies that have been granted licences from South African Health Products Regulatory Authority (Sahpra) to cultivate the import and export of cannabis.

The group said it will be using its greenhouse facilities in Stellenbosch for the first plantation, with the plan to ultimately use 5,000 square metres to grow the plants, using a phased approach.

The commercial licence allows the company to use 14,000 square metres for the crops, while Felbridge’s greenhouse facility covers 46,000 square metres.

Speaking to Cape Talk on its plans, Felbridge chief executive officer, Leslie Zettler said the aim is to produce around 20 tonnes of dried cannabis – with cultivation happening in a slightly more isolated space, away from the other crops, where it can be more secure.

Zettler highlighted some of the challenges companies in South Africa will face with cultivating cannabis, as they wait for government legislation to catch up.

One problem is around licence restrictions – particularly as the group’s licence is purely for cultivation. The importing of seeds, and manufacturing of products to then sell (in all the various forms) are still not part of the package.

“Our licence is strictly for cultivation, we’re still waiting for companies to be licensed to manufacture – where companies will be able to take our product and turn them into oil, tablets and things like that,” he said.

“I can only grow the product, I can’t sell it to the public, only to another licenced entity – and those licences haven’t been issued yet.”

However, Zettler said that the granting of Felbridge’s licence points to the progress being made towards building a viable cannabis industry in South Africa.

“Until things open up a bit more, we’re just going to be testing our genetics and getting our strain standards and getting everything ready,” he said.

Industry in waiting

South Africa’s budding cannabis industry has made huge strides over the last year since the Constitutional Court upheld South Africans’ right to privacy in September 2018, ruling that individuals should be free to consume cannabis in their private capacity.

The court found that South Africa’s drug laws around cannabis were inconsistent with the Constitution, and gave lawmakers two years to change regulations to be in-line with this ruling. Parliament has until September 2020 to make these changes.

Following the ruling, the government de-scheduled some types of cannabis health products, with conditions, making them easier to get hold of. This sparked a rise in a number of cannabis products showing up at specialist stores across the country – all legal.

It also opened the door for cultivation licences to be handed out by Sahpra.

Pharmaceutical group Afriplex’s partner company, House of Hemp, was granted a cultivation licence by Sahpra in April 2019, setting in motion a process “which will eventually see the standardisation and proper scientific formulation, dosage requirements and combinations of cannabinoids for medical purposes,” it said.

Companies and government departments are also showing support for these industry changes, with the Cape Town government setting aside land for cultivation, with similar moves from the Eastern Cape provincial government.

Industry experts have determined that South Africa could unlock a R107 billion industry by regulating (and taxing) the cultivation, manufacturing and sale of cannabis products.

Independent groups like Felbridge and Afriplex, as well as JSE-listed entities like investment holding company Labat, are all just waiting in the wings for legislation to catch up with demand.

Read: You can now buy cannabis drinks, oils and food in South Africa – this is what is legal

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