R1 billion boost for South Africa’s ‘cannabis capital’

 ·2 May 2024

The Eastern Cape aims to establish itself as South Africa’s primary cannabis production hub, and a cannabis firm’s R246 million pledge for 2024 and nearly R1 billion planned investment over the next five years is set to give the province a big boost in this goal.

That is if the Premier gets his wish to adopt a “sandbox” approach, where special cannabis zones will be exempt from restrictive commercial national cannabis legislation.

On 29 April 2024, cannabis consulting firm Medigrow, which has thus far established 14 medicinal cannabis farms across the country, signed an investment pledge with the Eastern Cape provincial government.

This pledge will see them included in the government’s Coega Special Economic Zone (SEZ), which is a prime industrial area near Gqeberha in the Eastern Cape designed to attract investment and boost manufacturing.

As per the agreement, a sum of R246 million will be invested by the end of 2024 to finalise an extraction and manufacturing facility for growing indoor cannabis, extracting CBD, producing hemp cigarettes, and packaging the products.

According to the investment agreement, the goal is to cultivate 10,000 hectares of cannabis over the next five years.

A total of around R1 billion will be invested in Coega, which is said to create nearly 30,000 job opportunities. The plan is to assign three workers to each hectare.

Eastern Cape premier Oscar Mabuyane looking at cannabis products from Medigrow managing director Edgar Adams at the investment pledge. Photo: Supplied

Medigrow’s managing director, Edgar Adams, said that small-scale farmers will be supplied with seeds to grow the hemp plant, and the plant will be processed at the SEZ into oil or isolate.

Adams added that the production process would begin once the building becomes compliant and the necessary equipment is installed.

He added that through their facility, they will be able to help address rural development by outsourcing the growing of hemp for oil and isolate that will be manufactured in the facility.

“The investment represents the biggest investment in this subsector in the province and we hope it will act as a catalyst to those investors (locally and internationally) who have identified the province as a strategic location for cannabis investment,” said Eastern Cape premier Oscar Mabuyane.   

Eastern Cape’s goal is to be SA’s cannabis industrial hub

Mabuyane has long been an avid supporter of cannabis production as a stimulant for industrial and economic growth in the province.

As such, he has expressed his discontent with slow progress from national government in creating conducive commercial cannabis legislation given that whilst private consumption among adults is legal, a huge amount of red tape remains around its sale.

“We are concerned by the slow progress of the country’s policymakers in expediting the full implementation… of an enabling cannabis regulation framework that encompasses the commercial exploitation of whole plant, all purposes legislation,” said Mabuyane at the investment launch.

Because of this, Mabuyane wants the Eastern Cape to take the lead in the “sandbox” approach outlined by the Presidency.

According to Cannabiz Africa, the “sandbox” approach describes a scenario where provinces can create special cannabis zones which are exempt from national cannabis rules, and therefore can focus on commercialising the plant within certain guidelines.

“Whilst we await the whole plant, all-purpose legislation, we further implore the National Cannabis Steering Committee chaired by Minister Didiza and Cannabis Advisor at Presidency PMO to expedite the ‘sandbox regulatory interim reform’,” said the Premier.

At the launch, Mabuyane paid tribute to the province’s cannabis growers, who he noted, had suffered hardship in keeping their cannabis culture alive.

“The province’s indigenous cannabis growers and knowledge holders (have) withstood harassment, the destruction and spraying of their cannabis crops with dangerous chemicals, arrests, criminalisation, and even death to protect this wonder plant/crop owned by Africans from being obliterated,” said Mabuyane.

Read: Cannabis use in South Africa: Government clears up confusion over buying, selling and social clubs

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