R36 billion goldmine for South Africa hidden in plain sight
The illicit cannabis industry in South Africa is valued at an estimated R36 billion, and the government is slowly creeping towards turning this into a legitimate, regulated—and importantly, taxable—market.
The Department of Trade, Industry and Competition plans to introduce a Cannabis Bill to Parliament by mid-2027, attempting to transition the cannabis industry from an informal market to a structured economic sector.
Government committees are coordinating with health and agricultural experts to balance the commercial potential of cannabis with public safety measures, as part of the National Cannabis Master Plan.
Additionally, researchers highlighted the emerging market for cannabis-infused food products such as sweets, beverages, baked goods and capsules that contain cannabis, while highlighting the potential health risks for vulnerable groups if the products are not properly regulated.
While private use of cannabis is already permitted for adults, the objective of the roadmap is to establish a formal legislation that can replace the estimated R36 billion informal market with a legal, licensed system.
“We encourage stakeholder engagement between all the relevant departments, academia and the private sector to ensure proper regulation of the sector,” said Chairperson Mzwandile Masina.
The committee said it would continue to monitor progress on drafting the Cannabis Bill and on the broader implementation of the National Cannabis Master Plan.
The Cannabis Masterplan, which had been on the cards since the legalisation of cannabis for private use in 2018, was transferred to the Department of Trade, Industry, and Competition (DTIC) in 2024.
In 2025, the DTIC stated that the plants needed to be removed from the Drugs and Drug Trafficking Act first, to facilitate the cannabis industry, which was awaiting finalisation by the Department of Justice.
The Minister of Trade, Industry, and Competition previously committed to achieving a 10% annual growth target for the cannabis and hemp sector, starting from a baseline of R14 billion.
The National Cannabis Masterplan
The National Cannabis Masterplan was developed by the former Department of Agriculture, Land Reform and Rural Development to provide a broad framework for the development and growth of the South African cannabis industry.
The plan aims to enhance economic development, job creation, inclusive participation, rural development and poverty alleviation.
Above these are the specific targets, which include increasing the volume and diversity of locally produced cannabis products for both domestic and export markets.
The targets also include enhancing the capacity of South African farmers and SMEs, replacing imported products with local alternatives, and boosting investments in research and manufacturing.
Currently, an Inter-Ministerial Committee (IMC), led by the Minister of Trade, Industry and Competition, supervises the execution of the Masterplan, which has seen the establishment of four working groups—each dealing with one (or more) pillar of the plan.
A recent DTIC report noted that the South African cannabis market was projected to grow to R5.5 billion by 2025, while the global hemp market was expected to triple to $36.7 billion by 2032.
The report indicated that the largest demand segment is the CBD flower, followed by seeds and fibres for textiles and building materials.
The National Cannabis Masterplan uses a nine-pillar framework to guide the establishment, growth, and development of the South African cannabis and hemp industry.
The nine pillars are:
- Effective Regulatory Systems
- Sustainable Seed Supply Systems
- Research and Technology Development
- Sustainable Producer Support Systems
- Market Development
- Supplier Development Systems
- Manufacturing and Product Development
- Education and Training
- Communication and Awareness
These pillars serve as strategic focus areas to ensure the industry holistically promotes economic growth, job creation, and poverty alleviation across the entire value chain.
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