Global interest in the high growth and extremely lucrative cannabis industry has given rise to substantial local and international investments to date, with an estimated R1 billion+ already invested in the South African fledgling industry.

The global market is forecast to reach US$200 billion by 2030 according to Research House Prohibition Partners. This number could more than double as legalisation for recreational use increases across the world. 

This is one plant with extreme multipliers and significant prospects. There are many predicting that cannabis and hemp will be a new asset class in the near future as it has the potential to spawn numerous new categories and compete in numerous existing markets where it offers attractive, environmentally-friendly alternatives to industries such as paper, plastic, bio-fuel, textiles and food additives. 

“Within 10 years cannabis will be a regular part of our daily routines.”
– Zora Milenkovic, Head of Drinks and Tobacco, Euromonitor International 

We’re excited about the fact that the cannabis industry has the potential to be one of the largest industries in the world. 

There are thousands upon thousands of applications for products from the cannabis plant, which are gaining a strong foothold in the market.

Growth is gaining momentum in the short term because of:

• The varied applications for hemp; from building material, paper, fuel and food to textiles, car parts, battery applications and as a plastic replacement, to name a few. It is estimated to have thousands of uses.
• Skyrocketing international demand for natural remedies, plant-based medicine, and a focus on green and environmental awareness.
• The change in the World Health Organisation (WHO) classification of cannabis, which is now viewed to have medical applications. Since the recent WHO decision, December 2020, a highly anticipated and long-delayed decision that is clearing the way for an expansion of cannabis research and medical use.
• The growth in complementary medicine and natural wellness products including CBD, which is a non-psychoactive chemical compound. There was a  massive increase in CBD use by the elderly and other patients during the Covid-19 pandemic.
• Adult recreational use of cannabis will follow in time with the relaxation of legislation and diminishing social stigma. This is happening rapidly on a global scale.  

Why South Africa? And why now?

South Africa has a rich heritage in cannabis cultivation and craftsmanship, and it’s also in dire need of investment to take advantage of rising global demand.

Many SMEs in the cannabis industry lack the overall skills and knowledge to build investable & commercially scalable businesses across the entire cannabis value chain. There’s also limited access to development and commercial capital due to the sunrise nature of the cannabis industry and the slow pace of legislative change.

Yet both our cannabis and hemp industries have the potential to develop into a global powerhouse in the cultivation, processing and manufacturing. Our country is blessed with an idyllic climate, large tracts of available, arable land, a range of indigenous land strains that are in demand across the world, and hundreds if not thousands of years of knowledge cultivating cannabis across the sub-Saharan region. Sub-Saharan Africa produces 30%+ of the world’s cannabis according to Euromonitor and Prohibition Partners research companies. It is further estimated that there are over 900,000 small growers in the region.

The South African government has indicated its recognition of the enormous economic benefits through enabling legislation and supportive incentive programmes to grow the cannabis industry. In the President’s 2022 State of the Nation address, he acknowledged that the industry has the potential to add 130 000 or more new jobs with the right support from his government and key stakeholders. Given that economic growth and job creation are the two most critical imperatives for South Africa, we believe that our cannabis industry is poised for explosive growth.

Many opportunities exist for dollar-based revenue with rand-based costs. This means that if the local cannabis/hemp industry develops sufficient scale and mass to supply international off-take agreements, we will be able to export to markets successfully.

The different kinds of cannabis and hemp use