Can SA benefit from the cannabis economy?

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FILE PHOTO: Cannabis plants grow inside the Tilray factory in Cantanhede

The remarks I made recently about the need for our province to benefit from the cannabis economy, did not only bring us out of the bunker but showed us the public interest on this emerging economy. While South Africa has not yet fully legalized commercial production, and trading of cannabis, businesses, producers, processors in countries where this has been legalized continue to reap billions in profit, good job numbers and good tax revenue for those governments.

Many countries have moved from the narrow use of this plant for smocking or recreational use because the plant offers more medicinal and health properties that just a puff. New industries are created by entrepreneurs using cannabis as the main ingredient for products like oil, beer, cosmetic products, drinks, pills and medicine.

A glance at companies pumping money into cannabis production, packaging, processing and trading, some which are listed in various stock exchanges, proves that smart money is on the green herb. Because our province and country is part of the global economy, we cannot continue to hide our heads in the sand on this matter. For our economy to grow, we need to tap into emerging economies like this so that new growth engines are started for an economy that benefits all our people.

We have a choice to either join the emerging cannabis economy or watch on the stands like we did with mineral resources, industrialization where foreign companies mine them in South Africa but process them outside our country benefiting those economies.

Given the abundance of cannabis in our province, the reported potency of its cultivar, the existing skill to plant, produce, harvest and sell the herb, time has come for the Eastern Cape to open its eyes to benefit from the huge potential economic spin offs such as jobs, contracts for farmers and traders. The first point for us is to legalize the production, use and trading of cannabis so that everything we do is within the legal framework regulated by the constitution of our country.

As we are looking at the economic spin offs of the herb, we also need to prioritize the potential medical threats reported to be causing unwanted health problems to those who smoke the herb. It is important for society to embrace the broader use of cannabis beyond recreational smocking that we know it to be used for.

From obtaining legislative approval of the use, production and trading of he herb, we then have to set in motion regulatory mechanisms to prevent medical problems, monopoly, protect cannabis farmers from abuse by profit chasers. We must not shy away from protecting the intellectual property on production of this herb, the skills to produce the herb from economic vultures that are hovering around the province to snatch their pricey lucrative prey. We must be protectionists if we have to be for the sake of protecting our province.

There is a lot of work that has been done by both national and provincial government; some has been prospective exercise while we are also engaging potential investors looking at setting up cannabis production facilities in our province. Automatically, we are in this to create jobs, business contracts for the people of the Eastern Cape province, which is why we are putting them first as we pursue this emerging economy.

It is imperative that work being done by government entities be streamlined into one process so that government support is structured to support villagers growing the herb to benefit from all value chain stages of the cannabis economy. There is no dispute that for this economy to fully benefit the people of the province, we need to have municipalities and broader government institutions functioning as growth engines.

If global companies can invest billions, create jobs, opportunities for herb farmers and continue attracting billions into cannabis investments, why is our government not investing money for research, development and setting up cannabis related industries?

Given our ongoing investment into the agriculture sector, the Eastern Cape has no choice but to be involved in affirming the cannabis economy for our growth.

With the production, distribution, trading experience we have, albeit illegal at the time, we have a base to launch a massive economy that can buoy herb growing rural villages into economic active centers and not the poverty stricken places some are. But growing the herb only is not the only option, we are moving to concretize plans to process, package and export both finished products and the herb to major markets in other provinces and countries.

For this to come to pass, we will assemble a team of diverse experts to advise the provincial government on a seamless and better process to coordinate work done. Part of the responsibilities of this team will be to propose options for the province to benefit from this emerging economy, various growth opportunities within this emerging economy to influence policy, program and resource allocation.

Such a team will include constitutional law experts to advise on speeding up broader herb affirmative legislation, scientists to provide scientific advice for production and use. Because we want to grow the economy, we will include economists to map out economic and market opportunities for trade, business processes and opportunities for producers, traders from our province.

Our State Owned Entities will provide funding and investment support suitable for the cannabis economy so that we industrialize this economy by focusing on its primary, tertiary and agro processing aspects. We will invest on social facilitation; community engagement and medical support program so that we provide broader support to the people of the province, especially those that will continue smocking cannabis.

One of the things we cannot run away from is that the illegal production and trading has given some villagers a source of income, production skills and trading mechanisms that will be critical when the herb is fully legalized. This emerging economy demands configuration of our thinking as government and broader society to have resources, skills and knowledge that will ensure our province benefits from the cannabis economy. This is one match we are not going to watch on the sidelines. We are playing it as main players and we are in it to win.


Lubabalo Mabuyane is the Premier of the Eastern Cape, provincial Chairperson of the ANC.