ALL OUT OF JOINT

Medical marijuana has the potential to become SA’S new growth industry — if it could just overcome regulatory obstacles and the government’s lack of enthusiasm

The Western Cape believes the medical cannabis market has significant potential to boost the local economy and is moving fast to position itself as the country’s main hub for this new industry. Following the rapid legalisation of medical cannabis around the world, many of the big Canadian producers are actively pushing their exports and seeking to invest in manufacturing capacity in parts of the world where operating costs are lower.

Canada, which legalised medical cannabis in 2001, is heading for a huge oversupply by 2020, having licensed more than 70 companies to cultivate and sell medical cannabis in recent years.

Wesgro, the Western Cape’s investment facilitation arm, is talking to three big Canadian pharmaceutical companies interested in investing in the nascent industry in the province.

But Colombia, Israel and Switzerland are among the countries also actively positioning themselves as industry hubs,

Wesgro chief research officer Cornelis van der Waal told a packed workshop in Cape

Town last week.

Despite growing competition and the rapidly dropping retail price of cannabis,

Van der Waal thinks there is still significant money to be made.

In 2014, a gram of marijuana flower in Washington state retailed for $23. By 2017, that had fallen to $8/g — which still translates into more than R100,000/kg — and each marijuana plant is capable of producing 750g-1.5kg of product a year.

Van der Waal doesn’t think SA has already lost first-mover advantage, arguing it will ultimately be cost which determines where production is located.

Medical cannabis must be grown in a controlled environment that can only be achieved in greenhouses, but these still rely on the sun. The Western Cape has 15 hours of sunlight a day in summer.

This means SA growers will need to use electricity to generate light for only a further three hours a day (marijuana plants require 18 hours of sunlight a day). SA also experiences particularly high ultraviolet radiation, which means a more concentrated active ingredient at a lower cost of production.

The Western Cape has a supportive government, a strong biotech industry, significant research skills located in three universities, and substantial agricultural infrastructure and export capabilities.

However, there are several constraints that could impede the industry from taking off locally. These include the national government’s lack of enthusiasm, the slow pace of clinical trials and the fact that production is expensive because medical cannabis must be produced under controlled conditions.

SA’S pharmaceutical licensing and registration regime is also stringent and cumbersome, while the laws that govern recreational use of cannabis are in a state of flux.

The Constitutional Court has given the government 24 months to bring sections of the Drugs & Drug Trafficking Act and the Medicines & Related Substances Act in line with its September 2018 ruling, which decriminalised the personal, private use, cultivation or possession of cannabis.

Several multinational pharmaceutical companies

— including

Supreme, Rhizo

Sciences and

Aphria — have already invested in

Lesotho, not only because the quality of the mountain kingdom’s weed is legendary but also because the regulatory environment is more enabling than that of SA.

SA’S pharmaceutical regulatory regime is on par with those of developed countries. Despite this, there has been an explosion of self-styled medical cannabis products coming onto the SA market in the past few months. Most are distributed by small operators via the internet, bypassing the regulatory framework laid down by the SA Health Products Regulatory Authority (SAHPRA) in 2017.

The Afriplex cannabis laboratory in Paarl estimates that 120 new products have been peddled online in the past six months alone. It has tested samples of many of these and found no traces of cannabis components, but high levels of toxic solvents, pesticides and insecticides.

“The danger is not the cannabis but the unsafe levels of contaminants,” says Afriplex MD Danie Nel. “The public is unaware of this and is being exploited by unscrupulous operators. It’s the Wild West out there … a complete free-for-all.”

Afriplex, a R200m pharmaceutical company with 17 years’ experience in developing plant-based medicines, applied to SAHPRA two years ago for a licence to cultivate and manufacture medical cannabis. Since then it has been working with regulators to bring its cannabis processing facilities up to required standards.

Of the 27 licence applications made to SAHPRA so far, industry experts expect Afriplex’s to be the first to be granted.

At the Wesgro workshop, much impatience was expressed from the floor at the slow pace of licensing. This appears to be as much due to incapacity at SAHPRA and fear about security issues — given the potential for cannabis intended for the medical industry to end up on the recreational market — as to confusion among regulators about how the plant works.

The chief gripe is that the authorities want to standardise and legalise one product, medical cannabis, whereas there are many varieties of cannabis, with varied medicinal and nutritional value.

Cannabis is what’s known as a polypharmacy plant. It contains more than 460 compounds, at least 80 of which are cannabinoids and phytocannabinoids that interact with cannabinoid receptors in the human brain. As of 2012, more than 20 cannabinoids were being studied in the US.

This means a wide range of different

The danger is not the cannabis [in new products being peddled online in SA] but the unsafe levels of contaminants Danie Nel