Legalising cannabis economy takes a Covid-19 hit

Delays in passing new laws governing the possession and use of cannabis, caused by the Covid-19 lockdown, have placed on hold the development of a different kind of green economy mentioned by President Cyril Rampahosa in his February State of the Nation address.

The delays in promulgating the Regulation of Cannabis Bill and additional changes to the Medicine and Related Substances Control Act mean the state will not meet the September 2020 deadline set by the Constitutional Court in the 2018 judgment declaring the prohibition on cannabis cultivation, possession and use unconstitutional.

This week the department of justice and constitutional development’s spokesperson, Chrispin Phiri, confirmed the delay in passing the Bill, a draft of which was circulated to state agencies and government departments for comment and input during January.

In February, the

Mail & Guardian reported that a leaked draft of the Bill had presented different options for the legalisation of cannabis, one based on a prohibitive model and the other on a commercial model, with government departments being asked to consider the effect of both before making their final submissions.

But the draft itself only went as far as laying down limits for personal use and gave no framework for a commercial cannabis trade.

Finance Minister Tito Mboweni has subsequently been publicly supportive of the commercial model, which provincial premiers in Kwazulunatal and the Eastern Cape have backed. It would incorporate existing illegal commercial growers into a formalised cannabis economy.

“This year we will open up and regulate the commercial use of hemp products, providing opportunities for small-scale farmers; and formulate policy on the use of cannabis products for medicinal purposes, to build this industry in line with global trends,” the president said in his address.

Phiri said the delays were a result of the Covid-19 lockdown regulations affecting the sitting of parliamentary committees and the ability to hold a public participation process.

Last year a cannabis consultancy, Prohibition Partners, estimated the value of the South African domestic cannabis market — excluding non-psychoactive cannabidiol products that are available legally — at about R27-billion annually by 2023. The delay in a move towards a legal framework for the cannabis economy has serious implications for the state, particularly with the effect of the Covid-19 pandemic on the economy.

Phiri said the department had finalised the draft Bill addressing the unconstitutional provisions of the Drugs Act as ordered by the court. The amendments to the medicines control legislation was being dealt with by the department of health. “The state of disaster will impact negatively on the timelines for the finalisation of the Bill, due to the impact on the public consultation process and introducing the Bill into Parliament and finalisation before the deadline of September 17, 2020,” Phiri said.

A number of departments, the police and the prosecuting authority had made their inputs to the Bill, which would be put out for public comment when the process opened up. But Phiri was not able to say when this would take place.

“It is not possible to provide an estimate of when the Bill will be finalised by Parliament. Even in the normal course of events the department would not be able to determine the parliamentary timeframes,” he said.

Paul-michael Keichel of Schindlers, a Johannesburg-based legal firm specialising in the cannabis industry, said there had been no public process or publication of a draft. “We do not really have insight into what the government is planning as a whole. We are reasonably certain, however, that different departments, for example agriculture, fisheries and land reform, and trade and industry, are pushing for the rolling out of hemp and even cannabis proper, whereas health and justice, or at least certain vocal people within them, are far less keen,” Keichel said.

It would be “‘short-sighted” for the government to allow people to grow, use and share cannabis privately, but then refuse to formalise an industry that could create many jobs and bring in significant tax revenue.

“We are facing an unprecedented situation and the government should be entertaining anything that could viably allow for entrepreneurship, innovation and an economic boost. Worldwide cannabis is proving to be one such thing. If the government wants us to believe that such a trend should not establish itself here, then it needs to tell us why not,’’ he said.

Inkatha Freedom Party MP Narend Singh, who had been driving the process around a medicinal cannabis Bill, said the party had agreed to withdraw the legislation in return for the state amending the existing legislation to allow for the production of medicinal cannabis products.

A number of licences have been granted for growing hemp and cannabis for medical purposes.