How commercial dagga sales could grow rural jobs
Many rural jobs could be created if growers supplied big firms
● The decriminalisation of cannabis for private use has reignited an interest in the herb and fired up the department of agriculture, which is working towards a commercialisation model for rural growers of dagga.
A Johannesburg business is also reporting higher traffic from curious new patrons since the Constitutional Court ruling last week that made growing and consuming dagga at home legal.
Khaye Nkwanyana, spokesperson for the ministry of agriculture, forestry & fisheries, said there was “substantial progress” in the review of legislation relating to cannabis use.
Parliament has 24 months in which to develop law that will clarify the court’s ruling.
The agriculture department is leading an interministerial team that is developing a new regulatory framework for hemp. In this regard it is looking at production, research and technology development, and commercial feasibility, among other factors.
Work on review of legislation will inform parliament’s process. “If they move with speed it should be less than 12 months to formalise,” Nkwanyana said.
Cannabis and hemp are both derived from the dagga plant. Hemp is the fibre of the plant, which is used to make rope, fabric and paper. It contains low levels of the psychoactive substance tetrahydrocannabinol (THC). Cannabis is the part of the plant that induces a mental and physical effect when consumed. Hemp may also be commercialised if the departments of health and of justice & constitutional development accede to the agricultural department’s request for legislative amendments to allow this.
Nkwanyana said the department of agriculture intended to help rural communities in the Eastern Cape and KwaZulu-Natal, which have been growing the plant for years, to gain access to export markets, particularly in the US where cannabis sales have created more than 100,000 jobs.
“We think it may vitalise the rural areas and in the longer term create massive [numbers of] jobs in the primary market.” He said planting, harvesting and transport would create jobs.
The department is also developing a framework for pharmaceutical companies to procure cannabis from rural growers.
“One of the things we’d like to prevent is for big pharmaceuticals to take over,” Nkwanyana said.
Canada, the Netherlands, Lesotho and Zimbabwe are among the countries that have decriminalised cannabis for medicinal or recreational use.
In a legalised market, cannabis prices are expected to decrease. In some parts of the US they more than halved following legalisation. In Washington, where cannabis was legalised in 2014, the cost fell from $25/g (about R350/g) to less than $10 by July last year.
Although SA is some way from legalising the commercialisation of cannabis, experts and sellers believe the Constitutional Court ruling will do little to shrink the margins of those selling cannabis now.
Stephen Moerane, a manager at 420 Café, said that in the days following the ruling, interest from curious new patrons swelled.
“It’s now socially acceptable. They came in, some of them for the first time.”
The Johannesburg-based restaurant, launched two decades ago, famously offers an alternative menu laden with cannabisinfused foodstuffs and products and allows customers to consume cannabis products on its premises.
Moerane said margins were unlikely to drop following the legalisation permitting private use. Some people may try to grow the plant at home but they may find the cultivation process is not simple.
A dealer in Melville, Johannesburg, who declined to be named, and who makes about R1,200 a month, said he had not experienced a surge in clients. But he added: “It’s a good ruling for people who smoke, especially when they have had to defend themselves from the police.”
The department of trade & industry has commissioned research into obstacles to and opportunities for SA actively playing in the growing global cannabis market and is seeking ways to industrialise the sector.
The UCT School of Economics conducted a study into marijuana consumption in SA last year using a sample of 2,000 cannabis consumers who were recruited through social media and through contacts with pro-cannabis organisations.
“The median price per gram differs greatly by quality,” said Nicole Vellios, research officer at the school.
“The standard deviations for all three price categories are large: R8.45 for low quality, R15.74 for medium quality and R54.53 for high quality, indicating a wide variance in prices.”
Simon Howell, research director at the African Policing Civilian Oversight Forum, said it would be difficult to establish the effect of a legalised market on cannabis prices.
However, “the criminalisation of cannabis has always disproportionately affected poor people more, so legalisation via costly regulation is unlikely to change the net effect, especially if licensing continues to criminalise non-licensed growers.”
Some people may try to grow the plant at home but may find it is not simple