Sunday Times

How com­mer­cial dagga sales could grow ru­ral jobs

Many ru­ral jobs could be cre­ated if grow­ers supplied big firms

- By ASHA SPECKMAN speck­mana@sun­day­ Business · Agriculture · Marijuana Legalization · Society · Industries · Iceland · Constitutional Court · Austria · Belgium · Eastern Cape · KwaZulu-Natal · United States of America · Canada · Netherlands · Zimbabwe · Washington · Washington University in St. Louis · Belarus · BIND · University of Cape Town · Marijuana · Narcotic Drugs · Johannesburg · Tenet Healthcare · Lesotho · Melville · Howell, Michigan

● 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

 ??  ??
 ?? Pic­ture: Reuters/Chris Wat­tie ?? An em­ployee col­lects cut­tings from cannabis plants at Hexo Corp’s fa­cil­i­ties in Gatineau, Que­bec, in Canada this week.
Pic­ture: Reuters/Chris Wat­tie An em­ployee col­lects cut­tings from cannabis plants at Hexo Corp’s fa­cil­i­ties in Gatineau, Que­bec, in Canada this week.
 ?? Pic­ture: Lisa Hna­tow­icz/Foto24/Getty Im­ages ?? A hy­dro­ponic dagga lab in SA.
Pic­ture: Lisa Hna­tow­icz/Foto24/Getty Im­ages A hy­dro­ponic dagga lab in SA.

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