Urgent regulatory reform, farmer development, and market access for South Africa’s cannabis and hemp sector form the cornerstone of a ground-breaking research paper by the Institute for Economic Justice (IEJ).
A report by the IEJ has indicated that though the cannabis industry can contribute to inclusive economic development, there is still a long way to go to ensure that the barriers growers faced are dealt with.
The 75-page report is called “Inclusive development in the South African cannabis industry: assessing the challenges, encourages industry players to get the basics right”.
Growth prerequisites
A contributing researcher to the report, Katrina Lehmann-Grube, said that in order for cannabis to flourish in South Africa, policy challenges required serious focus.
“We need to establish a competitive position in the global cannabis market, avoiding the commodity trap and embracing social and environmental upgrading.
“We also need to create an inclusive cannabis industry and leverage on the domestic demand,” she added.
Lehmann-Grube said once the country has regulated legal adult use of cannabis, she anticipates key commercial growth opportunities and a significant uptick in domestic use.
“There is a need for regulation to balance commercial, social and health imperatives and also an urgent need to create clarity on the legal and regulatory framework.”
Meanwhile, according to the report, achieving growth – inclusive of the growers – in the cannabis industry, requires an urgent roundtable discussion. These discussions, the report said, should focus on the regulatory system which hampers development and the production of cannabis and hemp in the country.
Focus on farmers and growers
Andrew Bowman, who also worked on the paper, highlighted that the current licensing system creates major barriers to entry for small producers and traditional growers.
“There is a need to explore a tiered licensing system, focus on lowering barriers and channelling support for inclusion,” Bowman said.
He explained that supporting traditional growers and small enterprises were key to ensuring a more inclusive and economically viable cannabis industry.
“There is a need for targeted support like infrastructure, finance and market access for small growers to be able to grow. As well as the creating of value chain links by down streaming agencies for aggregation, processing, quality control and farmer support,” he said.
Bowman added that issues around inclusion and sustainability should be emphasised in policy discussions and drafting.
“There is no time, there is a need to act with urgency. Social-economic and opportunity costs from current regulation require us to move with speed which might work to our advantage for international markets.”
The government needs to get to work
Meanwhile, Congress of the South African Trade Union (Cosatu) deputy parliamentary officer Tony Ehrenreich has called on the government to put in place policies that would ensure job creation and sustainability in the cannabis sector.
“What we really want to see is evidence-based policy, and this paper should serve as a central part of policy making which could see the country tackling the curse of unemployment, especially among young people in our communities,” he said.
Ehrenreich said the research was an exceptional paper to be produced by the Institute for Economic Justice and was laying a solid foundation for policymakers to start working.
“All comments we have received thus far from the labour movement is that the paper is good and it puts us as labour in a more favourable [position] to get discussions going, [and] to put some case on the ground, to mark our missions.
“This paper gives is a step in the right direction to say what we want to see in government policy, especially in the context of a developmental state that is aimed to help those who are marginalised in the society.”
Training needed in goverment
Garth Strachan, a consultant in the presidency’s project management office, echoed Ehrenreich’s sentiments.
Strachan added that although it was advisable that civil society puts pressure on the government to make decisions on long-standing policies, it was also important for society to recognise how government works.
“We have to recognise realities in government itself where there are nine government departments that need to come together for regulatory and economic reform, There is scientific knowledge that needs to be considered,” he said.
Strachan said it was important that government receives training on cannabis as well. This should especially be the case for agricultural extension officers who are on the ground with farmers and need to know how the sector operates.
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