Industry leaders have called for urgent policy reform to accelerate South Africa’s industrial hemp sector and create new jobs. This was the key message at a recent industrial hemp roundtable hosted by the Localisation Support Fund (LSF), where stakeholders discussed strategies for growing the cannabis and hemp industry.
Opening the session, LSF CEO Irshaad Kathrada explained that the organisation was established to support industrial development through partnerships between the government and the private sector.
“The LSF was created to mobilise expertise and strengthen manufacturing and value-chain development. When the president said South Africa should lead in industrial hemp and cannabis, many people asked: where, how, and with what resources? What we need now is a coherent industrial strategy that can turn policy intent into real economic activity,” Kathrada said.
The fund, formed with the department of trade, industry and competition and supported by companies such as Coca‑Cola, also marked the launch of a year-long research study examining how South Africa could develop a competitive industrial hemp sector.
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From crop to commercial value chain
Presenting the study’s findings, Ayanda Bam, executive director at Zageti Solutions, outlined research covering the entire hemp value chain from seed development and cultivation to processing and manufacturing. The project was conducted with researchers from the University of Cape Town and the Development Policy Research Unit.
“One of the key challenges facing the sector is the lack of reliable data, both locally and globally.
“Hemp can be used to produce thousands of products, but each requires different processing methods, markets, and production systems,” he added. The study grouped hemp applications into five categories: food, fibre, feed, fuels, and pharmaceuticals.
While hemp is widely promoted as a promising crop, Bam cautioned that success depends on a functioning value chain. “Farmers need access to viable markets, finance, and technical expertise before planting at scale,” he said.
Opportunities for farmers, but gaps remain
Access to seed is a major constraint. South Africa relies heavily on imported hemp seed, with only two locally bred varieties available from the Agricultural Research Council (ARC).
Permits issued by the department of agriculture indicate a strong interest, with over 1 700 cultivation permits granted by September last year, covering nearly 29 000 hectares.
However, Bam noted that permitted hectares do not necessarily reflect actual production. Early trials suggest KwaZulu-Natal, the Eastern Cape, and the Western Cape offer favourable conditions for cultivation.
Access to capital was another major theme. Cleola Kunene, executive head of SME development at the Johannesburg Stock Exchange, said investors will support the sector once commercial viability and governance are clear.
“Money goes where there is opportunity and where risk is managed. If there are guaranteed returns and governance structures in place, capital will follow,” she said.
Echoing this, Bam suggested pilot projects, advising, “Start small, test what works, learn quickly and then replicate successful models. The sector cannot rely solely on small enterprises.”
Regulatory misalignment
Phumla Mabizela, founder and CEO of Capa Bokone Hemp, highlighted inconsistencies between policy and practice.
“Dispensaries operate freely, yet growers risk arrest. Products such as THC-infused beverages and teas exist commercially, but there’s no clear policy for registration or limits. Industries are ready to commercialise, but policy hasn’t caught up,” she said.
John Jeffery, project manager for the Cannabis Master Plan, outlined the legal framework, emphasising that hemp and cannabis are the same plant.
“Cannabis for private use has been decriminalised, but commercial trade remains illegal. The Private Purposes Act will remove cannabis from the Drugs and Drug Trafficking Act and enable the department of agriculture to regulate the cultivation of plants containing over 2% THC,” he explained.
Garth Strachan, technical consultant to the presidency’s hemp and cannabis project office and the Industrial Development Corporation (IDC), said new legislation could clarify the framework.
“Even once hemp is treated as an agricultural crop, different regulations will still apply depending on the final product,” he said.
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