South Africa Cannabis Industry: Licences and Growth Rates

South Africa Cannabis Industry: Medicinal Cannabis Businesses

South Africa Cannabis Industry: Licences and Growth Rates

Cultivating Medical Cannabis in South Africa

The South Africa Cannabis industry is evolving. Here’s the latest news on growing medicinal cannabis in South Africa regions, including the medicinal cannabis industry’s impact on the South African economy.

2019 has been a tough year for South African farmers, who face a more uncertain future than ever before.

Debating on land reform and battered by the weak currency, the local Rand has seen a slide over recent years that has culminated in record high fuel prices and higher unemployment.

Farmers might be turning the corner however, given a recent decision made by the Constitutional Court, the highest court in South Africa.

New industry growth

Some light has been shone on the beleaguered farming community, with many thinking now is the time to take advantage of a burgeoning new global industry – legalised medicinal cannabis cultivation and CBD exportation. The Constitutional Court’s decision has paved the way for medical cannabis cultivation in South Africa, with licenses now being given out to farmers meeting stringent criteria.

What makes South Africa a great place to grow medicinal cannabis for exportation?

Experts in medicinal cannabis cultivation believe South Africa is a great place to cultivate and manufacture medical marijuana (medical cannabis including CBD products). Here’s why South Africa production license applications, GMP extraction methods, related engineering designs, safety and security measures are growing in demand.

Climate conditions, temperatures and rainfall averages affecting medicinal cannabis crops and yield

  • The climatic conditions in South Africa generally range from Mediterranean-weather conditions in the southwestern corner of South Africa to temperate conditions in the interior plateau; with subtropical conditions prominent in the northeast regions. Most of the country has warm, sunny days and cool nights.
  • Temperatures are influenced by variations in elevation, terrain, and ocean currents more than latitude.
  • Rainfall in South Africa generally occurs during summer months (e.g., November through March in the southern hemisphere).
  • In the southwest around Cape Town, however, rainfall generally occurs in winter (e.g., June to August).

Solar Radiation Averages and Solar Energy in South Africa regions

The southern African region has sunshine all year round.

According to the South African Energy Department (the Department of Energy in the Republic of South Africa), the annual 24-hour global solar radiation average is about 220 W/m2 for South Africa, compared with about 150 W/m2 for parts of the USA, and about 100 W/m2 for Europe and the United Kingdom.

  • This makes South Africa’s local resource one of the highest in the world.
  • Thus, making use of solar energy can be highly beneficial and is a readily accessible resource in South Africa for cultivating medicinal crops for herbal medicines, such as hemp and CBD products.

Most areas in South Africa average more than 2,500 hours of sunshine per year

  • The average solar-radiation levels range between 4.5 and 6.5kWh/m2 in one day.
  • These solar radiation levels make it highly suitable to cultivate medical cannabis in specially-designed greenhouses for growing medicinal cannabis in the region.
  • This will dramatically reduce the cost of production when compared to indoor facilities, making it a highly competitive product.

PharmOut Ltd is an international consulting company specializing in Engineering, Design and Compliance for pharmaceutical industries and for medical-cannabis based businesses and start-ups. They are based in Australia and have offices in various countries around the world.  Contact PharmOut for support and design and GMP assistance with cannabis licence applications, export permits, greenhouse designs, clean room engineering, extraction lab designs and GMP, lighting automation/water resource management, and other professional consultation including GMP templates designed for new or existing facilities, CBD extraction labs and related firms (worldwide).

South Africa industry expansion

Licencing application requirements and licence approval timeframes in South Africa

Cannabis cultivation, exportation, extraction and GMP requirements

All cultivation of medicinal cannabis is subject to strict regulations and good manufacturing practices (GMP). Policies and regulations will examine a variety of additional licencing factors. These are likely to include crop yield and cannabinoid consistency, CBD product quality, security, safety and sustainability including land and water resource management.  In historically disadvantaged countries, security, stock monitoring and exportation logistics are also likely to require close supervision with dedicated, tamper-proof software systems. Other strict cultivation, CBD extraction and exportation standards are likely to apply; e.g., many industry experts expect to see frequent Government Regulation Agency audits of plantations, production and CBD extraction processes, and logistics and quality testing of exported products designed to meet global demand.

The number of South African licences issued for medicinal cannabis cultivation and exporting is not precisely clear, but at least four (4) licences appear to have been granted according to industry reports.

  • Timeframe for getting a medicinal cannabis licence approved for cultivation in South Africa:  Estimated 6 months, with some variance
  • Estimated cost of licencing including facility design: Up to R 6,000,000
  • Medicine Control Council of SA (MCC) controls and regulates the exportation licencing

Industry and Investor update: The response since PharmOut Ltd entered South Africa in consultancy roles has been truly phenomenal. I can understand why organisations view the medical cannabis industry as an appealing new sector opportunity, with unprecedented growth expected in consumer demand worldwide. However, this is a heavily regulated industry with strict production requirements to protect patient safety and employee security in view of producing and exporting this recently legalised drug.

 

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South Africa’s suitability for growing cannabis and for medicinal cannabis start-ups (industry consensus)

  • In a fledgling industry expected to be worth from $20 billion to potentially $650 billion by 2025, many people believe this is an optimal time to invest in large scale medicinal cannabis cultivation in South Africa.
  • Given the unique combination of weather and climate, labor costs and some of the best infrastructure in Africa, the country’s prospects for economic growth, including increases to South Africa’s GDP and GNP, appear significant in the global cannabis sector.

Cannabis Sector Growth expected in South Africa in 2019-2025

  • South Africa has an ideal climate for cultivating cannabis, with the world health organization estimating that South Africa is the 3rd largest producer of cannabis in the world.
  • Employed in both the formal and informal market, the Cannabis industry is keeping the bread on the table for over 1 million South African workers in a critically scarce job environment.
  • The key to going forward will be using these informal skills and industrializing it, with the rigors of meeting the current market requirements and GMP to compete at a global level.

As progressive legislation in Europe and the Americas represents a unique opportunity for the cultivation and exporting of medicinal cannabis and CBD. Given the value of the rand, South African cannabis could be highly competitive in the global market.

Author comments: A recent report by Prohibition Partners suggests that South Africa’s domestic market for cannabis and related products would be worth R27 billion by 2023. That’s big money in a country that is seeking alternative ways to stimulate growth and reduce unemployment levels.

With legal licenses being given out currently in South Africa, many are seeking to ‘get their piece of the pie’. There is a massive new opportunity in South Africa. While the market is still establishing itself, things are moving forward very quickly. Many believe that now is the time to get involved. This will be the modern day South African gold rush…the green rush if you will.

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