South Africa's Cannabis Industry Poised for New Growth as Government Shifts Regulatory Leadership

In a significant move demonstrating its commitment to develop and regulate its burgeoning cannabis sector, the South African government is transitioning the leadership of its national cannabis master plan from the Ministry of Agriculture to the Department of Trade, Industry, and Competition. This strategic shift is aimed at expediting the creation of a robust legal framework and stimulating commercial growth within the industry.

President Cyril Ramaphosa's government has been proactive in addressing the opportunities within the cannabis market. The Constitutional Court's 2018 ruling, which affirmed the right of South Africans to grow, possess, and use cannabis privately, set the stage for legislative advancements. However, the transition from illegal to legal trade has been slow, and it took until 2023 for the Cannabis for Private Purposes Act to be enacted. This Act currently allows for private cultivation, possession, and consumption, but stops short of legalizing broader commercial activities.

Recognizing the limitations of existing policies and the need for a cohesive commercial strategy, Minister of Trade, Industry, and Competition, Parks Tau, announced that a comprehensive cannabis act is expected to be tabled in parliament next year. This act aims to integrate various components of the industry, which until now have suffered from bureaucratic inefficiencies, lack of clear regulation, and inadequate financing.

The shift in regulatory responsibility is expected to address these issues by creating a uniform policy that will cover not only cannabis but also hemp industries, differentiating the diverse needs and potential of each sector. This includes revising the problematic THC levels allowed in hemp, a change that will be welcomed by local growers, enhancing their competitiveness in global markets.

Additionally, the government plans to regularize and properly regulate medical cannabis, which has been constrained under current regulations. Efforts will focus on developing policy from seed to sale, improving technological capacities, and incorporating small-scale growers to ensure an inclusive economic benefit.

The trade and industry department is now tasked with leading the master plan, with agriculture serving as a supportive role, particularly in unleashing hemp's potential, now less regulated than before. Industry spokesperson Yamkela Fanisi highlighted the department’s objectives to work within legal parameters while optimizing commercialization opportunities across the board.

Garth Strachan, President Ramaphosa’s special advisor on cannabis, emphasized at a recent conference the critical role of government in removing investment barriers and steering policy development across the value chain. He also marked the urgent need to address the current "crisis of illegality", highlighting misuse of permits and regulations that have allowed a semi-regulated market to flourish, often at the expense of legal frameworks and international standards.

As South Africa aims to align its cannabis production with global norms, the forthcoming changes promise to not only strengthen the legal and economic landscapes but also position the country as a key player in the international cannabis market.