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Western Cape is ‘cannabis hub’

The rise of the cannabis industry, specifically in the Western Cape, is positioning the province as a cannabis hub, said Beverley Schäfer, deputy speaker of the Western Cape Provincial Parliament.

She was the guest speaker at the opening of the CANNAFRICA CBD retail store at Willowbridge shopping centre last Wednesday evening. CANNAFRICA is the first CBD lifestyle brand on the JSE through its investment holding company, Labat Africa.

“The Western Cape is the 12th largest economy on the continent and Cape Town has the 17th largest economy in Africa. When we talk about being a hub in Africa, we are basing it on this very data – where the Western Cape, and even Cape Town, really rank as significant players in Africa,” she said.

“Over the past five years, the Western Cape has shown relatively strong performance in terms of average annual GDP growth, compared to other provinces and the national average. This is evidence of the economic resilience of the province,” Schäfer said.

“The role of agriculture in the Western Cape is pivotal to this industry. In 2018/2019 the Western Cape had the lowest rural unemployment rate in the country. Employment growth for agriculture saw an increase of 10.3% year-on-year. The rural unemployment rate saw a decline to 15.7% – a drop of 3.4% quarter-on-quarter,” she said.

“The Western Cape exports half of South Africa’s agricultural products and 40% of South Africa’s agri-processed products (food and beverages).

“More than a million bottles of South African wine are sold per day globally – coming almost exclusively from the Western Cape,” she said.

Schäfer said she believes this is an incredibly conductive environment from which to develop the field of medicinal cannabis.

“But we certainly also look forward to the opportunities that industrial hemp can bring. Our strong agro-processing and manufacturing capabilities will make the Western Cape a natural home for the manufacturing of hemp products once hemp gets going,” she said.

“The export team at Wesgro is currently using its global network to engage with key international markets. The team is already promoting South African and Western Cape cannabis, and developing export facilitation expertise in this complex area of international trade,” she said.

However, if the cannabis economy is to support economic recovery in this country, there is more work to be done.

“We need to address the grey areas and we need to move forward with commercial hemp. We need to provide the legal certainty that investors need, as within any sector of the economy. We need the national industrial strategy for cannabis to move forward and will have to see what the final version of the Cannabis for Private Purposes Act looks like,” she said.

Schäfer said, “If we are looking to cannabis to support economic recovery, we need to ensure that we are talking about inclusive economic recovery”.

“We need to make this industry work for as many South Africans as possible. There is a big danger of big pharmaceutical and established international multinationals coming in and leaving little space for locals. We need to strike a balance. There are currently also very high barriers to entry in the medicinal cannabis area created by the high cost of obtaining a licence,” she said.

According to Schäfer, outsourced or contract cultivation models would need to be explored and approved by the regulator to ensure small farmer inclusion.

“If small-scale growers could be accommodated under the private use allowance there could be a workable solution. There is a wealth of knowledge from generations of growing African landraces – this should be protected and incorporated.”

Schäfer said she believes the Western Cape has a role to play in driving the South African cannabis economy, “but by no means is this a Western Cape only story”.

“This is a story in which many regions in South Africa, and even Southern Africa, are able to play to their strengths. Together we can be a powerhouse.

“So my request here today is let’s do this right. Let’s spread the opportunity and build a SA Can cannabis powerhouse industry here,” she said.

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