SA’s fledgling cannabis industry is set to reach new highs after a local company recently exported one of the country’s first shipments of the product to Europe.
Felbridge, which produces cannabis on a farm near Stellenbosch, announced that it has successfully exported its first shipment of medical cannabis to Puregene in Switzerland.
Felbridge was granted the first licence in the Western Cape to start growing cannabis last year. In his state of the nation address earlier this year, President Cyril Ramaphosa announced that the government will formulate policy on the use of cannabis products for medicinal purposes this year, and open up and regulate the commercial use of hemp products, providing opportunities for small-scale farmers.
Felbridge CEO Leslie Zetler said, “Exporting SA’s first shipment of medical cannabis to Europe represents another major milestone for our group and reinforces our view of the proven benefits that medicinal cannabis holds as a viable, natural alternative to conventional medicines.”
Zetler said the export is significant in that the company’s cultivation team met the stringent quality and product specifications required of the receiving parties’ regulatory authorities and “further confirms our belief that Felbridge will play a key role in the supply of medical cannabis from SA to Europe and other regions”.
A report released in 2019 by Europe-based market intelligence and strategic consultancy Prohibition Partners showed that Africa’s legal cannabis industry could generate more than $7.1bn a year by 2023 if more of the continent’s big markets open up and follow the trend of legalisation seen in the US, Canada and Europe. In SA, the domestic market could be worth almost R30bn by 2023.
According to the report, while cannabis remains illegal in most African countries, many nations are keen to embrace cultivation as a way to boost their economies. “Cannabis is already widely grown and consumed across the continent, with production currently standing at about 38,000 tonnes and consumption rates at 13.2%.”
African governments have not yet followed the trend of legalisation seen in Europe and the Americas. Just a handful of African countries have taken steps towards legalising cannabis use, including SA, Lesotho and Zimbabwe, which recently approved its use for medical purposes, but recreational use is still illegal.
Industrial hemp
JSE-listed companies Labat Africa and Nutritional Holdings have also entered the lucrative cannabis businesses through acquisitions. Labat is repositioning itself to focus on the fast-growing cannabis industry and has made a number of acquisitions in various sectors, such as farming, retail and healthcare. It intends growing its healthcare unit, in which its cannabis-related operations are housed.
The group is raising R112m in capital through a share issue sale for the expansion of its medical cannabis business.
Nutritional Holdings, the manufacturer and distributor of pharmaceutical products and a range of natural medicines, is buying cannabis company Ukusekela Holdings for R140m.
Ukusekela holds various licences in Lesotho, Zimbabwe and Swaziland for the cultivation, harvesting, manufacturing, distribution, importing and exporting of cannabis, as well as a research laboratory in SA. The company also has a distribution agreement with one of the largest cannabis pharmaceutical companies in Europe.
Labat CEO Brian van Rooyen has said previously that the company is “transitioning into a fully integrated healthcare company with the establishment of Labat Healthcare. We intend to be a leading medical cannabis player in the SA healthcare market, supported by the development of a lucrative, industrial hemp market in SA”.
He said the industrial hemp market, as it emerges as a new industry for SA, offers opportunities to support emerging farmers, create jobs, uplift communities, help utilise land productively, develop skills, and contribute to health and wellness.
Van Rooyen said studies conducted by Labat have shown that at least three job opportunities can be created if cannabis is grown on 1ha of land.
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