DealMakers AFRICA 2019 Annual

The Cannabis Industry in Africa – a growing trend

Darryl Bernstein and Rui Lopes
 

It is estimated that Africa will soon be set to produce at least 38,000 tonnes of Cannabis per year (according to a report by Prohibition Partners); however, only three countries in Africa have any kind of legal framework for regulating the growth, processing and trade in Cannabis - Lesotho, Zimbabwe and South Africa. In most countries in Africa, the plant is currently traded illicitly – the urgent need for regulation in this sector, however, has led to recent legal developments in several countries. 

 

In late 2019, the Zambian government confirmed that it had approved a proposal to legalise the production of Cannabis for economic and medical purposes. It was reported that companies will have to bid for licences to cultivate, process and export Cannabis for medical use under the Dangerous Drugs, CAP. 95. According to reports, the licenses will cost an estimated US$250,000 and will be issued by the Zambian Ministry of Health. The Ministry of Health will also oversee the implementation of new policy guidelines and procedures, in line with existing policy and legal frameworks.

 

During 2020, two further African countries are expected to pass laws – namely Swaziland and Uganda. Swaziland is set to introduce a law that aims to regulate the commercial production of Cannabis for medicinal and scientific purposes. Uganda is also in the process of crafting a regulatory framework on the topic; however, the cultivation or use of Cannabis in both countries continues to remain an offence.

It was recently reported that 90 companies in Uganda, including foreign ones, had applied for licences to grow Cannabis, and that government agencies have been meeting to discuss awarding licenses for Cannabis production, but nothing has been decided yet. The Ugandan Government has noted that it is currently consulting on the economic benefits of Cannabis, as well as its medical value, potential for abuse, and the challenges of implementing regulation.

 

In Kenya, legislators have launched several campaigns to legalise the use of Cannabis for medical purposes over the last few years, but these have not yet borne fruit as there has been opposition. The Marijuana Control Bill, which was introduced in the Kenyan National Assembly in 2018, covers issues such as decriminalisation, and regulations governing possession, cultivation and the trade of Cannabis, but there have been no further developments in this regard. Currently, it is illegal to possess, grow or produce Cannabis in the country.  

 

In Cameroon, recent news reports outlined the development of a project that would purportedly allow the production of Cannabis oil in the country, but producing and growing Cannabis is currently still illegal.

 

The substantial economic potential offered by properly-regulated Cannabis markets in Africa means that regulating the industry is becoming increasingly urgent. According to the African Cannabis Report, the Cannabis industry in Africa could be worth more than $7,1 billion annually by 2023, if legislation is introduced in some of the continent’s major markets. This is most likely to lead to numerous further legal developments in this sector going forward, as African governments look to capitalise on the global demand for the medicinal plant.

 

Bernstein is a Partner and Lopes an Associate, Dispute Resolution Practice, Baker McKenzie Johannesburg.

© 2018 Gleason Publications (Pty) Ltd

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