What role can cannabis play in rebuilding the South African economy after Covid-19? Is cannabis green gold, as many claim, or fool’s gold, as we’ve seen in Canada? Does it really have health benefits, or is that all smoke and mirrors?

To answer these questions and more, Business Day, in partnership with Afriplex, recently hosted a webinar where industry experts explored the growth of the cannabis economy.

Radio presenter Joanne Joseph moderated the discussion between Mark Diuga, managing partner of the African Growth Fund, Sean Willard, pharmacist and holistic cannabis practitioner at Releaf Pharmaceuticals, Bronwyn Williams, economist and trend analyst at Flux Trends, and Tim Harris, CEO of Wesgro.

Watch the video:

Green gold or fool’s gold?

Diuga explored what South African can learn from Canada’s mistakes after legalising cannabis in 2017.

“Every entrepreneur believed they had the best new company, saw it as a ‘get-rich- quick’ opportunity and made blind investments. Product prices dropped drastically and so did share prices,” he explained. “A lot of investors got burned in the process. We need to make sure we protect investors.”

Why bother then? “Cannabis is one of the fastest growing industries in the world,” he said. “The UN reported that close to 250m people around the world consume cannabis.”

The fact that cannabis is a health and wellness product and available despite the COVID-19 pandemic makes it even more attractive to investors, he added.

“There’s so much you can do with one plant,” he said. “It’s a huge opportunity to create tangible impact locally, to create a winning portfolio of companies, rather than just one or two individuals, and to really make sure South Africa competes globally.”

Cannabidiol – not all smoke and mirrors

Willard argued that stigma and misinformation are holding the cannabis economy back. “As a pharmacist, I was sceptical about cannabis and CBD, as were my fellow medical friends, but through education came perspective.”

CBD is, of course, cannabidiol, or one of Willard’s three Cs:

  • Cannabis – a type of plant that includes both hemp and marijuana
  • Cannabinoids – chemical compounds formed in cannabis and in the body
  • Cannabidiol (CBD) – a cannabinoid produced in cannabis

“It’s important to understand that there are different varieties of cannabis,” he said. “Hemp is a variety of cannabis with tall, sturdy stalks and low levels of THC, while marijuana has high levels of THC.”

Is cannabidiol good for you? Willard explained that CBD products affect the endocannabinoid system, which regulates body temperature, blood pressure, and overall homeostasis. This makes CBD products ideal for pain relief and anxiety.

But is cannabis still in vogue?

Economist and trend analyst Bronwyn Williams said now is a good time to invest in cannabis. “We do need to move fast if we want to take advantage of this emerging, growing, global opportunity that is on the horizon,” she said.

“In SA, we have good growing conditions, and our legislation is slowly opening up and allowing businesses the opportunity to participate,” she continued. However, there are risks. “Our government could decide to reregulate the industry a bit more or extend taxation to these new bourgeoning industries to try and find money to keep the economy going,” she added.

But it’s not all doom and gloom. “Globally, the recreational cannabis user still accounts for two thirds of the global cannabis market – that enormous market we see creating jobs and services and businesses in places like Canada and across Europe,” she explained. “The medical use of cannabis is still only one third of the market – so that is an opportunity that might stimulate ideas.”

Williams shared fascinating anecdotes of how this growing market is creating entirely new product categories, for example:

  • Marijuana for moms to help working mothers cope with stress;
  • Marijuana-infused menstrual products to alleviate pain and
  • Cannabis as the new champagne for teetotallers.

“We need to make sure regulation enhances the ability of the industry to compete – the opportunity for this market is to create more jobs for more people, and to create a more inclusive economy,” she said.

Cape Town – a fertile hub for medicinal cannabis

Harris argued that the Western Cape, as the fifth largest exporter of agricultural goods in Africa, is in a prime position to become the medicinal cannabis hub of Africa.

What makes a cannabis hub? Competitive advantage, differentiation and exporting – and Harris believes the Western Cape can deliver all three. “We already have the ecosystem in place in terms of agriculture, medical, and research and development,” he said.

Following the presentations, managing director of Afriplex Danie Nel joined the speakers in a panel discussion on the role of cannabis in rebuilding SA’s economy.

The panel discussion starts at 59:00:

Afriplex is a South African company rooted in the development and manufacturing of botanical extracts, complementary medicines and food and beverage product solutions. Visit www.afriplex.co.za to learn more.