International:

A Spotlight on South Africa

I recently spoke at the Cheeba Cannabis and Hemp Summit in Johannesburg, South Africa. South Africa is often overlooked as a cannabis and hemp market, despite its long tradition in the industry. The country has a robust, thriving domestic market and is a significant exporter of cannabis to Europe. And its market has recently experienced an upswing in terms of its sophistication and opportunity.

For perspective, South Africa is one of the largest cannabis markets in Africa. Despite its relatively smaller revenue size, the per capita consumption is through the roof. There are two very distinct markets in SA. One that supplies the very poorest of the poor, and the other that caters to those with means.

South Africa is ripe with opportunities, in both hemp and cannabis. The one thing that separates SA from the rest of the pack is the passion about cannabis that it brings to the table. Innovation is just beginning. Another difference is that the regulators are listening to the industry, rather than simply trying to regulate them for regulatory purposes.

The hemp market is also very nascent, having been approved as an agricultural crop just a few years ago. The hemp market and the cannabis market are coexisting and working together to promote the plant. This was refreshing to experience and see. At least they are talking to one another. Hemp product manufacturers are looking at more value-added products, which are more appealing to investors.

In terms of notable experiences on the trip, while I was there, I toured a site that produces low-cost, modular hemp houses. An entire house’s materials weigh less than one ton, yet the structure is extremely sturdy and can be erected in less than a week. A two-bedroom house, including the materials and construction, will cost less than $50,000. This is a major opportunity for those interested in bringing this technology to your community to address affordable housing.

Another observation was related to a thriving tourism industry. There is a nascent canna-tourism industry that needs a little bit of guidance but already has established trade routes and operators. Whitney Economics and our partners at Applegarth Intelligence are already beginning to engage with tourist boards and tourist operators to provide insights on how to leverage the canna-tourism opportunities economically.

On the international side, cannabis exports are huge. By some estimates, providing 30% of the EU supply, second only to Canada. The quality is relatively good, it but needs a little more consistency. It also needs the technology to supplement the tradition. There are some incredible landrace strains there that can differentiate the market from others and can set South Africa apart from the rest of the world.

My summary from South Africa: All of this is like the clay in a sculpture. The form is taking shape, but it needs a little refinement. I came away very impressed by the market and its enthusiasm. And I was very grateful for the opportunity to present at the conference. This was the first in what will end of being many trips to this country. There is way too much opportunity to ignore.