With the cannabis economy gradually opening up in Africa, leading players to talk about the commercial opportunities as also the consumer and patient wellness it offers. What are the barriers to building something new from the ground up in this space?
BY PETER ENGELBRECHT
HAVING SPENT 25 years working with high-growth startups as a Chartered Accountant, Mark Corbett, the Managing Director of Highlands Investments, found himself working with a cannabis company based in Lesotho, a landlocked kingdom encircled by South Africa.
“I was intrigued by a category that was causing so much disruption across multiple industries including healthcare, consumer brands, tobacco, alcohol, and agriculture. I felt it was a once-in-a-lifetime opportunity to be part of this evolution and play a role in what is essentially the end of another prohibition.
“I am also a very firm advocate for the move away from lifestyle medications like opiates to more sustainable plant-based medicines like cannabis and psilocybin,” Corbett tells FORBES AFRICA.
With a new career in medical cannabis, he has found it to be equally exciting and frustrating.
“Excitement because of the obvious opportunity to both change the way consumers engage with plant-based medicine and to generate much-needed employment and growth in markets like Africa; frustration because legislation and regulators around the world are moving unbelievably slowly to legalize and formally regulate the industry. This allows the black market to thrive and prevents patients from having access to standardized, regulated and clinically-tested medicines.”
Lesotho began paving the way for the cannabis market in 2017 and was one of the first African countries to grant licenses for the cultivation of cannabis for medical and scientific purposes.
Warren Schewitz, CEO of Goodleaf, a CBD company based in South Africa, says: “We have a license to grow up to 200 hectares at our farm in Kolojane, Lesotho. We currently have the infrastructure to grow 20 hectares of CBD and THC cannabis and target 600kg-700kg of dry flower per hectare.”
In South Africa, cannabis is decriminalized for personal or recreational use within the confines of one’s personal property and has been lowered in its scheduling status from a schedule 7 to a schedule 6 for tetrahydrocannabinol (THC) and schedule 4 for Cannabidiol (CBD). The difference between THC and CBD is that THC is psychoactive which sparks the proverbial “high” when smoked. CBD on the other hand is a non-psychoactive substance that has neuroprotective properties.
Regarding the legal aspects of the cannabis business in South Africa, Schewitz says: “Our cultivation business, Highlands Pure, is located in Lesotho and our consumer brands business, Goodleaf, is headquartered in South Africa. In terms of our growing operation, the Lesotho government has taken a progressive stance to cannabis legislation and is very supportive of local cannabis cultivators… The government is now incredibly focused on building a cannabis economy and we anticipate the sale of medical cannabis within the next 12 months. On the recreational side, private cultivation and consumption for personal use within the confines of one’s private dwelling are allowed and we also anticipate this to become more mainstream in the next 24 months.
“The current evidence shows that progressive cannabis regulation supports the formal economy and can have real benefit to consumer and patient wellness, the relevant authorities have to work through all the scenarios and implications…and this takes time.”
Highlands Investments services both the South African CBD wellness market and the global THC and CBD markets, with the bulk of their products destined for the European medical cannabis market.
The medical cannabis industry is still in its early days, especially in Africa, and as with any other medication, in order for you to become a manufacturer, producer, or distributor, one would need to break down the barriers that govern the industry.
“The barriers to entry are extremely high,” says Corbett. “Investors believe that once they have a license, they are good to go. That couldn’t be further from the truth and tens of millions are needed to invest in a fully-fledged certified cultivation business that can service the needs of the medical and wellness markets.
“There are plenty of clinical trials ongoing for cannabis and until they are complete, the number of registered cannabis medicines will remain low. However, in a few years’ time, one would expect to see dozens of registrations being granted in categories like pain and epilepsy and this will lead to a massive industry globally.”
Schewitz predicts the future of the cannabis market in Africa. “The African market has multiple opportunities both in terms of its unique history and relationship with cannabis, huge consumer opportunity and low-cost growth and manufacturing. We have some of the most well-known global cannabis strains (Durban Poison, Malawi Gold) and also the average consumption of cannabis is almost double what it is anywhere else. We have 40 million cannabis users on the continent which is significant.”
Cannabis is also making headway in the battle of opioid addiction.
As the opioid crisis grows and solutions need to be found for chronic pain, companies like the Johannesburg Stock Exchange-listed company, Labat, a player in the world’s cannabis economy, are looking to uncover the opportunity to replace opioids with medical cannabis in the management of chronic pain. Cannabis posits itself a possible solution to the negative side effects of opioids, namely sedation and respiratory depression.
Dr Shiksha Gallow, Medical Director at Biodata, also the Principal Investigator of a study into the potential use of cannabis to treat chronic pain, says research shows cannabis is an effective pain medication and that “the potential is really going to be good”.
“If we look at South Africa in 2018, we had 17,029 people that had died from an opioid overdose. So although they are effective in pain management, it is also linked to a plethora of side effects and the main side effect being dependence which leads to a possible overdose. On the other hand, if we look at cannabis, it is a very safe medicine and no one has ever overdosed on whole-plant cannabis and the reason is actually scientific because cannabis doesn’t have any brainstem receptors.
When we look at dependency, cannabis is safe because its addiction rate is only 9%, where drugs like opiates are sitting at around 30% addiction rate,” she says. The more people like Dr Gallow conduct research into the medicinal benefits of cannabis, the easier the laws regulating cannabis might become. Only time will tell when the cannabis economy will see its own high on the continent.