Dagga grows prolifically across South Africa – a point that hasn’t gone unnoticed by astute business players elsewhere who are hoping to cash in on the world’s new gold rush. In this podcast, South African cannabis entrepreneur Pierre van der Hoven outlines to BizNews founder and editor-in-chief Alec Hogg how the fledgling industry needs some help developing. And, he points to warning signs that companies based elsewhere could take advantage of regulatory disarray. That, in turn, would mean countries like China and Canada reaping the economic benefits of SA-grown dagga. President Cyril Ramaphosa and his team have pledged support for the cannabis industry. Now the sector needs organisation and planning to ensure that dagga can be the money-spinner, wealth-creator and employment spark that South Africa so desperately needs. – Jackie Cameron
Cannabis entrepreneur Pierre van der Hoven is ready to take plans for a flourishing dagga industry to a level where it can start becoming a significant job creator and boost to the economy. But red-tape is getting in the way.
In this podcast, Van der Hoven sets out some of the stumbling blocks for local cannabis entrepreneurs and tells BizNews broadcaster Alec Hogg that foreign players could steal a march on South Africa.
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Van der Hoven says his organisation has submitted applications to receive permission to launch the industry. “The problem with the law is it is fundamentally wrong. The law starts with the statement that the cannabis plant is illegal and from then on everything is illegal.”
“We’ve put in lots of applications. A whole batch of research applications were approved last year.”
If the law says one thing, and the president says another, the law must be changed quickly, points out Hogg.
The plan, says van der Hoven is, instead of changing the main law, to push for rescheduling the plant and derivatives from the plant – like CBD.
“That process is underway. The law as it stands says you can farm medical cannabis as long as you get a licence from the Department of Health.”
But, continues van der Hoven, there’s a different process for hemp, which means “hemp, which is cannabis with low TCH”, and “that has to change”.
You can farm hemp but you need to go through a regulatory hurdle with the department of agriculture. Therefore, hemp needs to be rescheduled, says the cannabis entrepreneur.
A lot of measures are in place already but not being implemented properly, he points out.
Van der Hoven outlines Ramaphosa’s commitment to harnessing dagga for economic growth and reads from his speech: “This year we will open up and regulate the commercial use of hemp products, providing opportunities for small scale farmers and formulate policy on the use of cannabis products for medicinal use to build this industry in line with global trends.”
This has already been happening, says van der Hoven. “There’s a difference between cannabis and hemp… And, something which is hugely significant is that we cannot take international regulations because they exclude small farmers,” he continues.
Ramaphosa has “hooked onto the principle that we will include small farmers, which I think is fantastic”. “What we really need is job creation. We need to treat regulations differently,” he tells Hogg.
The most significant point is to provide opportunities for small scale farmers, discuss van der Hoven and Hogg.
Van der Hoven outlined what the international players are doing in South Africa. Hogg notes that “we hear” that the Chinese and Canadians are “here in full force” looking for opportunities in the cannabis sector.
The Canadians are here because the climate and land are perfect for the growth of cannabis; Chinese are getting the right to tracts of land, says van der Hoven.
The cannabis entrepreneur says “foreign direct investment is great” but bringing Chinese strains of cannabis into South Africa “is not good for us, at all”.
“Our view is you need to create a number of big South African-owned cannabis companies that can compete internationally. You need to focus on beneficiation and value add. Don’t turn us into farmers, because that’s what they (foreign players) want.
“The reason other countries are coming here is because we can produce cannabis at a fraction of the costs involved elsewhere. But we don’t want to be a cheap labour supplier. We want to keep some of the wealth in the country, transfer skills, become an engine for growth – way beyond cultivation,” is van der Hoven’s message.
Hogg sees parallels with the great minerals rush of the last century. “International companies could come here, ship out raw materials and not develop the local economy.”
We must not allow “the second colonisation”, agrees van der Hoven.
Avoiding this will require an efficient regulator, is his view. There is a mess when it comes to understanding black economic empowerment. The country needs a “master plan” or “framework” to ensure this industry can be developed in the best interests of citizens, adds the businessman.
