The investment potential of a medicinal cannabis industry

Wesgro, the official tourism, trade and investment promotion agency for Cape Town and the  Western Cape, today hosted a first-of-its-kind discussion on the economic  potential of the medicinal cannabis industry for South Africa.

At the engagement a diverse range of stakeholders from all levels of government came together to discuss topics  related to the fast-growing global medicinal cannabis economy, and the significance for the Western Cape and South Africa. The discussion follows the introduction of a licencing framework by the Department of Health and the South African Health Products Regulatory Authority (SAHPRA) in 2017.

The licencing framework allows domestic cultivation of cannabis for medicinal use and for scientific and  clinical research purposes. Currently, patients are able to obtain cannabis products for medicinal use in  terms of section 21 of the Medicines and Related Substances Act, which allows  medical practitioners to apply to SAHPRA for permission to access and prescribe unregistered medicines. Under this process medicinal cannabis products may be made available, under medical supervision and in exceptional circumstances, to specific patients.

To date, patient access to unregistered pharmaceutical products containing cannabinoids has been enabled by SAHPRA through importation of these products. The licencing framework for domestic cultivation and research was introduced in order to ensure availability of standardised quality-assured medicinal cannabis grown locally for the manufacture of suitable pharmaceutical products.

Wesgro CEO, Tim Harris said “The introduction of this licencing framework has resulted in significant investment  interest from domestic and foreign investors in medicinal cannabis. There is now an opportunity for South Africa to become the leader on the continent, and for provinces like the Western and Eastern Cape to lead the country, in the creation of jobs in this emerging sector.

Topics discussed at the engagement included investment and export potential, the role of small-scale farmers, the Cape as a leader in innovation and R&D, and the regulatory reforms required to unlock associated job creation.

Addressing delegates in a welcoming note, Western Cape Minister of Economic  Opportunities, Beverly Schäfer, commented: “In countries where the use  of medical cannabis is legal, the process is strictly controlled. There are many legal and quality control requirements in order to produce pharmaceutical grade products. If we intend to pursue this industry, it is worth exploring cannabis as a crop for the Western Cape- the benefits, as illustrated in other countries that have already done the work, are enormous. In the United States, where a number of states allow its medicinal use, the number of job openings in the cannabis industry in 2017 grew by 445%, outpacing technology and healthcare. And it’s estimated that by 2020 they will be able to create 250 000 new jobs, creating jobs that never existed before. In Canada, universities are actually starting to offer cannabis specific programmes to be able to staff the industry.”

Alderman James Vos added, “As the incoming Mayoral Committee Member for the newly formed Economic Opportunities and Asset Management portfolio, it was personally very exciting to be on the forefront of these deliberations and possibilities. My directorate oversees the facilitation of economic opportunities within Cape Town, and as such, we very much welcome the exploratory mandate of this workshop. Foreign investment interest in the space is large, and can potentially bring significant income, jobs, and skills.  Cape Town is known for health care excellence and leadership, it is the place  of the first heart transplant. With Cape Town’s proximity to excellent universities and world class infrastructure there is much potential for research.”

Tim Harris concluded, CEO of Wesgro, said: “It is not often that an entire new global industry emerges from nothing, to a $50bn-plus sector – as cannabis is predicted to in the next decade. Today’s workshop highlighted the potential economic benefit a responsible and innovative regulatory regime can bring to South Africa.”

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