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‘CANNABIS MARKET CAN REVIVE ECONOMY’

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MBABANE – There is no better time to penetrate the cannabis market than now, according to the Eswatini Cannabis Association.
The chairman of the association, Saladin Magagula, said post COVID-19, the cannabis market can help resuscitate the crumbling economy and the country can recover from the gashes of the pandemic in a very short period.


This comes after a study on Southern Africa’s cannabis industry by Birguid revealed that in 2019, the regional cannabis market was estimated to have generated just over E18.3 billion (US$1-billion) in revenue, with approximately 90 per cent of the revenue generated from the recreational market.


Magagula was not blind to the fact that trade markets and regulations were compromised owing to the outbreak of the COVID-19 pandemic but stated that the country should look beyond the prevailing situation. He said one of the aspects to consider was helping the economy post coronavirus through the cannabis market.


“We are grateful that Parliament actually advertised that we should come and make submissions on cannabis. This shows the seriousness on the part of the executive on the lucrative market of the herb. This is the time we should be moving very fast to get over and done with the legislative framework and penetrate the market,” he said.


Magagula said their estimates on the revenue that the country can bring from the cannabis market annually, is a whopping E22 billion and that could help the country present a practical budget.
Mail and Guardian, a South African publication, reported that the legalisation of cannabis for medicinal purposes within a few Southern African States (Lesotho, South Africa, Zambia and Zimbabwe) has been received with a great deal of enthusiasm.


Sizeably


It said most of these countries’ governments considered that the industry could contribute immensely to their respective economies, through foreign earnings and reduced foreign pharmaceutical expenditure.


“This optimism has stretched to the point of some of the aforementioned nations proclaiming that cannabis exports have the potential to replace commodities such as tobacco which over the years have witnessed a decline in demand.


For these States, cannabis is now thought of as ‘green gold’ and an asset that can be exploited to attract investment, create employment and progress these industries through localised downstream opportunities,” reads the article.


Despite these positives, a major obstacle to the progression is stigma, as confirmed in a recent study on Southern Africa’s cannabis industry. It states that until recently, cannabis has been an illegal substance within the region’s profiled countries (South Africa, Zimbabwe, Lesotho, Malawi, Eswatini and Zambia). The article states that because of this classification, cannabis is a commodity that is traded on the black market and widely used for recreational purposes.


Also mentioned is that most of the cannabis consumed for recreational purposes are smoked, with the remainder being consumed as edibles and vapours. Birguid’s study revealed that, at present, nearly all of the revenues are generated from the recreation segment.


“Strains like Malawi Gold (Malawi), Binga Gold (Zimbabwe), Swazi Gold (eSwatini) and Durban Poison (South Africa) are some of the recreational segment’s best-selling cultivars based on their potency. The aforementioned also sell at a premium and are expected to continue to account for a majority of the industry’s revenues during the forecast (2020-2024),” reads the article.
The study reveals that because most of the cannabis grown on the continent (estimated at 28 000 tonnes per annum according to a UN report) is being consumed recreationally; albeit illegally, a critical first step for growth and progression of the industry is overcoming the negativity associated with it.


It says that going forward it will be important to transition the industry from being a preserve of cannabis enthusiasts.
“Transitioning cannabis into a mainstream industry has already started with the legalisation of cannabis for medicinal and industrial purposes. Another suggestion would be to consider legalising it for recreational purposes”.


Risk


Birguid’s recommendation is that although the cannabis market offers opportunity, stakeholders need to further assess viability of the industry and be aware of issues such as stigma and legislation that could raise the risk of investing within the sector.
“In addition, working together with respective governments and local citizens should also be prioritised to develop respective local markets and sustain demand during the next five years, and particularly over the longer term”.

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