Malawi has just followed Zimbabwe in reaffirming an intended agricultural switch from tobacco to cannabis. Both countries are doing so for economic survival as the long-term viability of tobacco is giving way to another crop entirely.
There are several interesting aspects to this trend beyond the transition to greener and more sustainable economies post-COVID. It has long been accepted that the cannabis legalization revolution would start to spread like wildfire once there were a couple of regions or countries that took the plunge. This phenomenon can be clearly seen within the domestic United States as more and more states move towards legalizing both medical and recreational use of the drug. While it is a mantra also repeated by those who wish to stymie reform, there is little anyone can do to stop what appears to be an escalating global trend.
Recently, however, as of the last month, this phenomenon is going global and involving whole regions. In Central America, for example, both Honduras and Nicaragua just declared their interest in at least examining cannabis cultivation within a matter of weeks.
So have Zimbabwe and Malawi.
In Africa, this is far more interesting just because of viability—as well as the momentum South Africa is clearly creating throughout the region, if not the entire continent. By declaring that cannabis is an important tool of economic development, they are clearly upping the stakes. In South Africa, officials have begun planning work on a so-called “cannabis hub” that will focus on everything from medical cultivation to phytoremediation. That is clearly influencing other countries regionally.
Both Malawi and Zimbabwe first announced that they were beginning to move from tobacco to cannabis cultivation during the pandemic. Now, such intent seems to be kicking into higher gear in both countries, as South Africa initiates a global call for participants in their ambitious project.
Like Zimbabwe, Malawi earns the vast majority of its foreign income from tobacco—in the case of the latter, contributing to over 60% of its economy. According to President Lazarus Chakwera, cannabis could be just the “exit strategy” from tobacco that the country needs.
The country does not border either South Africa or Zimbabwe but sits just north of them and shares a common border with Mozambique (where cannabis is still illegal).
What this Means Regionally and Globally
The fact that cannabis reform is being increasingly touted as a form of development as well as foreign investment in multiple countries in Africa at this point (see also Morocco) is an interesting twist for several reasons beyond the issue of reform itself.
The first is that geopolitically, this strategic focus will attract more Western than Chinese capital. China has been a huge investor in the African continent for much of this century, investing in roads and other major infrastructure desperately needed here. Yet cannabis reform is clearly off the political table in China proper. While the country remains the world’s largest producer of hemp, it remains a crime to even possess hemp seeds on an individual basis. Southern Africa’s new interest in cannabis, for this reason, is unlikely to attract Chinese interest—but it certainly is garnering a lot of attention in the West.
Beyond geopolitical issues, the reality remains that the consumption of cannabis is growing globally—and for industrial, medical, and recreational purposes. Yet, as seen clearly in Europe, the expense of the regulated market is still contributing to high prices that both insurers and consumers don’t want to pay. A strong African cannabis market will play a huge role in bringing down this cost—just as it did for tobacco.
This does not, of course, mean that this new focus is a panacea—in Africa, South or Central America—or even western countries like Greece who have had the same idea.
However, what this new interest in cannabis as a form of both economic development if not environmental remediation seems to signify is that the world is moving towards legalization because of an inevitability that now cannot be held back or stopped.
It is also a clear sign that the era of Prohibition is crumbling—and not just country by country, but now by regions.
In the last few years, the trend in Africa has been to legalize cannabis for medical purposes and open international cannabis export industries. The most recent countries to join the African green rush are Uganda, Rwanda, Ghana, and hopefully Morocco.
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Lesotho and the start of the African green rush
The African green rush started with Lesotho in 2017, when the government legalized the cultivation and production of medical cannabis for exportation, the first in Africa to do so. The first companies to jump on the opportunity were Canadian, with several licenses given out to Canadian companies by 2018.
Lesotho is a poor African country which is enclaved in South Africa. About 80% subsist on farming, however, draughts and mountainous areas have made it hard to grow many crops. Cannabis is not one of them, which makes it preferable for farming. The country also generates revenue off of livestock, diamond mining, and water. As of 2017, approximately 57% were living under the poverty line, with half the population unemployed. HIV is a huge problem in the small country, with somewhere in the neighborhood of 23% being infected.
In the very beginning, Lesotho gave out licenses for free which enabled local farmers to obtain them. It didn’t take long for the price of licensing to go up to $37,000, essentially ruling out local participation. Fast-forward to August 2020 and it’s not the smooth operation that had been hoped for. There has been questioning into how the licenses have been distributed, with Lesotho’s king Letsie III warning the Ministry of Health about the industry being threatened by corruption. One license holder even gave up on the industry after not being able to secure investors because of Lesotho’s poor regulation.
Zimbabwe and Zambia
Zimbabwe was the second country to join the African green rush. In 2018, the government of Zimbabwe legalized the cultivation of cannabis for medicinal, export, and research purposes. One year later the law was amended to allow the cultivation of industrial hemp as well. Licenses for growing cannabis in Zimbabwe are approximately $40,000, along with annual return fees of $15,000, and renewal fees of $20,000. Research fees are $5,000 if applicable to a company, with a renewal fee of $2,500. These prices were the prices established at the beginning of the market.
Zimbabwe has also had some bad financial issues, much of it related to land reform issues due to problems between black and white farmers stemming from a shared ancestry in the Colony of Southern Rhodesia. In an effort to redistribute land, many white farmers were ousted, which meant a drop in crop outputs like cotton, tobacco, wheat, and coffee. Prior to the medical legalization, cannabis was illegal in every capacity, and is still illegal for recreational use and medical use today. Citizens of the country can’t access a medical system, much like in Lesotho.
Zambia was next to fall, changing its legislation in December, 2019. The government unanimously approved a bill to legalize the cultivation and exportation of medicinal marijuana. Licensing for cultivation is regulated by the Ministry of Health, and cultivation operations are monitored by the Zambia National Service. Licenses at the time of approval were set at $250,000, also an exorbitant amount for a local farmer in a poor country to pay.
Is Zambia poor? Sure is. Zambia is known for copper and the exportation of metals and minerals. Agriculture is also big, along with tourism as Zambia is home to Victoria Falls. Prior to 2018, approximately $8.4 billion was being added to Zambia’s national debt every year, going up to closer to $10.5 billion since 2018. Much like the other countries mentioned, Zambia is illegal for recreational cannabis use, and hasn’t established a medical program for its own citizens, instead only using the industry for exportation.
Malawi and South Africa
2019 was also the year that the first South African license was awarded for commercial production of cannabis in South Africa. The license went to Afriplex Ltd. working together with House of Hemp. South Africa is a little different than the previous countries mentioned in that it actually does have lax cannabis laws for citizens, decriminalizing personal cannabis use, possession, and cultivation in a 2018 Constitutional Court ruling. Medical cannabis was legalized in 2017, along with the ability for a global import/export medical cannabis market.
At the end of June 2020 it was reported that Afriplex was not only the only licensed producer in South Africa, but was in the process of readying the first export of locally-cultivated cannabis. A different report from October 2019 states that, in fact, Polkadraai Strawberry Farm was the first company to gain licensing to grow cannabis for medical exports in South Africa, given out by the South African Health Products Regulatory Authority. According to the report, the company was cleared to produce 20 tons of cannabis flowers in the company’s 46 thousand square meter production facility. Either way you look at it, the market has been moving slowly, but is starting to pick up pace.
Then there’s Malawi, another impoverished African country, with the majority of the population working in agriculture on subsistence farms, with larger, richer farmers growing coffee and tobacco on big plantations. This has led to massive wealth inequalities, with the majority of the population living in extreme poverty, characterized by widespread and chronic malnutrition, high infant mortality rates, and general sickness.
In February 2020, Malawi’s parliament signed off on a bill to legalize medical and industrial cannabis production, and even outlined certain specifications for a domestic market for citizens. This makes it a step up from other countries like Lesotho and Zambia which didn’t specify information for domestic markets, essentially leaving their own citizens out (or at least until a market is established…which doesn’t have to happen). In terms of the business end, the bill established a Cannabis Regulatory Authority, instituted a 1% cap on THC in hemp, and set up rules for cultivation and exportation.
Morocco is interesting for two reasons. The first is that it’s the largest illegal exporter of cannabis resins globally, dwarfing any legal industry with an output of approximately one million kilos of hash a year, worth about €8 million. This puts it at a massive advantage with legalization in that it has the ability to take over the medical export industry, particularly to Europe, and to be the prime exporter of the African green rush countries. Assuming the illegal industry can be converted into a well-functioning legal market, Morocco holds an interesting position in its ability to divert a massive income stream, and take it.
The second interesting thing about Morocco is that as of yet, the regulations set out for cultivation and production specify laws that protect local farmers, even requiring prospective growers and producers to be Moroccan citizens. The bill, announced on February 25th, 2021, is scheduled to be voted on next week, and aims to develop cooperatives where farmers can cultivate crops for sale to international companies.
How much the bill covers a domestic medicinal market is hard to say at the moment, and will become clearer assuming it passes (though it currently has no obstacles). The hope would be that a country forward-thinking enough to empower its own farmers, will also allow medications for its own citizens.
New additions: Uganda, Rwanda, Ghana
In Uganda, cannabis is still illegal, however, in January 2020, the Ugandan Health Minister approved the exportation of cannabis for medical purposes, along with 15 general guidelines, one of them being that prospective exporters cannot take part in deals worth less than $5 million. The weird part about this is that there was a company already exporting out of Uganda for several years.
Private company Industrial Hemp Uganda Ltd has been working with Industrial Globus Pharma Uganda Ltd, a subsidiary of Israeli company Together Pharma, since 2017, growing medical cannabis for export to Germany and Canada. Whatever deal was in place to allow this to happen outside proper legislation became moot by the law passing, though Industrial Hemp Uganda will now have some stiff competition.
Yet another country to legalize strictly for export is Rwanda. In October 2020, Rwanda legalized the cultivation and production of medical cannabis, but strictly as an export, as in, no right for citizens to use these medicines. The law specifically states it will not change the strict laws in place for citizens, which can mean two years in jail for possession and use crimes, while sale, supply and trafficking crimes can mean 20 years to life in prison. In the same month it legalized production for medical exportation, the country approved its first four applications for licenses.
The last new addition is Ghana. In March 2020, Ghana’s parliament approved the Narcotics Control Commission Bill, which legalizes the cultivation and use of cannabis for medical and industrial purposes. The caveat to this bill is that it only applies to low-THC hemp, with .3% THC or less. Said the president of the Hemp Association of Ghana – Nana Kwaku Agyemang:
“We are not promoting smoking, we are promoting the industry, we are promoting cleaning up the environment, we are promoting creating a new revenue stream for government in terms of taxing from cultivation and export and we are talking about promoting medicines that are far better than opioids, medicines that cannot kill you because no one has died from taking cannabis.”
As 2021 really gets going, Africa reinforces its stance as a force to be reckoned with in the field of global medical marijuana production. Just imagine the power of the region if the majority of countries were in on it? It could dwarf the outputs of other nations, other entire continents. The unfortunate aspect is that these laws most of the time are not helping local citizens. Many are not providing citizens access to medicines, and most are setting impossibly high licensing costs that a poor farmer could never afford. So, while Africa gears up to be a leading cannabis producer, in many countries it still seems to be at the cost of its own citizens.
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BLANTYRE, Malawi — Malawi has legalized the cultivation of cannabis as the country seeks an alternative to tobacco, its main earner of foreign exchange which is under pressure from anti-smoking campaigns. Parliament on Thursday passed the bill to allow cultivation for medicinal and industrial uses. “Legalization of this crop will contribute to economic growth as […]