The president of Zimbabwe on Wednesday reportedly commissioned a farm and processing plant for medical cannabis cultivation worth $27 million.
Business Insider reports that President Emmerson Mnangagwa “commissioned the medical cannabis farm, and processing plant at Mount Hampden set up by Swiss Bioceuticals Limited in West Province, Zimbabwe…to produce cannabis (mbanje or dagga) for medical and scientific purposes,” saying in a speech that “the rapid development of the processing plant, which adds significant value to the crop, was a testimony of the success of the Government’s engagement policy and the confidence Swiss companies and investors had in Zimbabwe and its economy.”
“This milestone is a testimony of the successes of my Government’s Engagement and Re-engagement Policy. It further demonstrates the confidence that Swiss companies have in our economy through their continued investment in Zimbabwe. I extend my profound congratulations to the Swiss Bioceuticals Limited for this timely investment in the medicinal cannabis farm, processing plant and value chain, worth US$27 million,” Mnangagwa said in a speech on Wednesday, as quoted by Business Insider.
Business Insiderreported that the president “added that the investors should follow the company’s lead and open their business to support the mantra that ‘Zimbabwe is Open for Business and be ready to generate foreign currency generation for the country.”
The announcement of the farm comes nearly three years after the country did away with its laws banning the cultivation of cannabis as it looked to produce a new crop to export. A year before that, in 2018, the country legalized medical cannabis.
The repeal of the ban is part of a concerted effort by Zimbabwe to pivot from its longtime major exporter, tobacco, of which it is the leading producer on the continent.
In reporting on the repeal of the cannabis ban in 2019, Bloomberg noted that the country was seeking “to boost export revenue and offset the global campaign against tobacco, a major source of foreign currency,” with Zimbabwe officials saying at the time that it would initially be focused on hemp and medicinal cannabis.
Earlier this week, Reuters detailed the country’s still-young medical cannabis industry and how farmers there have adapted.
Reuters, citing Barclays analysts, reported that the “global cannabis industry could be worth $272 billion by 2028,” and that “Zimbabwe’s Finance Minister Mthuli Ncube has said the country wants at least $1 billion of that—more than it currently makes from its top agricultural export tobacco.”
Reuters spotlighted a 35-year-old Zimbabwean grower named Munyaradzi Nyanungo, who has been issued one of the 57 cannabis operating licenses in the country.
“We stand to sell cannabis at $25 per kilogramme, which is five, six times more than what a good tobacco crop can give you. We are actually sitting on a green gold mine,” Nyanungo told Reuters.
Nyanungo has a U.S.-based partner in “King Kong Organics, which supplies seed and other inputs, purchased the greenhouses under an off-take agreement that will see the company buying the cannabis crop for processing.”
On Wednesday, Mnangagwa, the country’s president, “also urged other investors with permits to quickly operationalize their permits and licenses for the benefit of the economy in general and people in particular,” according to Business Insider.
“I challenge other players within the medicinal cannabis sub-sector to speedily set up their enterprises, focusing on value addition and beneficiation. It is disappointing that since 2018, only 15 out of the 57 entities issued with cannabis operating [licenses] have been operational,” Mnangagwa said, as quoted by Business Insider.
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 Zimbabwe, tobacco exports brought the country $794 million in 2020, down from a high of $927 million in 2016. Tobacco is the country’s third most valuable export crop after gold and nickel matte. That said, it is also facing a rather existential threat as the industry faces challenges brought about by COVID, a drought and a shift in production heading for South Africa.
In contrast, authorities are already planning for cannabis to be the country’s largest cash crop with earnings well over a billion dollars within the next five years. Last year, the country exported 30 tons of industrial hemp to Switzerland with another 20 tons due to be exported this year.
Tobacco farmers are now being encouraged to switch to cannabis. The hope is that at least a quarter of their income is derived from cannabis sales in just the next three years.
57 companies have now received their licenses from the Zimbabwean government to grow cannabis.
A Change for Black Farmers?
One of the biggest problems Black farmers face in Zimbabwe in the current market, no matter what they cultivate, is that smaller farmers are being consistently squeezed by intermediaries who are the only chance they have to get their wares to market.
Since 2000, Black farmers have taken over former white farms after Robert Mugabe’s supporters seized white-owned plantations. This temporarily brought the tobacco farming industry in the country to a standstill. However, since 2008, the industry has recovered.
The problem that the vast majority of farmers in Zimbabwe still face, however, is access to the global market as well as capital and supplies necessary to plant and harvest their crops. Many smaller farmers are struggling to make a living in an environment where they must go into debt for seed, fertilizer, and equipment to plant and harvest their crops with contracted sellers who also literally pay pennies on the dollar for crops they sell at auction bound mostly for China.
This infrastructure was created when banks pulled out of the sector because the government has never formally transferred the land it seized from the previous owners to the farmers who currently plant crops on this land. The contracted sellers, often financed with Chinese funds, are able to get top dollar for the crops, but they pay farmers next to nothing.
While many farmers have been released from their obligations under this scheme on the tobacco side of the equation, there is nothing currently to suggest that a cannabis cultivation scheme would not create exactly the same problem.
Social Equity Still Scarce in Global Cannabis Industry
The terrible reality that still exists, globally, in the cannabis industry, is that no matter how lucrative it can be for a small minority of firms, most of these are founded and run by white people. Even in nations like the US and Canada, about 10% of executives are non-white. Indeed, according to recent data, both women and ethnic minorities continue to lose ground in the legitimizing industry globally.
In the developing world, the problem is even starker in large part because of historical inequities and the general unavailability of even loans to establish certified plantations.
This means that unless this problem is rectified, no matter how much focus governments put on cannabis cultivation and production as an “economic development tool,” the vast majority of such economic development, if not sales, will still go to a small (and mostly white, male) minority.
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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Morocco looks to be the next country to join the African green rush. With a bill up for approval next week in parliament, Morocco hopes to give itself an economic push with this new legislation to legalize medical cannabis.Considering how much it already exports illegally, this legalization could really shake up the global medical cannabis industry.
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Morocco and cannabis
Morocco is a 100% cannabis illegal country at the moment. Morocco’s Criminal Code states that offenders may be placed in treatment facilities, rather than go to prison, that assets can be taken away from offenders, and that possession may incur punishment. Use crimes can incur up to about 10 years in prison, though most do not receive such a sentence.
The sale of cannabis is illegal in Morocco, but the drug is ubiquitous, and used frequently. Sold illegally as hashish under the name ‘kif’, it can be found quite easily in most big cities, with Chefchaouen, in the Rif region being the unofficial ‘capital of kif’. It is often smoked out of a hooka. Cultivation is illegal, and offenders face both prison time and fines. Trafficking is also predictably illegal with punishments of up to 30 years in prison and €60,000 in fines. Industrial hemp is illegal to grow.
Medical cannabis is currently illegal in Morocco, though this could change soon. Most of the push for a change here has to do with economic recovery. Since 2013, different political parties have pushed for legislation to either legalize a medicinal industry, or decriminalize the whole hash industry altogether. In 2014, an entire legalization bill was put forth by the opposition party in parliament, though it was never approved.
As far as CBD, since Morocco does not differentiate between CBD and the rest of the plant, CBD products are not legal in Morocco either. However, it should be remembered that Morocco is a signee of both the Single Convention on Narcotic Substances, and the Convention on Psychotropic substances, and that cannabis was just cleared for medical use by a recent vote to remove cannabis from schedule IV of the Single Convention treaty.
Is Morocco really the biggest cannabis exporter?
Morocco is quite possibly the biggest cannabis exporter, but certainly not legally! When looking at legal exports of cannabis oil, for example, Morocco is not that high on the list. According to worldstopexports.com, Morocco came in 14th place for cannabis oil exports in 2019, however, it was also noted that Morocco increased its exports of cannabis oils by 218.1% since 2015, which is a pretty solid increase on the legal front.
This doesn’t count for illegal exports though, and when it comes to illegal exports, Morocco seems to be #1. Both the #1 illegal supplier to Europe, and the #1 exporter globally of cannabis resins. According to a 2019 article by BBC Arabic, one million kilograms of hash is produced yearly in Morocco, with a value of approximately €8 billion.
Roughly one million people survive off this illegal industry. It is estimated by the UN Office on Drugs and Crime that in 2017, Morocco globally supplied about 36,000 tons of cannabis, mostly as resin. The same report estimated that Mexico – another large illegal cannabis exporter – had supplied as little as 5,000 tons in comparison.
Not only does Morocco continue to export massive amounts of cannabis, but the potency of the resin produced has steadily increased since 2009, according to the EMCDDA (European Monitoring Centre for Drugs and Drug Addiction), in its 2019 European Drug Report. This indicates that Moroccan black market cannabis growers have been improving on production techniques, and using higher-potency cannabis strains.
How can the size of an illegal black market be gauged? One way is by looking at arrests and seizures of products. A massive 27.3 tons of illegal cannabis was seized by Moroccan police in July 2019, making for a global record. In 2017, 400 tons of cannabis was seized altogether. This number surpassed seizures from any other African country, and came close to matching all resin seizures from the entirety of Europe.
What does this industry mean to Morocco? When an entire million people are subsisting off an industry in a country of 37 million people, it’s a pretty big deal. The majority of cannabis farming takes place across the north of the country, with the epicenter being the Rif mountains. Since cannabis farming is illegal, journalists are not welcome, and foreigners with cameras are likely to get chased out of the area. Farmers fear the wrath of both traffickers they deal with, and government entities, for communicating with the press.
The Rif region has been the site of protests, mostly based around socioeconomic disparities. Cannabis farmers have protested arrest warrants against growers and demanded annulments of these warrants. Issues concerning drinking water scarcity have also come up, with cannabis growers having a harder time voicing concerns due to fears of being shut down. Due to the general lack of infrastructure and options, local farmers are constantly stuck between a rock and a hard place, in fear of incarceration on one end, and in fear of the traffickers with whom they do business on the other. And no other avenues to earn an income.
Morocco and a new medical cannabis industry
With economic issues to consider – some stemming from the Covid pandemic, and a desire to recoup lost revenue due to illegal markets, Morocco is ready to legalize medical cannabis. On February 25th, 2021, the Moroccan government announced a new bill which would legalize cannabis for production, exportation, and farming for industrial and therapeutic purposes. Parliament is expected to pass the bill next week, and there don’t seem to be obstacles in the way of this. The draft legislation aims to create ‘cooperatives’ where farmers can cultivate their crops and then sell them to international companies for processing.
The draft bill estimated Morocco’s illicit cannabis market to be twice as big as the $8 billion+ approximated by the UN, and estimates that profits are closer to $15 billion. The government estimated that in the current situation, farmers receive about one half billion, while literally $14.5 billion goes to traffickers and organized crime groups.
A leaked version of the draft legislation indicates it is meant to help local farmers and shows there is no intention for mass production of cannabis throughout Morocco, but rather for it to be kept in six locations within the Rif mountains territory. According to the bill, farmers will be required to gain an authorization, live in the correct region, be of legal age, and have Moroccan citizenship.
Like most bills of its kind, it also proposes an agency to oversee regulation of the industry. This would be the National Agency for the Regulation of Indian Hemp Activities. Only Moroccan registered companies would be able to apply for import, export, and marketing licenses. It is expected that all details will be released assuming the bill passes next week.
This bill comes on the heels of Morocco’s vote in the UN Commission on Narcotic Drugs to remove cannabis from Schedule IV, making it legal for medical use. It also comes at a time when the legal European medical cannabis industry is booming, with imports in 2019 in the neighborhood of €230-€280 million, which Morocco completely missed out on. Canada is positioning itself to be a top supplier for European legal cannabis imports, but a change in Moroccan law can certainly throw a wrench into this current trajectory.
Even just capturing the German market would be massive. The German market is the biggest in Europe, with Germany importing nearly 10,000 kilos of cannabis in 2020 alone. Being the main supplier for this kind of market is a coveted position, and it might very well be a showdown between Canada and Morocco to win supply deals in Germany, and the rest of the growing European market.
Africa is a continent that has seen a lot of rapidly changing laws when it comes to cannabis, often constituting entire reversals of policy done very quickly to enter into the global medical cannabis market. Assuming the bill in Morocco passes next week, it will join Lesotho, Zambia, Zimbabwe, Malawi, South Africa, and other African nations which have already legalized medical cannabis. And given its massive cannabis cultivation and exportation ability, Morocco stands to be one of the countries to gain most from the new trend of medical cannabis legalization.
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Company secures 10-hectare piece of land at prison for high security. Zimbabwe‘s government has approved plans for the country’s first cannabis farm and production plant. The project will reportedly begin at the Zimbabwe Prisons and Correctional Services’ Buffalo Range prison in Chiredzi, CAJ News reports. Ivory Medical, a Harare-based company, has secured a 10-hectare piece of land at the prison because of the high security it will offer the project. – Read the entire article…