The Legal Cannabis market is expected to grow to grow 230% to $32 billion in 2022 as compared to $9.5 in 2017, according to ArcView Market Research and BDS Analytics. Whilst majority of that growth is being spurred by developed markets, such as the United States and Canada. This global growth presents an interesting opportunity for the Emerging Markets – particularly African Companies.
Whilst it is true that Canada is leading the way in the Cannabis Industry, with marijuana legalization being recently voted in. As the industry grows, however, international markets are expanding across the Atlantic to the continent of Africa. This is because in participating North American and European markets, the cost to produce medical cannabis is increasing, prompting buyers to seek premium cannabis from other legalized countries. And coupled with the growing trend of legislation across the African Continent, this provides the optimal production conditions in Africa.
This can already be seen to be taking off in countries in Southern Africa, who have recently legalised marijuana for medicinal reasons. Lesotho became the first country on the continent to issue a medical marijuana license to Verve Dynamics. The South African based company specializes in botanical extracts. Lesotho is an attractive country for companies like Verve because of the black-market cannabis industry that already exists. ‘Lesotho’s farmers have already been growing weed for the consumption at home and across the border in South Africa’. Supreme Cannabis Co, a behemoth in the Cannabis industry, invested $10 Million in Medigrow Lesotho, with the aim of exporting high-quality cannabis oil to Canada and other markets. Canadian investors were also interested in Zimbabwe – a country which already a big tobacco exporter, and has also legalised marijuana.
However, there are serious limitations in the way of successful utilisation of such demand. Firstly, it is a region where religious and cultural beliefs demonise and associate cannabis use with petty crime stifling its appeal. The passing of the 2018 law passed in Zimbabwe, which allows farmers to grow and sell cannabis for medical and research purposes, created a lot of buzz. But that buzz has fallen off due to high licensing costs and uncertainty about the government’s investment in cannabis science.
Demonstrating that for medicinal marijuana to grow as a industry within the continent, Governments have to be committed to establish the infrastructure and legal frameworks to regulate its use. But this will only happen once Africans view cannabis as a source of national revenue rather than petty crime. Furthermore, legalisation has been focused on medicinal rather than recreational use- The United Nations office of drugs and crime (UNODC) in 2015 estimated that about 181.8 million people aged 15-64 years used cannabis for nonmedical purposes, so this ignores a significant market segment.
The market that has the most potential within the African region, is cannabis related products. Many Companies have shown interest in these products – beer brewing giant Constellations Brands Inc. known for its popular Corona beer recently took a $4 billion stake in Canadian marijuana grower Canopy Growth Corp, which makes cannabis-infused drinks and other products. In September 2018, it was revealed that the Coca-Cola Company was in talks with another Canadian firm; Aurora cannabis about developing marijuana-infused beverages with the aim of not intoxicating consumers but to relieve pain. ‘Along with many others in the beverage industry, we are closely watching the growth on non-psychoactive cannabis dual as an ingredient in functional wellness beverages around the world’ Coca-Cola said in a statement. Rob Davies, the country’s trade and industry minister, said the government is assessing South Africa’s potential to become “an active player” in the market for cannabis-related products, according to local media.
The rise of cannabis derived products is exciting as it will involve the majority of African nations. Currently, Southern African has been the epicentre of legal marijuana. However, there has also been a buzz within West African Nations – for example, a country like Nigeria where roughly 15% of the population use cannabis and former President Olusegun Obasanjo controversially called for cannabis to be decriminalised. Ghana is another country which should be of focus, a region with the 3rd highest consumption of Cannabis. The demand in these regions are there, but the cultural stigma around recreational use have stifled reform – regardless maybe the future will see Cannabis Coke.
References –
https://www.cannabisfn.com/mdc/african-cannabis-corp/
https://www.potnetwork.com/news/could-africa-be-next-big-cannabis-market
https://420intel.com/articles/2018/09/13/zimbabwe%E2%80%99s-medical-marijuana-future-uncertain
https://www.bbc.co.uk/news/business-45545233
