Government risks missing out on R30 billion opportunity

The Department of Trade, Industry and Competition (DTIC) expects to finalise the commercialisation of cannabis policy and legislation by the end of the 2026/27 financial year. 

DTIC Minister Parks Tau revealed this in a written response to questions posed to him by MP Roger Chance.

South Africa has made significant strides in cannabis legislation, legalising medicinal marijuana in 2017, decriminalising private use in 2018, and publishing a National Cannabis Master Plan in 2021.

The draft National Cannabis Master Plan serves as the basis for developing policy and legislation to regulate cannabis for commercial purposes, envisioning the creation of over 100,000 jobs and adding approximately R30 billion to the economy.

The President has consistently referred to such a plan in his State of the Nation Addresses over the years.

In May 2024, President Cyril Ramaphosa signed the Cannabis for Private Purposes Act, establishing a legal framework for private use and cultivation, positioning South Africa as a trailblazer on the continent in this regard.

However, the Act still imposes significant restrictions on the legal cultivation and commercial trade of cannabis, leaving the illicit market to continue to bloom and the Masterplan as just a piece of paper.

As Wandile Sihlobo, Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz), wrote on this topic earlier this year.

He argued that South Africa has “been slow in providing a new and clear regulatory path for this plant, and the licensing price has been somewhat prohibitive for some people.”

As a result, many in the industry have been hindered mainly by limited funding, complicated and expensive regulatory processes, and inconsistent regulatory reforms.

While “South Africa positions cannabis reform as a long-term development objective, thousands of growers, patients, and entrepreneurs face daily criminalisation, regulatory exclusion, and economic marginalisation,” said Charl Botha from legal firm H3 Legal Solutions.

While commending the department’s transparency, Botha contends that the response “reveals a deeper systemic contradiction that demands immediate correction… Cannabis is legal in principle but criminalised in practice.”

Five areas requiring intervention

H3 Legal Solutions outlined urgent reforms it believes the government must address to clarify contradictions and delays in South Africa’s cannabis policy, warning that communities continue to suffer due to “legislative paralysis”.

The minister’s position indicates that legal trade awaits the finalisation of the Cannabis for Private Purposes Act (CfPPA) regulations and delisting from the Drugs and Drug Trafficking Act, with an estimated timeline of FY 2026/27.

Botha points out that this implies a nine-year gap between the landmark 2018 Prince ruling and any lawful commercial access.

During this prolonged period, he said, “communities are criminalised by default, without legal pathways or transitional protections”.

The moratorium on cannabis-related arrests “remains ineffectively enforced, as SAPS continues to arrest cultivators, traders, and traditional healers”.

H3 Legal Solutions called for the government to issue a public SAPS directive reaffirming the moratorium with clear application guidelines and introduce interim exemptions or pilot regulations to enable transitional legal supply chains.

Tau said internal policy work has begun, with broader consultations to follow.

He stated that “it is the intention” to support cannabis commercialisation once it is removed from the Drugs Act, but stressed public health remains a priority.

“The commercialisation of cannabis products for human consumption must occur in an environment that protects the health of South Africans,” he said.

“So, there is no contradiction between the current legislative framework and the National Cannabis Master Plan,” he added.

However, Botha said that despite the Minister’s assertion, he argues the inconsistency is “evident.”

“The Master Plan promotes commercialisation, yet the Drugs Act continues to criminalise all non-private cannabis activity.” This conflict “undermines policy credibility and deters investment,” said Botha.

H3 Legal Solutions also criticises the current system, stating “SAHPRA pathways are cost-prohibitive, inaccessible, and tailored to pharmaceutical corporates.”

Consequently, “traditional growers, cooperatives, and smallholders have no feasible entry point”. The letter condemns the exclusion of the “informal sector, responsible for sustaining cannabis cultivation for decades”.

The firm urges tiered licensing for small-scale operators and Cannabis Inclusion Zones to protect landrace IP.

They also argue the moratorium “has not been formally published, operationalised, or upheld across all provinces”, and call for its publication, NPA de-prioritisation of cannabis cases, and finalised possession thresholds.

Finally, they warn that the “delay in zoning policy has already resulted in the contamination of local cannabis landraces through uncontrolled importation and unregulated crossbreeding”.

They call for Cannabis Cultural Heritage Zones, community-run seedbanks, and legal protection for traditional knowledge.

“Policy must stop being aspirational and start being operational”. “We do not need another plan. We need immediate action,” said Botha.

Going forward

In the meantime, Tau said that the DTIC will support cannabis/hemp product manufacturing through existing incentives.

For medicinal cannabis manufacturing, applications must meet a published checklist to be considered, and the SABS has released two hemp and cannabis standards for public comment.

Sihlobo wrote that if long-promised regulatory adjustments come to fruition, and the country learns from international missteps, South Africa can create a thriving industry that supports rural communities, drives investment, and positions the country as a leader in cannabis production.

“When we finally progress with regulations, I still believe that cannabis could be a catalyst for revitalising rural communities that are economically marginalised and excluded from the agriculture value chains.”

With that said, the Agbiz Chief Economist emphasises that the country needs to consider practical ways to ensure that production and value chains do not mainly develop in areas that have always been the leading agricultural zones and urban areas with better access to investment.

“The communities of the Mpondoland region of the Eastern Cape have been growing this plant in the shadows of the law for many years and should benefit from its liberalisation.”

“But, does the government have a clear plan for mobilising investment and value chain development in these regions?” asked Sihlobo.