Business / Business News
The national convention on the cannabis industry at the weekend saw one South African company clinch a R600 million deal in a joint venture between two multinational firms.
Cannabis is a multibillion-rand industry in South Africa, said the director of the Cannabis Expo, Silath Howarth, and this deal proved that point.
Canbigold from South Africa, Koomo Capital of the US and Canngea from Australia came together to sign the ground-breaking deal in the Cannabis Convention boardroom.
“For the first time, we have an alliance between three continents taking it all the way from South Africa to Australia and America,” said Canbigold CEO Leon van der Linde. “Cannabis is going to be cultivated and grown by us in Lesotho. The proceeds from that will be exported to Australia to our partners, Canngea. They are a pharmaceutical company based in Sydney.”
Koomo Capital co-founder Vuyani Jones said: “This was a meeting of minds of how we can come together and provide a great solution to patients in need.
“We are really excited that we found the ability to come together and it would not have been possible without the Cannabis Expo.”
Howarth said the deal was a mere drop in the ocean of the potential of the industry, should government loosen up its laws around the sale of cannabis products.
Events such as the Cannabis Expo were becoming essential catalysts for those already in the business.
The first Cannabis Expo was held at Menlyn in Pretoria last year with just 50 exhibitors. A year later the expo, which doubled as a convention with speakers and delegates, boasted 200 exhibitors at the Sandton Convention Centre.
Judging from the array of entrepreneurs at the event from across the trade spectrum, a potential boom for the industry was evident, Howarth suggested.
“It is quite obvious and it is about time that people and government realised that this is not just a drug.”
Speakers and exhibitors at the event repeated the claim that South Africa was on the verge of a cannabis industry boom, if only government would provide a legislative and regulatory framework that would open up the industry.
“It is such a new industry, so it is really hard to pinpoint the exact amount, but certainly it is worth billions of rands, if not billions of dollars,” said Howarth.
Law firm Schindlers, which has been involved in landmark court battles towards the legalisation of cannabis in South Africa, was hopeful that, come September next year, parliament would have made progress in terms of addressing the regulation gaps which could address the growing call for a more cannabis-friendly state.
But the firm’s Andrew Lawrie said it was not simply a matter of declassifying dagga as a schedule 7 drug.
“The scheduling of a drug has wide-reaching consequences for how it is governed … how it is approved and what the requirements will be. You have to consider every effect that it will have. And it links up to about three different Acts,” he said.
“The issue at the moment is that we are trying to fit cannabis into pre-existing laws. It is such a unique product, it’s recreational, it’s medicinal and it’s a crop. It touches on so many different territories. The only real idea for it is to have its own set of regulations. You can’t keep on trying to fit it into an existing framework because existing laws were designed while it was illegal.”
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