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|GDP (US$ t)||1.6|
|Total Healthcare Expenditure (US$ b, est.)||140|
|Annual prevalence rates of cannabis use||13.2%|
|Estimated medicinal cannabis market value, 2023 (US$ b)||0.8|
|Source: World Bank/ UNODC/ Prohibition partners|
The socioeconomic effect of legalising cannabis would lead to lower government expenditure on law enforcement coupled with increased tax revenue, according to a thesis by Vladislav Lakcevic, an analytical strategy development professional who specialises in economic studies in Africa.
More than 10,000 tons of cannabis are produced on the continent each year, according to a UN survey, which advocates believe could be worth billions of dollars in a rapidly expanding global market for legal weed.
The pharmaceuticals market in Africa is expected to reach a business opportunity of $45b in 2020, and according to Nathan Emery, CEO of Precision Cannabis Therapeutics Zimbabwe (PCT – Z), cannabis as a medicine is highly accepted in Southern and Eastern Africa and its medicinal use will spread rapidly if it shows proof of its success for treatment.
Annual prevalence rates of cannabis use (13.2%) in Africa fixes the region as having one of the highest consumption rates in the world.
African governments have not yet followed the trend of legalization seen in Europe and the Americas, however in 2017, Lesotho became the continent’s first country to offer legal licenses to grow cannabis. As of March 2019, five companies in Lesotho were awarded licences to produce medical cannabis, including MediKingdom Ltd being the first to be officially awarded in May 2017, Medigrow (2017) and Verve Dynamics (2017) and Daddy-Cann. The Kingdom of Lesotho is an enclave of South Africa and can act as a cultivation and production hub for South African pharmacies. Both South Africa and Lesotho are members of the South African Customs Union (“SACU”), which aims to maintain the free interchange of goods between member countries. Lesotho has also signed numerous international trade agreements permitting the unencumbered export of Cannabis products to various jurisdictions worldwide.
Zimbabwe has become the second country in Africa to legalize growing cannabis for medicinal and research purposes in April 2018.
As of February 2019, more than 200 foreign and local investors had expressed an interest in becoming producers of medicinal cannabis, the Zimbabwean government has approved 37 of them.
In March 2017, the Medical Controls Council (MCC) has released its medical cannabis guidelines for the cultivation, production and use of medical cannabis. In February 2018, the SAHPRA board replaced the MCC. In addition to the licence application to SAHPRA, applicants wishing to manufacture products for therapeutic purposes containing THC must also apply to the director general of health for a permit under Section 22A(9)(a)(i) of the Medicines Act.
There are currently 5 types of licenses:
- cultivate/grow and produce cannabis and cannabis resin;
- extract and test cannabis, cannabis resin and/or cannabinoids;
- manufacture a cannabis-containing or cannabinoid-containing medicine;
- import a cannabis-containing medicine;
- export a cannabis-containing medicine; or distribute a cannabis-containing medicine.
On September 18th, 2018, South Africa’s Constitutional Court unanimously voted to legalize adult Cannabis consumption, as well as the cultivation of Cannabis for private consumption. South Africa’s Parliament is expected to amend the laws that criminalize cannabis following the Constitutional Court’s ruling within 24 months.
Nigeria could be a key country for medical cannabis due to its heavy reliance on imported pharmaceuticals. According to an UNIDO (United Nations Industrial Development Organisation) survey, the country has about 120 local drug manufacturers and a manufacturing sector capacity severely underutilised at only 40%. Euromonitor reports found that Nigeria was one of the largest personal care and beauty markets in the continent in 2012, valued at $2b.
Morocco is described as an “emerging player” in the global pharmaceutical market due to key factors such as its location and political stability. The parliamentary constitutional monarchy boasts both multinational pharmaceutical companies and domestic enterprise operations and manufacturing. The Moroccan government has introduced an ambitious health insurance programme which aims to cover 90% of the population by 2021.
Cannabis Business Activities:
- Medi Kingdom, Africa’s first legal cannabis licence holder, exported just 825 grams of cannabis in 2018 but expects to produce one tonne of medical cannabis per month by the end of 2019. The product is destined for the export market until medicinal cannabis is legalised in Lesotho.
- In February 2018, Canadian firm Tilray began exporting medical cannabis extract to South Africa in partnership with local biotechnology firm BGM Pharmaceuticals. The products will be distributed nationwide to pharmacies to patients who qualify.
- In March 2018, Canadian company Supreme invested US$10m in a 10% stake in Medigrow Lesotho.
- In May 2018, Canadian company Canopy Growth Corporation announced the acquisition of Daddy Cann Lesotho.
- In June 2018, Canadian cannabis company Aphria formed a US$3.13m joint venture with the Verve Group Lesotho.
Assuming there is wholesale legalisation and regulation of the cannabis industry, Prohibition Partners calculates that South Africa and Nigeria potentially represent the region’s two largest value markets going forward to 2023 and beyond.
In the African Cannabis Report – produced by London-based advisory group Prohibition Partners – Africa’s cannabis market is estimated to be worth up to $7.1b by 2023.
Continue at: https://cannabusinessplans.com/africa-cannabis-market/
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