You are here
Home > News > South African State of Gauteng to Build Country’s First Cannabis Hub

South African State of Gauteng to Build Country’s First Cannabis Hub

One region in the world is pressing ahead with cannabis reform despite the delays and excuses being made. South Africa’s president, Cyril Ramaphosa just declared in his recent state of the union address that the country was moving forward, finally, to regulate the industry, create jobs, and create much needed income for the country.

Now comes the news that this country is moving to create a multibillion dollar cannabis “hub” in Gauteng. David Makhura stated that the Vaal River Project would feature a green hydrogen innovation center, an Aerodrome, an Aerotropolis, and a Steel Manufacturing Sector. Four municipalities have voluntarily made their land available for the creation of a Special Economic Zone.

It is even more fascinating to note that other indications have suggested this region, well-known for its rich gold mines has also been exploring cannabis for environmental remediation.

This doesn’t sound like the authorities will be waiting around to move things forward. The South African government clearly sees cannabis as an economic competitive advantage for their country over the next few years.

Moving the Pending Legislation Forward

The Cannabis For Private Purposes Bill, which is moving ahead in Parliament at a faster pace, is now being considered. The bill was originally introduced on September 2020, but has been delayed by COVID as well as bickering over the details. The draft bill, as it stands, states that an adult could possess cannabis for private use. These individuals can also have a small number of cannabis plants and cultivate them in their own private space. If found with marijuana in public, they will not be prosecuted if the amount is allowed by law.

The bill has come under fire for being too burdensome on poor people who lack privacy. However, due to all the support from political elites, it will likely move forward.

This raises the question of where cannabis clubs will be left. The bill’s passage will indicate that South Africa is on track to pass legislation in 2023 and to have projects in the pipeline for the future.

The Implications of the Impact

For many reasons, the South African cannabis debate is fascinating.

This is because the first reason that these exported crops are important to a continent and country looking for new opportunities in 21st-century life. 

This is just the geopolitical twist. Chinese investments have been focused on roads and infrastructure in Africa. This leaves Africa without the possibility of Chinese investment due to the state of the China cannabis debate. This means that Africa could be the place where Chinese, American and Canadian money comes together to build sustainable infrastructure that is cannabis-related.

However, the impact all of these things will have on the future is not yet known. It will also have a significant impact on countries outside Africa. Because it is less expensive than domestically growing cannabis, Germany and Israel are among the first to rush to acquire African-grown, medically certified marijuana. All of this is possible because African cannabis growers are willing and able to match the German price for German cannabis. German cannabis producers won’t be able to maintain their price advantage and all other producers (including those from Portugal, Greece and Columbia) will need to drop prices in order to compete. This means there will be price pressure not just on the German/Canadian firms that won the first German cultivation bid but also the Dutch Bedrocan across the border.

This is good news for Europe’s current medical reform issue. It also encourages the industry lower prices and helps insurers get approvals. Insurance companies are currently fighting for their rights, even when doctors prescribe cannabis. It is an interesting twist, which will undoubtedly play out over the coming years in Europe.

African cannabis is certainly a game-changer for all of that — in addition to the significant impact it will also have locally.