Introduction
Plant Improvement Act Regulations and plant breeders' rights
Medicinal cannabis
Traditional cannabis growers
Comment
In August 2021, the Department of Agriculture, Land Reform and Rural Development (DALRRD) unveiled its cannabis master plan to commercialise and industrialise cannabis in South Africa. In addition, the Cannabis for Private Purposes Bill was presented to Parliament on 8 March 2022 (for further details, see "South African cannabis industry set to take off"). Although it was hoped that the bill would be passed relatively quickly, this has not happened yet. There have, however, been some interesting developments in the sector.
Plant Improvement Act Regulations and plant breeders' rights
A significant development in the sector is the declaration published in the 20 May 2022 Government Gazette by the minister of DALRRD that included various hemp varieties as protectable varieties in terms of the Plant Breeder's Rights Act 15 1976. This was quickly followed by publication on 10 June 2022 in the Government Gazette of the new Regulations relating to the Plant Improvement Act 11 2018 that include guidelines and permit requirements for breeding for research, sale of material, cultivation and expert of hemp varieties in South Africa.
These legislative developments are set to have a huge impact on the local large-scale agricultural production of hemp products, albeit with strict oversight by the regulator, as is the case with the production of medicinal cannabis. Although these opportunities are certain to be exploited by corporate players in the sector, it is unlikely that traditional growers will be empowered to take advantage of these provisions due to the cost of compliance with the regulations.
On the medicinal cannabis front, since the amendment of the Medicines and Related Substances Act 1965 in 2018 and publication of the guideline for cultivation of cannabis and manufacture of cannabis-related pharmaceutical products for medicinal and research purposes, almost 80 cultivation licences have been issued by the South African Health Products Regulatory Authority to date.
There has also been impressive investment in establishing local production companies. For example, SafriCanna is a local company co-owned by billionaire Bassim Haidar that has sold its entire 2023 production in advance. In addition, the company plans to expand its facilities to increase production fivefold by 2024. To be truly successful on the global market, local medicinal cannabis manufacturers need not only to comply with the local regulations, but also meet international standards. SafriCanna is one of only a few South African companies that has met the European Union's good-manufacturing-practice standards so that it can take advantage of the European API market for cannabis products.
Another example of local success is Cilo Cybin's imminent listing on the Johannesburg Stock Exchange as a special-purpose acquisition company. Cilo Cybin is the only South African company at present with a licence to grow, process and pack cannabis.
These successes contrast with the challenges that many of the local communities that have long been involved in the informal cultivation and sale of cannabis products face. Although these communities have been growing and selling cannabis for many years, their activities are illegal. Unfortunately, it seems that the regulation of medicinal cannabis has not necessarily provided opportunities for these traditional growers, for whom the cost of legal cultivation and sale of medicinal cannabis products is just too high. The prescribed licence fee per application for cultivation of medicinal cannabis is almost 24,000 rand (about $1,350), excluding inspection fees and the licence collection fee. However, the licence fees are only a small part of the costs to set up a facility that meets the standards required by the regulator, which can run to around 5 million rand or more. In addition, the regulations require that the final cannabis products are analysed by an accredited laboratory for tetrahydrocannabinol (THC) and cannabidiol (CBD) content, since any product with more than 0.001% THC and more than 0.0075% CBD requires a prescription for purchase.
It is clear that if tangible benefits are to be experienced, not only by large corporates investing in this sector in South Africa, but also by traditional growers, both government support and private partnerships are needed. There is precedent for this in the Eastern Cape province, where the local community bred Pondoland or Landrace strain of cannabis has shown encouraging results in studies being undertaken by Sweetwater Aquaponics and the Council for Scientific and Industrial Research for treating breast cancer. The promulgation of the Cannabis for Private Purposes Bill and implementation of the Cannabis Master Plan are eagerly awaited (for more information see "Cannabis update for South Africa").
For further information on this topic please contact Joanne van Harmelen at ENSafrica by telephone (+27 21 410 2500) or email ([email protected]). The ENSafrica website can be accessed at www.ensafrica.com.