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Could South Africa Face A Supply Problem When Weed is Legal

Words by: Andrew Macfarlane, writer and budding horticulturist.

This might seem like a situation that would never happen in South Africa, after all, weed is
everywhere. From car guard sellers to hipster friends “growing copious amounts of ganja” in
their backyards, it’s hard to believe that there’d be a supply problem when it becomes legal to
buy.

But this was the case in Canada when it became legal to enjoy recreational cannabis in October. Health Canada said they shipped 14 tonnes of dried weed and 379 litres of marijuana oil
within the first month, and said at the time that they had an inventory of more than 90 tonnes of
dried product and 41,000 litres of the oil.


However, legal suppliers in Canada said it would take up to a year to meet the orders, due to
the slow supply chain. Many clients complained about the shortages and threatened to return to
the illegal outlets. Also, it didn’t help that each state had its own regulations and taxes on the
product affecting costs. So what does this mean for South Africa? Here are a few issues we
could see in making weed legal.


Legal Growers Are Far And Few Between


While there is a lot of cannabis growing around South Africa, there aren’t many legal suppliers
in the market. And the first Cannabis Cultivation License is only being issued in April this year
by the South African Health Products Regulatory Authority.


This is bad news for eager tokers who want to turn over a new leaf and go legal. Without a legal
stockpile for outlets to access, you can expect a huge backup due to demand for the legal
product.


But there are other more human problems that need to be tackled before supply issues.


Smaller Players Won’t See The Benefit


Many smaller subsistence farmers are worried about the costs needed to actually become legal
distributors – and they should be. According to a snippet from the Daily Maverick Nico Kriek, a
regulatory pharmacist and managing director at the Cannabis Compliance Bureau, which helps
people get licences in South Africa, it can cost up to R6-million to become compliant.


These farmers, who are mainly located in Lesotho, are being out-farmed by international
farmers as they obtain these expensive licenses while the small-scale farmers are still being
prosecuted.


Currently, the majority of “privately” purchased weed is from these small scale farmers. It might
take years for commercial farmers to reach the levels of supply these “noncompliant” growers have achieved. Also, a more important aspect is that government must ensure these farmers
can actually access this new economy… but that’s another blog topic.


Most Sellers Are Focused On Exporting


As we’ve mentioned there are players in the market that have acquired licenses to grow weed
locally, but the majority of these companies are focused on exporting crops rather than pushing
their product domestically.


Currently, the Cannabis Consumer Research Team at Seaport Global Securities believes that
the world cannabis market can reach upwards of US$630-billion in market value by 2040. This
means most of our supplies will be destined for overseas sale.


So, before you decide to give away the majority of your homegrown, legal crop, you might want
to hold on to it a little longer.


Zootly says: “Wow, as a sentient owl, I feel like I’ve overachieved reading this blog about the
potential supply and demand issues South Africa could face. But you know what? I’m ok with
that, I’ll just need to up my grow game…”

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