According to reports, the formal cannabis industry has the potential to create up to 25,000 jobs and could be worth around R28 billion – but it still faces major hurdles in South Africa, particularly when it comes to Cannabis License Requirements for South Africa.
Despite commitments from the South African government to amend stringent cannabis laws to help create a thriving commercial cannabis industry in South Africa, private businesses, growers, and entrepreneurs face many obstacles in getting their products to market.
- Government policy uncertainty
- Licensing and regulatory uncertainty
- Anti-competitive behaviour by industry gatekeepers (i.e. Importers, Tobacco Wholesalers, etc.)
- Misrepresentation of charities and non-profit organisations
- Online Policies that exclude cannabis businesses (i.e. Amazon, Google, Meta, etc.)
- Banks and FSPs blocking cannabis businesses from using financial services
Despite these challenges, the slow pace of opening up the legal market has not stopped the emerging cannabis industry with many organisations, private businesses, growers and entrepreneurs in the cannabis sector actively working to demonstrate the safety of recreational, medicinal and commercial cannabis, and its many economic benefits.
National Cannabis Master Plan
In 2018, the Constitutional Court upheld a ruling finding that sections of the Drugs and Drug Trafficking Act were unconstitutional, leading the way to the decriminalisation of private cannabis use in South Africa.
In 2021, South Africa released a National Cannabis Master Plan, outlining that the formal cannabis industry would be a game-changer for the country’s economy. Currently, the only established legal commercial sectors in South Africa are medical cannabis and hemp.
This presents unique challenges for potential cannabis businesses when it comes to obtaining licences, funding, financial services and navigating the current legislation in South Africa.
Is Cannabis a Scheduled Substance in South Africa?
Currently, THC is classified as a Schedule 6 drug. A Schedule 6 drug requires a prescription from a medical doctor and South African Health Products Regulatory Authority (SAHPRA) registration for dispensation by a pharmacy.
Cannabis Scheduling of CBD and THC Differs
CBD, another component of the plant that is not psychoactive, can be prescribed as Schedule 4 or obtained over the counter as Schedule 0 (zero) if it meets certain concentration thresholds.
THC products can be seen as Schedule 0 (zero) if they contain up to 0,001% THC and do not have any health claims.
Medicine Scheduling: South Africa vs USA
South African and USA medicine scheduling systems share the primary goal of categorizing medicines based on their safety, efficacy, and potential for abuse or dependence. However, there are differences in how they classify medicines and the number of schedules they use:
Medicine Scheduling for South Africa
In South Africa, the South African Health Products Regulatory Authority (SAHPRA) oversees medicine scheduling, which uses a system ranging from Schedule 0 to Schedule 8:
- Schedule 0: Low-risk medicines available without a prescription
- Schedule 1 to Schedule 5: Medicines with increasing risk and requiring a prescription
- Schedule 6 to Schedule 8: Controlled substances with increasing potential for abuse or dependence
Medicine Scheduling for USA
In the USA, the Drug Enforcement Administration (DEA) is responsible for drug scheduling. The system uses five main categories, known as “Schedules I-V”:
- Schedule I: Drugs with high potential for abuse and no accepted medical use
- Schedule II: Drugs with high potential for abuse, may lead to severe physical or psychological dependence, and have medical use
- Schedule III: Drugs with moderate to low potential for physical or psychological dependence
- Schedule IV: Drugs with low potential for abuse and low risk of dependence
- Schedule V: Drugs with lower potential for abuse than Schedule IV and consist primarily of preparations containing limited quantities of certain narcotics
While both systems aim to regulate access to medicines and controlled substances, the specific categories and scheduling criteria differ between South Africa and the USA, so don’t get confused.
Cannabis for Private Purpose
The Cannabis for Private Purposes Bill allows for cannabis plants, when privately cultivated or consumed by adults, to not need regulation by SAHPRA. However, it cannot be obtained through traditional commercial exchanges.
Recreational Cannabis Market
While progress has been made over the past several years to open up legislation to allow for the commercial medicinal cannabis and hemp sectors, nothing has changed for the commercialisation of a major portion of the cannabis market – the recreational sector.
Cannabis in the Private Sector
There have been numerous instances showing the eagerness of South African growers and businesses to be part of building a comprehensive and competitive cannabis industry in the country.
However, industry exhibition events have not met local expectations for business owners. The high cost to vendors is a major deterrent which doesn’t make financial sense for local startup businesses, particularly when the industry is facing so much economic uncertainty.
Some events also place restrictions on the selling of cannabis seeds (despite being legal to buy and sell them in South Africa). This puts the cart before the horse by expecting consumers to buy expensive cultivation equipment before exploring how to start growing cannabis seeds.
Cannabis Licenses in South Africa
The booming interest in legal and not so legal cannabis products has created a local rush of both producers and consumers seeking licenses in South Africa.
Therefore, cannabis licenses are slowly becoming a reality, but are very difficult to obtain with practically no commercial licenses available.
How to get a Cannabis License?
Obtaining an official Cannabis License is not easy. Businesses need to have sufficient capital in the bank in order to acquire the necessary growing facilities.
Personal Cannabis Use License
You do not need a license to grow and use your own cannabis as it was decriminalized for private adult use in 2018. The bill recommends private possession of up to 600g of dried cannabis per person in private, or a maximum of 1200g per household with two or more adults living in it. Private possession within a public space will allow up to 100g of dried cannabis per person.
CBD License
CBD products generally do not need a license to sell. So long as the daily dosage is 20mg or less of CBD, then just about anything goes. From infused drinks and alcoholic beverages, to desserts and dog biscuits. The importing of CBD can be very difficult as SARS is not keen on allowing these products into the country.
While local trade in CBD products is growing, it is important that you understand the product labeling and double check that what you are buying is what is written on the package, full disclosure.
Medical Cannabis License
Getting a medical cannabis license in South Africa is almost impossible. A handful certainly exist and more are being issued. The process only currently caters for rare cases that can rely on the one dimensional aspect of isolate and synthetic cannabis pharmaceuticals. Many genuine medical users therefore have neither the time nor the motivation to deal with the bureaucracy. This is before even considering the significant personal and financial costs involved. The president had announced that Medical Cannabis will be officially legalized, but there has been no word since.
Those who would like to grow and supply “medical cannabis” need to ask themselves one question. Do I have the money and time to invest in producing legal pharmaceutical grade cannabis or cannabis products? That is what it will take to get started. This is well before you are able to produce something that can compete with existing over the counter pharmaceuticals.
Licenses tend to be very prohibitive in terms of being sold locally and may therefore need a reputable international buyer. If you are going to trade locally in products produced under your supplier’s license or permit, it is essential that you validate these documents and that they allow the sale of said products. As many only allow research purposes.
You can contact the South African Health Products Regulatory Authority (SAHPRA) to find out more, or read their Cannabis Cultivation Guide for South Africa.
Hemp License or Permit
While the Hemp License regulations are yet to be announced by the government, you can obtain a hemp research permit from the Departments of Health or Agriculture under the Medicines Control Council.
Cannabis Club License
Industrious companies and organisations are using a loophole to trade by self-regulating private cannabis clubs and dispensaries. There are currently no licenses available for cannabis clubs in South Africa.
Traditional Healer License and Cannabis
Various traditional healer and cultural associations have frequently taken to the streets and courts seeking inclusion in the current informal and pending formal cannabis markets. Traditional and informal growers potentially have the most to lose, as a legal system may have too many barriers to entry. The traditional market therefore remains informal.
Some dispensaries and farms are trading under their traditional healers license. This has led to a sudden burst of online traditional healers and physical retail franchises, leading to some prominent arrests and court cases.
Some organisations believe the Traditional Healers Act of 2007 excludes Cannabis from traditional medicine. The 1992 Drugs & Drugs Trafficking Act specifically describes Cannabis, although it is clearly outdated and represents the kind of misinformation and propaganda we would like to avoid.
All South African’s are well within their rights to use traditional healers or obtain a traditional healer certificate to excuse themselves when on sick leave from work, but the question as to whether traditional healers can dispense cannabis legally is still a grey one.
Do I Need a Cannabis License in South Africa?
A license is certainly a requirement for those who wish to enter a formal and legal cannabis market. However, significant administration and capital costs inhibit the local economic potential of cannabis. Many investors and land owners are “patiently” waiting for the processes to become transparent and hopefully less restrictive.
Buy Cannabis Seeds in South Africa
Whether you are a personal or commercial grower, you will need high quality genetics to get you growing. Commercial growers in particular will need to meet their client’s needs and provide proof of the strain genetics. We strongly recommend that you consider Cafe420 as your local seed retailer and wholesaler.
Now that you understand Cannabis License requirements for South Africa, you can continue learning how to grow cannabis in South Africa with Cafe420. Read our quick 3 step guide on how to select your cannabis seeds and start growing cannabis today!
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