While conversations around cannabis reform and emerging legal markets often focus on North American or European policy, a new Bloomberg report turns attention to Africa, specifically South Africa, and its role in the evolving global industry. Namely, the demand for medicinal cannabis from Europe to Australia resulted in a South African cannabis producer selling all its output for next year in advance.
SafriCanna signed sales deals with Germany and Australia for the bulk of production, according to Bassim Haidar, CEO of its largest investor, Optasia. On the company website, SafriCanna says it aims to be “the leading South African EU-GMP certified medical cannabis producer, bringing together best practices and African advantage.”
The company describes South Africa as a “predominantly untapped resource” in the global medicinal cannabis market,” addin, “as our continent plays catch-up, not only on legalisation but also on growth and distribution, SafriCanna aims to assert itself as South Africa’s premium, fully-integrated medicinal cannabis brand.”
Construction of company facilities began in the capital, Pretoria, in 2019, with SafriCanna shipping out its first flower in June of this year. That same month, SafriCanna made a deal with German-based DEMECAN to supply it with medicinal cannabis flower.
At the time, DEMECAN said that the partnership and expansion of its supplier network will allow it to “continue to lead the way in providing patients with the highest quality medical cannabis products and at the same time diversifies its supplier network for the upcoming legalization of recreational cannabis in Germany.”
According to a company release, the move allows DEMECAN to further consolidate its position as the “go-to company for medical cannabis” while also providing a possible advantage for Germany’s future recreational cannabis market.
SafriCanna is taking this interest into account for the future, looking to meet rising demand by increasing production fivefold by 2024. The company will spend $40 million on expanding its facilities in Pretoria to produce 25,000 kilograms (55,000 pounds) of cannabis flower a year, as compared to the current 5,000 kilograms of flower, Haidar told Bloomberg.
Research continues to uncover the benefits of cannabis in treatment for a number of conditions, with rising demand in countries throughout the world to treat ailments like nausea, Alzheimer’s, chronic pain, seizures and more.
As the market continues to boom, Haidar said that SafriCanna is among a handful of African companies that have met the European Union’s strict good-manufacturing-practice standards. This enables it to export cannabis flower as an active pharmaceutical ingredient to Europe, according to Haidar.
This could be a sign for future growth of the global cannabis economy, and market researchers already have their finger on the pulse for the next chapter. Research firm IMARC Group found that the global cannabis market reached a value of $26.1 billion USD in 2021. The firm said it expects the market to reach $52 billion by 2027, with a CAGR of 10.4% during 2022-2027.
Expanding upon the most prominent global medical cannabis market drivers, the report notes that cannabis has been proven safer, with less side effects in comparison to other treatment options, in recent years. In addition, the “steadily aging” population across the role has driven the demand for medical cannabis patients, IMARC notes, with geriatric patients more likely to develop chronic illnesses and require more physician visits.
IMARC also attests that clinical trials, research and development activities and the commercialization of cannabis-based indications “are further expected to catalyze the growth of the market.” Additionally, increasing disposable incomes are projected to create a positive impact on the demand for medicinal cannabis.
Haidar is a 51-year-old Nigerian-born entrepreneur, who told Bloomberg he chose to invest in the South African cannabis industry due to its infrastructure, inexpensive land and good climate. The country’s cannabis industry is projected to be worth 27 billion rand ($1.6 billion USD) by 2021.
