This is an excerpt from Christopher Day’s report South Africa’s Cannabis Market: Building Momentum Despite Regulatory Inaction originally published on 21 July 2025 on Euromonitor
(Image: Members of The Canna Club, Garden Route South Africa).
Despite the lack of full legalisation, cannabis culture is thriving, fuelled by the historic prevalence of the illicit market, estimated by Euromonitor International at ZAR36 billion in 2025.
To combat this, the Cannabis for Private Purposes Act (CPPA) – passed in 2024 – legalises private cultivation, possession and use of cannabis, but, importantly, restricts any commercial sales or transactions. However, this has provided a legal grey area for businesses to operate, resulting in the rise of cannabis clubs in major cities.
These businesses are giving consumers private spaces to purchase and consume cannabis, while operating under the current compliance framework. These environments help shift consumer perceptions – especially viewing cannabis less as a taboo and more as a lifestyle or recreational product.
Stakeholder engagement continues to intensify across the cannabis value chain. This includes advocacy groups, entrepreneurs, rural cooperatives and large firms, which are lobbying for a more inclusive framework that enables a safe, legal and commercially integrated market.
Rising Legal Awareness and Push for Reform
As the legal framework around cannabis evolves – especially the CPPA, the Drugs and Drug Trafficking Act, and the National Road Traffic Act – many consumers are becoming more confident in navigating the evolving cannabis space.
Rather than discouraging engagement, this growing awareness is empowering consumers to explore cannabis outlets operating in legal grey areas, as they become more confident in understanding what is permitted under private-use laws.
At the same time, growing public sentiment is pushing for meaningful legal reform, especially around adult-use, or commercialisation. This is based on consumers and producers recognising the economic, as well as employment potential a fully commercial market may provide, forecast by Euromonitor to reach ZAR11 billion (USD610 million) by 2028, provided the current legal framework is amended. As a result, the illicit market will lose considerable market share, but will still retain a large proportion of the market.
Regulatory inconsistency continues to pose challenges. For example, in early 2025, the government briefly banned cannabis edibles, only to reverse the decision days later, following a public backlash. This highlighted the lack of a clear policy direction, undermining confidence among consumers, small growers and potential investors.
Moreover, several legal cases regarding cannabis clubs and their right to distribute among members are progressing through the courts, which could set important legal precedents before policies are amended.
During parliamentary hearings in early 2025, draft proposals were provided to amend the CPPA, aiming to permit limited commercial cultivation licences for small and medium growers under strict regulation. This provides economic opportunities, especially for traditional cannabis-growing areas like the Western Cape, Eastern Cape and KwaZulu-Natal.
The government is also exploring cannabis tourism frameworks, particularly in provinces with rich indigenous cannabis history. Early pilot projects are being considered for community-based co-ops to participate in the value chain – similar to winery tourism models.
Final Thoughts
Several factors will drive overall cannabis demand in South Africa, including demand from wellness-seeking consumers, the rise of lifestyle cannabis use, and growing advocacy for policy reform.
However, until South Africa resolves legal ambiguity and inconsistent policy implementation, the full potential of the cannabis industry will remain untapped. Going forward, key stakeholders, including government, regulators, private firms, advocacy groups and consumers, will determine the final outcome for the South African cannabis market.
#
