The weirdness is getting worse.
South African cannabis reform is not just back at Square One, it’s taken a giant leap backward. Ironically, this is because South Africa’s first piece of cannabis legislation is about to become reality with the Cannabis for Private Purposes Act (CfPPA) coming into force.
Cannabis Act is a ‘legal absurdity’ about to become law
In theory, new legislation should bring clarity. Not so in this case. The CfPPA is only going to add to the general confusion that characterizes the cannabis landscape. The Act, described as a legal absurdity by the Canadian Supreme Court, does not pass constitutional muster, is in direct conflict with the objectives of the National Cannabis and Hemp Master Plan (NHCMP), undermines the DTIC engagement with stakeholders, deters further investment in the sector, and has no bearing on reality.
Instead of bringing any stability or certainty to the sector, the Act is likely to unleash a slew of court cases, more arrests and social discord until such time as the promised new ‘omnibus’ law is drafted and comes into effect.
Until then, operators will have to navigate the window between the Cannabis Act coming into force, in terms of which ‘dealing’ is criminalized (with up to 10 years jail time) and the planned new legislation that will regulate commercial activity (ie legalize ‘dealing’).
There is no middle path between the Cannabis Act and future legislation allowing commercial activity. The same activity deemed as a transgression today, punishable by 10 years in prison, could be in line for government support once a new law is passed.
Essentially, that’s the challenge facing the estimated 12 000 cannabis retail outlets, the growers and manufacturers that support them – and SAPS: getting through the upcoming ‘War Against THC’ until a new ‘Cannabis for Public Purposes Act’ is put on the table.
What Part of the Cannabis Act bad for business? All of it!
The CfPPA, has been gathering dust in the legislative backroom since it was signed off by President Ramaphosa in May 2023. It hasn’t yet been enforced because the final regulations that will govern the Act have not been published, despite the deadline for public input having passed six months ago.
The Act, described by SA Cannabis Development Council chair Gareth Prince as “a slap in the face of the dagga community”, is a narrow interpretation of the 2018 Constitutional Court ruling that legalized the private consumption and possession of cannabis by adults.
While it recognizes those rights, it criminalizes all access to cannabis other than for SAHPRA-authorized medical cannabis patients. It also continues to criminalize legacy communities, retail outlets, private cannabis clubs and rural and township entrepreneurs, many of whom have received state support for getting their enterprises off the ground.
The CfPPA, which seeks to limit access to cannabis as far as possible, stands in direct contradiction to Government policy as envisaged in the National Cannabis and Hemp Master Plan, and does not address the reality of the flourishing cannabis retail ‘Grey Zone’ which is valued at anywhere between R35 billion and R60 billion and providing thousands of jobs. Instead of enabling the state to get tax revenue off this sector, the Act will have the effect of driving the retail market back underground.
The Act also criminalizes every person supporting the industry by buying cannabis or related products with a THC content of above 2%.
Although the final gazetting of the Cannabis Act will automatically remove cannabis from the schedules of the Drugs and Drug Trafficking Act, transgressors will now be penalized under the Medicines Act.
At this point it’s uncertain as to what the final regulations are that will govern the Act, particularly what quantity is considered ‘dealing’. Whatever the regulators come up with, the core problem remains: how do you get a sunrise sector off the ground by making criminals of the people who are meant to make it happen.
DTIC’s commercialization plans: missing in inaction
Cannabis reform is a sign of the state’s deeper malaise, as evidenced in the Madlanga Commission. The departure of John Jeffery as the DTIC’s project manager for the National Cannabis and Hemp Master Plan, has left the department rudderless and further from transforming its draft commercial policy into law. It’s efforts to introduce interim measures to regulate cannabis retailers via the Business Act have come to nought.
In March this year, MP’s on the Parliamentary committee tasked with producing a law governing the commercial trade in cannabis, were told that the deadline to get any new legislation out by next year was to get a bill before the National Assembly ahead of the June recess. In reality, the draft commercial policy is believed to be on the desk of DG Simphiwe Hamilton, where it has been for the last nine months. The deadline for presenting the policy to Cabinet and calling for public input passed in April.
The commercial policy bill envisages the regulated retail of THC products, the inclusion of legacy growers into the legal framework and the legalization of private clubs and a licensing framework for non-hemp cultivation and retail. It makes provision for a central cannabis authority to oversee all aspects of the sector.
Prepare for the ‘high risk’ long wait ‘window of woe’
For such a policy to become law is at least two years away, and with the 2029 general elections looming, even that may be an optimistic expectation. The focus of politicians entering an electoral cycle is to get re-elected, not to implement long-term policies, particularly if they are controversial.
In short, South African cannabis operators are possibly entering a two year ‘window of woe’, with the Cannabis Act being a form of Prohibition Lite. Cannabis consumption and possession is legal and growing.
The market is not going to go away. The Cannabis Act, if it is to be enforced when it finally comes into law, is merely going to drive the industry underground again. By the time a commercialization law comes around, organized crime will be even more firmly entrenched in the sector, at the expense of those attempting to be compliant or legal.
You’d be forgiven for thinking that must be what this Government wants after all.
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