Cheeba Craft Cannabis Summit – 25th & 26th Feb

SESSION 1

Day 1

SESSION ONE OF THE CHEEBA CRAFT CANNABIS SUMMIT: AN OVERVIEW OF THE VALUE CHAIN AND OPPORTUNITIES

  • New cannabis fund SilverLeaf launched by serial cannabis entrepreneur Cliff Giesenow: chance for South African investors to get a slice of the upcoming marijuana boom; more details to follow
  • Section 12J loophole closing down for cannabis entrepreneurs as South African Treasury grabs as much money as it can; only days to act;
  • Botswana starts the legalization debate;
  • The opportunities in the African cannabis industry lie in:
    • African stories becoming international brands
    • Less focus on cultivation and more investment in value-added products and support industries;
    • Investment in testing, processing and extraction
  • Keynote panelist, New Frontier Data’s John Kagai says: 
    • Hemp will be bigger than cannabis for Africa
    • African governments should establish regional collaborative biomass hubs
    • Africa should avoid the lowest-cost producer strategy and look at creating value in the supply chain beyond cultivation;
    • Africans should not be obsessed with exports and focus on the value of cannabis for the health and financial benefits of Africans;

SESSION 2

Day 1

CHEEBA CRAFT CANNABIS SESSION 2: UNPACKING PRIVATE GROW CLUBS: HOW THEY WORK

Cannabiz Africa take out points:
  • The future of private cannabis clubs hinges on the High Court judgement involving Cape Town’s THC clubs; lawyer Andrew Lawrie says he’s quietly confident the legality of private clubs will be upheld because they are within existing constitutional rights; he says no law needs to be changed to recognize private clubs once the court makes its judgement; 
  • Lawrie says there are now three types of cannabis in the legal playing field:
    • Illegal: the high value underground recreational marijuana market
    • Medicinal: CBD and the low THC stuff
    • Private: cannabis consumed on a non-financial exchange basis between consenting adults in clearly defined private space
  • For once, size doesn’t matter: so long as you’re not selling seed or weed there’s no legal restraint on whether private cannabis clubs are
    • Community organizations
    • Non-community organizations
    • Social clubs
    • Non-profit organizations
    • For profit-organizations
    • Stoner friends
    • Multinationals
    • Stokvels
    • Combination of any of the above
  • Ghanjaman Sam of 7 leaves asked why private clubs should be confined to users: “What about dealers clubs?” he asked. “All arrests right now are because of miscommunication between authoraties, and inevitably it’s the community that feels the brunt”;
  • Fields of Green for All’s Marlene Theunissen has prepared a national framework for private cannabis clubs that does the government’s work for it, it sets the basic compliance standards, and this will be rolled out soon to get momentum for change from “the bottom up”;
  • In Theunissen’s view the police are the “South African mafia in uniform”. She says it’s unacceptable that the persecution of cannabis users continues while legalization is underway. She says the police need to be educated: “They can change your day in a flash and charge you for laws that are not in place yet. They do not understand that cannabis is about community building and abuse their power.” 
  • How much does it cost to start up a private cannabis club? Grow One Africa’s Kobus Schoeman has experience. His answer: “Your life”.
  • Bottom line on private cannabis clubs: 
    • Have a registration number and membership records
    • The club can’t own the cannabis
    • Outgrow the government

SESSION 3

Day 1

Main take-outs from the Future of Hemp Session

Cannabiz Africa take out points:
  • Africa has lost first-mover advantage in the booming international hemp market;
  • Hemporium founder Tony Budden says “We could have been a world leader but fell behind because governments have not moved quickly enough to put the right regulatory frameworks in place. We now have to look at the benefits of coming second and looking at first-mover advantage mistakes”;
  • Budden said the South African government had the right intentions in legalizing hemp, but the major problem remained that all hemp products had to be imported;
  • He said there had been ongoing customs issues in clearing CBD products: “it’s super-expensive to bring in textiles from the east; from a cash flow point of view it’s not good because our money is out there for a long time. But we’re taking it on as pioneers in this space and pay the school fees; but it’s hard to close the door behind you for others who won’t have to pay the school fees”;
  • Budden said for the first time hemp products were now coming into South Africa from Malawi and Lesotho, but that it was still legally problematic to source hemp from South Africa itself;
  • Malawi hemp pioneer Tanya Clarke of Invagro Malawi said political turmoil in that country over the past year had derailed the licensing process, but that the year ahead looked to be more stable;
  • She said there was “overwhelming interest” by small-holders in growing hemp and the Malawi government was finally responding: “We’ve come a long way. It hasn’t been easy, but we’re really looking forward to exports in the year ahead”; 

SESSION 1

Day 2

Cannabiz Africa Publisher Brett Hilton-Barber’s Main Take-Outs:

  • The development of African landraces present a major opportunity for potential large-scale farming;
  • South African landraces have a far higher medicinal value than previously believed, according to Druid’s Garden Cian McLelland who said that the University of the Free State had done research into the cannabinoid profiles of local varietals and found they were “off the charts in medicinal value compared to most international strains”;
  • However, all cultivars approved so far for local licencees by the South African Health Products Regulatory Authority (SAHPRA) were foreign varietals and based only on the needs of international buyers;
  • There was general consensus that everything possible should be done to protect the integrity of South African landraces and that ideally this should ideally be the cornerstone of local large-scale cannabis farming;
  • Session host Jeff Verlinden of Separations Extractors made the point that the SAHPRA was forcing an “outward-looking” model by not allowing a local cannabis market to develop; he said for the industry to develop it had to also “look inward” and allow the South African market to develop across the whole value chain; “the pursuit of off-take agreements was an unnecessary distraction” that hampered the development of large-scale cannabis farming;
  • Veteran grower Natie Ferreira of Qure said the sharing of knowledge and quality assurance would be the key drivers for large-scale cannabis farming in South Africa;
  • Everyone agreed that the costs associated with quality testing are major barriers to entry and that there was more nuance required in the testing space as the cannabis market was evolving dramatically;
  • The panelists agreed that one of the most exciting developments in the past three months was the launch of skills training initiatives like Cheeba’s Cannabis Academy;
  • The other exciting development has been the rising collaboration between industry players and there was much emphasis on education and sharing information;
  • The Cannabis Development Council’s North West provincial chairperson Dinake Daniel Motona said government leadership in the cannabis space is absent and/or confused and that regulators are holding back the development of the cannabis industry;
  • But he added there were positive developments and engagements with authorities, particularly
    • the North West Government’s health department has instructed municipalities to include a cannabis strategy in their development plans and
    • the Eastern Cape’s agriculture department’s active engaging with cannabis farmers;
  • Motona said regulators needed to be educated to “embrace the spirit of the plant” and not just focus on narrow legislative definitions;
  • Ferreira said: “Don’t expect government to drive reform, the industry has to do it; we’ve got to come across more forcefully to make them see the value chain from field to market” to which Verlinden quipped: “Waiting for reform is an invitation to revolution”;
  • There were conflicting views on hemp with a general consensus that it should be treated legally differently from medical and recreational cannabis;
  • Corne van der Watt of White Lion Holdings said hemp should be restricted to certain areas to prevent cross-pollination (in fact you shouldn’t mention hemp around him at all);
  • Cross-contamination is a major issue in large scale farming; Ferreira called on regulators to develop an evidence-based southern African framework for measuring this; 
  • McLelland said the legislative restrictions forcing large-scale farmers to export is a “colonial model” and that South Africans should “proudly own” the rest of the value chain as well;
  • He said it appears the authority to issue hemp research permits has been moved to the Department of Agriculture from the South African Health Product Regulatory Authority;
  • There is uncertainty as to whether CBD would be excluded from hemp regulations: all panelists thought that a bad idea;
  • Like the consensus that has come out of other sessions, panelists agreed that putting seed in the ground would speed up legislative reform.
 
  • Final word from the White Lion: “No matter what your need, even if it’s greed, it all starts with seed”

SESSION 2

Day 2

MARKETING A CANNABIS BUSINESS

Cannabiz Africa Publisher Brett Hilton-Barber’s Main Take-Outs:

Seasoned media veteran and co-founder of SilverLeaf Investments, Pierre van der Hooven knows what it takes to introduce a mega-brand to market. He was behind the internationally-acclaimed launch of YFM and eTV back in the day. Now the marketing guru is ramping up his commitment to the cannabis space. On 25 February 2021, he announced that his new business SilverLeaf Investments is to offer non-institutional investors a chance to get into the marijuana boom. 

On 26 February on the Cheeba Craft Cannabis Webinar on Marketing a Cannabis Business he shared his thoughts. In a nutshell, his mantra:

“Choose your brand, choose your positioning and stay true to your message; if you are authentic you will find your target market”.

If I had to filter the magical mind of Pierre van det Hooven into a quick 10 point brandback for marketing a cannabis business, this is how I’d summarize his methodology:

  1. Focus (do your homework, use the data, identify and understand your consumer on every level)
  2. Have an Authentic Product (bottom line: is it a solution to a problem?)
  3. Start with Africa (we do passion big-time)
  4. Tell a Story (Content-based marketing is the way to go to engage the consumer);
  5. Make it Personal (Link your product to a face that tells a bigger story)
  6. Bust the Myths (Root your message in education, can’t emphasize this enough)
  7. Bend the Rules (Overcome the legislative hurdles and social stigmas in marketing cannabis)
  8. Save the World (Cause-related marketing so that the purchase decision is a call to action: ‘buy a hemp towel because it’s more environmentally-friendly than a non-hemp towel’)
  9. Deliver on Your Promises (you can tell a good story but if you don’t build consumer trust you will fail)

Reap (execution has to be measurable; success speaks for itself)

SESSION 3

Day 2

MARKETING YOUR CBD BUSINESS 

Cannabiz Africa Publisher Brett Hilton-Barber’s Main Take-Outs:

  • African authenticity is probably our strongest Unique Selling Proposition;
  • Cannabis is a wellness product: it’s not addictive or causes harm, but marketers should be sensitive to encouraging overconsumption;  alcohol and tobacco guidelines may point the way;
  • Make education an integral part of marketing – there are a lot of perceptions to shift and myths to bust; Info vs disinfo;
  • Content-based marketing is the way to go; fits in with education and African storytelling;
  • Be conscious of social media restrictions on the use of the word ‘cannabis’ in marketing; there could be problems with FaceBook, Instagram and other platforms blocking such content;
  • Marketer Travis Scadron of Surfside USA: “Identify your consumer, understand their community and engage: there is no such thing as a single profile for a cannabis consumer – in the US we have 25 000 attrributes to profile cannabis consumers;
  • Use data to build consumer profiles and try and link that data to geographical locations; 
  • There is a paucity of data: Scadron pointed out that 90% of South Africa’s cannabis users are black: “the future consumers are those we know the least about”; 
  • Be sensitive to the relationship between privacy and data:  Mbali Ndlovu: “as a cannabis consumer remember you have the right to protect your own data and agree to who it can be shared with”;
  • To get access to proper data in SA probably costs about R500k; the best way to access data is through medical dispenseries;
  • There is space for African brands in the international cannabis market but companies have to do their homework; Pierre van der Hover: “If you’re marketing into Europe, use local marketing agencies who understand the culture”;
  • Host Marc Wergerig: “We need a strong local industry to create a platform to market internationally”;
  • Marketing through education: Mirishin Schutte of Abis Inc: “the departments of education and health should have a schools’ programme educating children as to what the impending legalization of cannabis means”;
  • Personalizing brands develops consumer engagement;
  • Link product to people; take the profile of the small African farmer into products in the world market;
  • Last line to Mirishin Schutte of Abis Inc when asked how costly it is to market a marijuana business: “Well we get arrested at least once a year!”