The DSBD’s Minister Stella Ndabeni-Abrahams (pictured here) said in a written reply to a Parliamentary question that the DSBD and the CSIR had partnered in researching cannabis income-generating opportunities for SME’s and were looking to appoint an expert to advise on taking the commercialization process forward.
Songezo Zibi of the Rise Msanzi Party had asked the Minister what steps had her department taken to support cannabis and hemp sector development, what it was costing and what timeframes were involved.
Ndabeni-Abrahams said the Department was seeking an expert to pull together three years of broader research that had tested the potential of cannabis and hemp beneficiation.
She said this exercise had cost R6 250 million between 2022 and 2025, of which the Department had contributed 88% and the CSIR had paid12%.
The Minister said the delay in finalising the regulations for the Cannabis for Private Purposes Act 2024, was making it difficult for the small businesses to derive benefit from the legalization process to date. She said it was essential that the regulations criminalising cannabis under the Drugs and Drug Trafficking Act No. 140 of 1992, were repealed as this was a key legal barrier to implementing the National Cannabis Master Plan.
She said the lack of clarity in regulations surrounding legal cannabis use and the cultivation of industrial hemp “continues to complicate the situation for small businesses in freely pursuing opportunities in this sector anticipated to hold much benefit.”
The Minister said the Department was currently assessing cannabis projects in three provinces (KwaZulu-Natal, Northern Cape and Eastern Cape) as a start for provision of support on infrastructure requirements.
The process of site visits is underway and projects in KwaZulu-Natal have already been visited for verification, and the Northern and Eastern Cape to follow thereafter.
Ndabeni-Abrahams said the DSBD had decided to appoint an “expert in the cannabis sector to use the research outcomes and expand them into pointing out the possible opportunities for creation of ventures coupled with requisite processes and procedures”. It has budgeted R300 000 for this exercise.
Question NW2135 to the Minister of Small Business Development, Minister Stella Ndabeni-Abrahams.
12 June 2025 – NW2135
Zibi, Mr SS to ask the Minister of Small Business Development
(1) What
(a) steps has her department taken to support and promote small- and medium-sized enterprises in the hemp and cannabis sectors and
(b) are the (i) timelines and (ii) budget allocations in this regard;
(2) what regulations and laws has her department identified which
(a) impede the development of a hemp and cannabis sector in the Republic and
(b) introduce unnecessary red tape for small-, medium- and micro enterprises (SMMEs) in the sector;
(3) what steps has her department taken to
(a) address the specified legal and regulatory constraints and (b) assist SMMEs to navigate the specified red tape;
(4) what steps has her department taken to ensure that the sector is an enabling space for (a) rural and (
b) black- and (
c) women-owned businesses?
Reply:Minister Stella Ndabeni-Abrahams
I have been advised that:
1. The Department has conducted research on the value chain relating to hemp and cannabis to assist the Department in understanding the areas in the primary, secondary and tertiary economic functions which MSMEs may find opportunities for creation of small businesses to generate income, create jobs and play a meaningful role in the sector and related economic functional support activities. The study was conducted internally and as such, there were no costs associated with conducting the study.
The Department engage in a partnership intervention with the Council for Scientific and Industrial Research – CSIR to pilot development of products for small enterprise using medicinal cannabis and hemp for commercialisation.
The following were the results:
(i) timelines
a) The research took a year and was conducted internally at no cost. For validation purposes, the intention is to identify an expert in the cannabis sector to use the research outcomes and expand them into pointing out the possible opportunities for creation of ventures coupled with requisite processes and procedures. A budget of R300 000 has been set aside for this exercise in the financial year 2025/26.
Cannabis is an emerging sector and as such, the research conducted was timely. MSMEs are still gearing to participate and take up opportunities in the sector. Therefore, the study in itself provides an opportunity for MSMEs to gain some insight in new venture creation for income generation job creation.
Currently, the Department is assessing cannabis projects in three provinces (KwaZulu-Natal, Northern Cape and Eastern Cape) as a start for provision of support on infrastructure requirements. The process of site visits is underway and projects in KwaZulu-Natal have already been visited for verification, Northern Cape is to follow in this first quarter of the 2025/26 financial year, and Eastern Cape will follow thereafter.
(b) A pilot project for research and product development was executed over a three (3) year period to test the potential of cannabis and hemp beneficiation.
(ii) budget allocations in this regard were as follows: The CSIR contributed 12% which the department contributed 88% in a total budget of R 6 250 000.00 between 2022 – 2025.
2. The delay in finalising the regulations for the Act on Cannabis for Private Purposes Act 2024, renders possession and use of cannabis a criminal offense, therefore delaying small businesses in deriving economic benefits embedded. The Department of Justice is to finalise the development of the regulations that will see to the repeal of the regulations criminalising cannabis under the Drugs and Drug Trafficking Act No. 140 of 1992, which are key legal barriers in the implementation of the Hemp and Cannabis program in South Africa. This Act, which was established to combat drug trafficking and related offenses, criminalizes the possession, cultivation, and distribution of various controlled substances, including Cannabis.
3. (a) Currently the Department concentrate its support efforts on promotion and support for industrial hemp while the regulations to implement the Cannabis for Private Purposes Act together with the commercialisation policy by the Department of Trade, Industry and Competition are under development. The lack of clarity in regulations surrounding legal Cannabis use and the cultivation of industrial Hemp continues to complicate the situation for small businesses in freely pursuing opportunities in this sector anticipated to hold much benefit.
b) The advice the Department provides to unlicensed MSMEs is to acquire hemp licenses given their affordability and concentrate their efforts on industrial hemp commercialization as it also carries several venture opportunities locally and abroad.
4. The Department has taken a deliberate stance to approach issues of economic participation and inclusion through mainstreaming using the national targets as a benchmark in the implementation of its support interventions and programmes.
This is mainly reflected in the performance reports that measures the extend to which rural, township, black, women, youth and the disabled are part of the MSMEs supported from the financial and non-financial support provided on an ongoing basis. The normal structure of reporting addresses these elements under all programmes. In instances where any of the elements is reflected in the reports, reasons for deviation on lack of data in reports submitted are required to justify the omission.
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