Yes, SA’s cannabis industry has a regulation problem. It also has an accountability problem.
Government deserves the criticism it gets. Years of policy delay have frustrated investment. There is still no lawful adult-use supply market. Medical growers face a demanding export regime, while a big domestic retail market trades with no lawful commercial framework behind it. All of that is true. But it has become the excuse for everything that has gone wrong inside licensed cultivation businesses, and it shouldn’t be.
More than 100 medical cannabis cultivation licences have been issued. That tells you how many operators got permission. It doesn’t tell you how many built a business. A licence won’t say whether a facility can deliver cannabis to a buyer’s specification, whether the crop sells at a sensible price, or whether investors will ever see a return.
Andrew Bowman’s research, published this year in the International Journal of Drug Policy, sets out how hard export economics are: expensive compliance, fierce competition, and overseas buyers with the upper hand. I don’t dispute it. But a hard market calls for more commercial discipline, not less. It is no excuse for being unable to say what happened to the capital investors handed over.
Take the numbers. Cannabiz Africa reported that South Africa produced roughly 10 tonnes of medical cannabis in 2023 and exported only 1.6. I’m not suggesting the rest went into the illicit market. Some will have sat in storage, some will have been processed, some destroyed. But every licensed grower should be able to answer a simple question about its own operation: where did the harvest go?
For an investor, that is not an abstract regulatory point. If a company says it harvested, one should be able to follow that material through grading, stock records and then disposal or sale, and match the proceeds to the financial statements. A conversation with an overseas buyer is not an export order. A projected selling price is not revenue. That matters most when the company is asking for more money on the strength of the next crop or a prospective offtake.
The export market does work, though it is fiercely competitive. German import data show about 3.7 tonnes of medicinal cannabis arriving from South Africa in 2025. I couldn’t tell you whether those suppliers made a profit. But South African product is reaching an important market, so regulatory delay can’t be the whole answer when a venture misses the numbers in its own investment proposal.
When an operator asks for more money for equipment, refurbishment or working capital, I want to see an honest account of what was produced and spent last time. Why were the earlier forecasts missed? What has changed? Investors shouldn’t have to choose between funding another forecast and walking away with no answers about the money already spent.
South Africa needs regulatory reform, and government should answer for its delays. So should the people running licensed businesses. The industry will attract lasting investment when it can show not just what it is licensed to grow, but what it actually sold, what it earned, and where the rest went.
By Darryl Weisz, Executive Director, Silverleaf Investments, South Africa’s first dedicated cannabis investment fund.
Disclosure: Silverleaf is an investor in the South African cannabis industry.
