South Africa’s cannabis sector stands at a defining crossroads.
On one hand, significant strides have been made to establish a legitimate, compliant medicinal cannabis industry.
On the other, a rapidly expanding informal market continues to operate outside any regulatory framework — creating urgent pressure points that cannot be ignored.
At Nexus Pharma, we have chosen the legal route: investing in GMP-aligned infrastructure, adhering to SAHPRA and DALRRD compliance requirements, and working closely with industry experts to ensure product quality and export readiness. These efforts reflect a broader vision — to position South Africa as a global leader in medicinal cannabis.But the playing field is far from level.
Today, two distinct layers define the cannabis space.
The regulated sector comprises licensed operators who have spent years securing permits, building quality systems, and aligning with international pharmaceutical standards. Every stage — from cultivation to packaging — is tightly controlled, tested, and documented. Access to products is limited to patients under medical supervision and through approved channels.
In contrast, the informal market is growing unchecked. High-THC products are readily available through community networks, online stores, and wellness outlets — often without accurate labelling, dosage guidance, or age restrictions. This isn’t always due to negligence or bad faith, but rather the absence of clear, accessible pathways into the formal economy.
The result is a stark imbalance: while licensed operators shoulder the full burden of compliance and cost, unregulated vendors compete without constraint.This dynamic carries real consequences. For licensed businesses, it undermines competitiveness — particularly on price and market access.
For consumers, it poses risks around safety, dosage, and product integrity. For the country, it means lost tax revenue, stalled job creation, and weakened credibility as an international cannabis exporter.Yet, we believe there is still time to bridge the divide.
South Africa has a unique opportunity to create a regulatory model that is not only compliant and globally competitive, but also inclusive and reflective of our country’s social and economic realities.
Key to this transition are the recent policy shifts placing Good Agricultural and Collection Practices (GACP) under the direct oversight of the Department of Agriculture, Land Reform and Rural Development (DALRRD). GACP is no longer a guideline — it is becoming the minimum standard for all cannabis cultivated for medicinal use.
At the post-harvest stage, GMP standards will apply, raising the bar across the board for processing and packaging. This represents a critical step in linking agricultural integrity with pharmaceutical-grade product development.
These evolving standards make it essential to create structured, supportive pathways for informal growers and traders to enter the legal market. Where public health is at risk, stronger enforcement is necessary. But just as vital is the need for public education — particularly around product traceability, safety, and responsible access. Above all, those operators who have committed to compliance should be supported, not disadvantaged, by the broader policy environment.
South Africa is not alone in facing this challenge. Globally, countries are grappling with similar regulatory tensions. In Thailand, rapid liberalisation has led to market saturation and prompted a policy rethink. Germany’s adult-use reforms have been complicated by informal supply chains. In Canada — years after legalisation — the illicit market still holds significant ground. In New York, hundreds of informal retail outlets emerged before licensed dispensaries could launch, disrupting the rollout.
The global lesson is clear: regulation without balanced enforcement and credible access pathways breeds confusion, not sustainability.South Africa has the tools — and the talent — to do better.
Through genuine collaboration between government, licensed operators, and grassroots players, we can build a cannabis sector that protects consumers, honours legacy growers, and meets international benchmarks.
The goal is not to divide the industry into legal versus illegal — but to unify it under a shared, transparent framework that prioritises safety, rewards compliance, and fosters long-term growth.
As a company at the forefront of compliance, we recognise that the vast majority of participants in South Africa’s cannabis space do not have access to millions in capital to build licensed facilities or meet compliance requirements — which is why we are presently intentionally and in good faith designing a model to support and integrate smaller growers, informal operators, and emerging dispensaries into a formal, sustainable value chain that leaves no one behind.
This is not about closing doors. It’s about opening the right ones — and ensuring the path forward is fair, credible, and built to last.
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