Vaping as a means of cannabis consumption has taken off in South Africa in the past few years. Specialist vape shops are found in almost every town and the recent proliferation of “grey zone” cannabis outlets has further driven demand.  The real sales driver though has been the proliferation of web-sites and social media networks dedicated to vape promotion.

These outlets and platforms are serviced by an estimated 28 companies currently active in the South African vape space.  The major local players include Gold Leaf and Carnilinx, green tobacco leaf processor LTP and vape companies such as Vape Africa, Vaperite and the Vape Studio. The major international players are  JT International, British American Tobacco and Philip Morris.

Prescient and Market research says the South African e-cigarette market generated US$62,4 million in 2023 and is expected to grow over the next five years at an annual compound growth rate of 7,3% p.a. to reach US$100,7 by 2030.

A recent report by the Vapour Products Association of South Africa (VPASA) indicates that about 4% of the adult South African population are regular e-cigarette users, with 11.3% of adults having tried e-cigarettes at some point. However, the most notable concern regarding the use of e-cigarettes is among the youth.

To put it in context, the Department of Health released new information on tobacco consumption in South Africa on 13 June 2024. Based on the 2021 Global Adult Tobacco Survey (GATS) South Africa Report, the average daily South African smoker consumes 8.5 cigarettes a day, while tobacco use among adults in South Africa has reached 29.4%, which is 12.7 million people in total.

SA’s Smoking Habits

Approximately 21.2% of the adult population smoke tobacco daily (35.1% of which are men and 8.3% of which are women). About 4.6% of adults in South Africa smoke occasionally. When it comes to the age where individuals start using tobacco products, the average age of initiation is around 17.6 years old when consulting adults aged between 20 and 34. Around 33.9% of daily users smoke a cigarette within five minutes once waking up. The lowest prevalence of tobacco users can be found in Limpopo, while the highest is in the Northern Cape, followed closely by the Western Cape.

These statistics have driven anti-tobacco organisations to urge the government to pass the new Tobacco Products and Electronic Delivery Systems Control Bill. Keeping in mind that vaping is considered to be safer than smoking, the new bill is intended to combat the use of traditional cigarettes and to regulate the vaping market.

From a cannabis perspective, vaping is a discrete way to consume cannabis in public without affecting anybody else.  The proposed regulations do not appear to differentiate between what is being vaped, whether its tobacco or cannabis, but all this could change during the Bill’s passage through Parliament which is likely to be this year.

By introducing the Tobacco Products And Electronic Delivery Systems Control Bill, the government aims to change South Africa’s tobacco culture by:

• Banning vending machines that sell cigarettes.

• Declaring indoor public spaces and specific outdoor areas to be 100% smoke free.

• Requiring tobacco products to have plain packaging with clear and graphic health warnings and images.

• Banning the display of tobacco products at point-of-sale.

• Regulating and controlling electronic nicotine and non-nicotine delivery systems.

In anticipation of the new regulations VPASA says retailers should bear in mind the following guidelines to deter youngsters from accessing vaping products:

• Stores should have clear signs stating that they will make no sales to people who are under the age of      18.

• Posters must be displayed stating that requests may be made for a customer to show their ID.

• Online sales platforms should have age gateways that confirm a customer’s age before they can make a purchase

The new regulations will have far reaching consequences on the vape market. Stakeholders are concerned that new laws bringing e-cigarettes into the regulatory and tax net will “destroy the industry”.

According to Dublin-based Researchandmarkets.com, which recently published its outlook on the South African tobacco market, one of the main concerns of industry players is that the sector is already dealing with a large illicit economy and that by intensifying tobacco controls, illicit sales will become entrenched rather than discouraged. In short, the black market will continue to flourish.

To date though,  e-cigarette sales have been strong and have eaten into the traditional tobacco market. But competition is increasing, raising stakeholder concern that the playing field is becoming too overcrowded. The market itself is changing, with a major shift from refillable cartridge and tank devices to cheaper, disposable units.

This is Researchandmarkets.com view of the South African vape market:

Key Market Trends

• Closed, disposable vape devices are driving growth and the biggest part of the e-cigarette market.

• E-liquids became subject to excise duties from mid-2023.

• Illicit cigarette sales have increased and dominate the market.

• Increased competition among vape companies is leading to reduced prices.

• The number of smokers in South Africa appears to be increasing.

• There is declining demand for, and planting of, tobacco leaf, especially by small contract farmers.

• Vape companies incorporating cannabis flavours into e-liquid.

Opportunities

• The  arrival of new vape products and retailers show there is opportunity in the market.

• The vape market is growing.

Challenges

• Illicit tobacco sales are entrenched in the market.

• Proposed new tobacco controls legislation will significantly impact tobacco and vape companies.

Market Outlook

• The rapid growth of illicit cigarettes and looming stricter tobacco marketing controls mean the outlook for the industry is far from positive.

• The industry fears that increased excise duties will further entrench the illicit economy.

• A key factor is whether alleged widespread practices of tax avoidance will be addressed.

• The vape market is growing strongly, but excise duties introduced in 2023 and proposed regulation is causing concern about profitability.

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