The Committee met virtually to receive briefings on the National Cannabis Master Plan from the Department of Agriculture, Land Reform and Rural Development (DALRRD) and the Department of Trade, Industry and Competition (DTIC).
Both departments had also prepared to provide input on the Cannabis for Private Purposes Bill, which the Committee was processing. However, it transpired that there had been a miscommunication – the Committee considered it inappropriate for departments to provide independent submissions on legislation which they had helped draft and which should reflect the position of a unified Cabinet. Instead, the Committee was interested in hearing about the Cannabis Master Plan, so that it could approach the Cannabis Bill with a broad understanding of the cannabis sector and government’s approach to it.
DALRRD characterised the Cannabis Master Plan as a strategic framework for developing the domestic cannabis (hemp and dagga) industry. It involved at least ten government departments, working across nine pillars to establish a regulatory framework, strengthen enforcement, increase investment, and expand growing and manufacturing capacity. The Master Plan proposed to integrate small growers into formal cannabis value chains by organising them into licensed groups and providing them with technical and financial support. According to estimates, a formalised cannabis industry could be worth R28 billion and could create between 10 000 and 25 000 jobs. However, stakeholders had flagged several significant problems that still had to be ironed out in the Master Plan. These included licensing and confusion about hemp permits; illegal products on local markets; high barriers to entry, including high licensing costs; the inclusion of existing dagga growers and traders; and the role of the provinces.
DALRRD and the Deputy Minister emphasised that the Master Plan was still a draft and a work in progress, and that further detail and wider consultations were to follow. The strategy’s development had been complicated by the need to grapple with norms, arrangements and partnerships that had been established before government had entered the sector. The fact that the industry was fragmented and largely operated underground also made it difficult to consult with all stakeholders.
DTIC reported on its role in the Cannabis Master Plan, whose manufacturing and product development pillar it led. One of its primary responsibilities was to develop a cannabis commercialisation policy, which would prioritise four sectors: medicines, cosmetics, textiles, and food and beverages. Its other primary responsibilities were to facilitate the inclusion of previously disadvantaged community enterprises, and to develop markets and incentives to help companies participate in industrialisation and commercialisation. In this regard, it would seek to support small-scale cannabis farmers – who numbered over 900 000 in South Africa – in overcoming barriers to entry. One of the most significant barriers was the very high cost of registration and licenses, which could run into millions of rands.
DTIC identified three central issues that had to be expedited. First, the Department of Justice and Constitutional Development had to work to clarify and reconcile various pieces of legislation. Apart from finalising the Cannabis for Private Purposes Bill, it urgently had to remove hemp from the list of banned substances in the schedules to the Drugs and Drug Trafficking Act. Second, government had to facilitate access to licenses for medical cannabis production, which would be issued by the South African Health Products Regulatory Authority. At the same time, DALRRD had to resolve legislation around access to non-medical cannabis. Third, ongoing research and development was needed, including on standards, to guide the industrialisation process.
The Committee had two central concerns about the Master Plan. Firstly, guided by comments that members of the public posted on the virtual platform during the meeting, Members concluded that there had not been sufficient consultation on the Plan, especially with non-governmental stakeholders. They enjoined government to expand the role of those who already grew and sold cannabis – even if illicitly – and the role of the Rastafari community.
Secondly, and relatedly, Members were concerned that the benefits of the policy would primarily accrue to large corporations, if those corporations were allowed to dominate the market and exclude the small operations that currently participated in the sector. Although Members welcomed the economic opportunities presented by the commercialisation of cannabis, the Chairperson said that the example of exploitation by multinational mining companies should serve as a grave warning. The Committee urged that small growers and rural communities should be protected and actively included. In this vein, Members asked about plans for education and communication, and about plans for the allocation and costing of licensing and permits.
Members asked DTIC about special incentives that might be offered for cannabis production, and were also interested in the possibility that cannabis could be used to treat COVID-19. They exhorted speed in implementing the Master Plan.
The Chairperson also planned to propose to the House Chairperson that a broad multi-party oversight committee should be assembled to monitor progress on the Cannabis Master Plan.
The Cannabis Bill did not directly or comprehensively respond to the Master Plan, because it dealt with private use rather than commercialisation – a disjoint which one Member referred to as the elephant in the room. Indeed, DALRRD suspected that implementing the Master Plan might require further policies and legislation. However, the Cannabis Bill was linked to a web of complex and technical cannabis-related laws and regulations, spanning several departments. The Committee would therefore need to draw on those departments’ expertise. It requested that DALRRD and Department of Health officials should attend each of the Committee’s future meetings on the Cannabis Bill, starting with the three days of public hearings planned for next week.
The Chairperson said that the Committee was meeting to receive briefings on the National Cannabis Master Plan from the Department of Agriculture, Land Reform and Rural Development (DALRRD) and the Department of Trade, Industry and Competition (DTIC). The Committee wanted to get a broad understanding of the cannabis industry before it began processing, and hearing public submissions on, the Cannabis for Private Purposes Bill.
He welcomed Ms Rosemary Capa, Deputy Minister of Rural Development, joking that he knew her to be well-versed in the subject matter. DALRRD would present first, because it was the overall leader of the Cannabis Master Plan.
DALRRD briefing: National Cannabis Master Plan
Deputy Minister Capa conveyed an apology from Ms Thoko Didiza, Minister of Agriculture, Land Reform and Rural Development, who was in a Cabinet cluster meeting.
She said that DALRRD appreciated the opportunity to brief the Committee before the Cannabis Bill was processed, and to help unpack some of the issues in the Bill. She also appreciated that the Committee had been able to deal with the Bill timeously. She knew how difficult it was to reach this stage, and DALRRD did not take this for granted in its partnership with Parliament. Such a bill had long been awaited in South Africa, and people were really looking forward to it – to the extent that they were creating “confusion.” The cannabis industry had operated illicitly underground for many years, and DALRRD was very pleased that the new legislation would allow government to direct and regulate the industry.
The Chairperson thanked Deputy Minister Capa for attending, and congratulated her on her new role following the recent Cabinet reshuffle.
Deputy Minister Capa handed over to the officials who would present on behalf of DALRRD.
Cannabis Master Plan: background
Mr Thabo Ramashala, Directorate: Plant Production, DALRRD, presented on the Cannabis Master Plan. The central aim of the Master Plan was to provide a framework for the establishment, growth, and development of the domestic cannabis industry – that is, the industry for both hemp and dagga products.
Cabinet had decided in July 2019 that South Africa needed a national strategy for industrialising and commercialising dagga. Minister Didiza had been appointed to convene this process, and the Master Plan had been developed under the guidance of an interdepartmental committee that also included various universities and government agencies.
The Master Plan also drew on the experiences of other African countries and of major cannabis-producing countries, such as Canada, Portugal, and Uruguay.
Current legal status of the cannabis industry
Mr Ramashala said that rural communities in South Africa had been cultivating and selling dagga for centuries, mostly for recreational purposes, despite legal prohibitions against doing so. The illegal dagga market had supported livelihoods and contributed to rural economic development. Reportedly, dagga had also been illegally exported from the country.
Cannabis and related matters were regulated by the Medicines and Related Substances Act and the Drugs and Trafficking Act. Mr Ramashala surveyed the amendments that had been made to legislation and regulations in line with the Master Plan, but highlighted that the Drugs and Drug Trafficking Act still posed challenges. DALRRD believed that new policies and legislation might have to be developed to provide for the commercialisation of cannabis.
Economic potential of the cannabis industry
Mr Ramashala discussed the uses of cannabis in medicine, industry, food, and recreation. Given these uses, it was estimated that cannabis could become a R28-billion industry in South Africa. Between 10 000 and 25 000 jobs could be created across the value chain. The cannabis sector could also attract domestic and foreign investment, develop small businesses, and increase exports.
Currently, the following challenges faced the cannabis sector:
- Legislative restrictions;
- Lack of formal seed supply systems;
- High barriers to entry;
- Negative public perception;
- Lack of manufacturing capacity;
- Limited investments in research and technology development programmes;
- High fragmentation;
- Proliferation of illegal products; and
- Threat of takeover by big, well-capitalised corporations and pharmacy groups.
Framework of the Cannabis Master Plan
The Master Plan required a collaborative and integrated government approach, and involved many departments aside from DALRRD and DTIC. Among them were the national Department of Health (NDOH), the Department of Justice and Constitutional Development (DOJCD), the Department of Small Business Development (DSBD), the Department of Science and Innovation (DSI), the Department of Higher Education and Training (DHET), the Department of Basic Education (DBE), the Department of Employment and Labour (DEL), Department of Communications and Digital Technologies (DCDT).
Mr Ramashala provided an overview of each of the nine pillars of the Master Plan, including the central aims and intervention measures envisaged under each. The pillars were:
- Pillar 1: Effective regulatory systems (led by NDOH, with DOJCD);
- Pillar 2: Sustainable seed supply systems (led by DALRRD, with DSBD);
- Pillar 3: Research and technology development (led by DSI, with DTIC);
- Pillar 4: Producer support systems (led by DALRRD, with DSBD);
- Pillar 5: Market development (led by DTIC, with DSBD);
- Pillar 6: Supplier development systems (led by DSBD, with DTIC);
- Pillar 7: Manufacturing and product development (led by DTIC, with DSI and DSBD);
- Pillar 8: Education and training (led by DHET, with DBE and DEL); and
- Pillar 9: Communication and awareness (led by Government Communication and Information System (GCIS), with DCDT).
Developmental pathways for cannabis
Mr Ramashala discussed the developmental pathways for the hemp value chain, the medicinal cannabis (dagga) value chain, and the recreational cannabis (dagga) value chain, highlighting the growth and investment opportunities at each stage. On recreational dagga, however, he noted that the new legislation would only sanction private use, ruling out commercial value addition and marketing. However, there were nonetheless opportunities for investment in the production inputs for recreational dagga – such as in seed and breeding companies, nurseries, and chemical companies.
He described the Master Plan’s model for including smaller growers into the hemp and dagga value chains. Small growers would operate on their own farms, but would agree to work together at a central processing facility. Government would facilitate this by issuing permits to groups of small growers and by providing infrastructure, seeds, and other production inputs. Once processed, the hemp and dagga would be used in the manufacturing of various products – which was expected to be driven by private sector investment, and the outputs of which would be sold on local or export markets.
Consultation processes and other structures
Mr Ramashala said that the fifth version of the Master Plan had been subject to consultation following its endorsement by the inter-ministerial committee (IMC) and ministerial advisory committee. He listed the stakeholders with which government had consulted in the first half of 2021.
So far, major issues raised by such stakeholders included:
- Licensing challenges and confusion regarding hemp permits;
- Illegal products on the local markets;
- High barriers to entry, including high licensing costs;
- Inclusion of the current dagga growers and traders; and
- The roles and responsibilities of provinces.
He also described the structures that would be responsible for guiding and monitoring the implementation of the Master Plan.
Cannabis for Private Purposes Bill
Dr Julian Jaftha, Chief Director: Plant Production and Health, DALRRD, was prepared to lead the second part of DALRRD’s presentation, which would provide input on and suggest amendments to the Cannabis Bill.
However, the Chairperson asked whether DALRRD had not been consulted on the Bill during the drafting process. Had it not participated in the drafting process?
Dr Jaftha replied that DALRRD had participated and had provided input on the draft Bill. However, it was his understanding that there had been significant changes to the Bill since then.
The Chairperson asked for confirmation that DALRRD had been a part of the process leading up to the Bill’s approval by Cabinet.
Dr Jaftha confirmed that it had been a part of that process and had provided initial input on the Bill during that stage. However, in DALRRD’s understanding, the Committee had asked it to provide input on the Bill in its current form. The second part of the presentation spoke to that request, although he would follow the Chairperson’s lead.
The Chairperson said that there had been challenges in communication between DALRRD and the Committee secretariat. The Committee was most interested in DALRRD’s presentation on the Cannabis Master Plan and its implementation. A bill was a Cabinet proposal to Parliament, and was taken to represent the views of all members of Cabinet. Since DALRRD had participated in the Cabinet process, it should have raised any issues during that process. It should not raise them now after the Bill had been endorsed by Cabinet. The current meeting should not become a public hearing on the Bill. Members of the public would be afforded the opportunity to comment on the Bill precisely because they had not participated in the Cabinet process.
Dr Jaftha agreed with the Chairperson and did not present DALRRD’s views on the Cannabis Bill.
Mr W Horn (DA) said that he was noting some of the written comments that members of the public were posting on the virtual platform’s chat function. Had the consultations on the Cannabis Master Plan involved any form of interaction with people who already grew and distributed cannabis products? From Mr Ramashala’s description of the consultation process (see slide 23), he got the sense that it had been very much an internal government process. If that was the case, could DALRRD explain why it had taken that approach?
Mr Horn said that he could understand, to an extent, why such an approach would seem reasonable. Until very recently, people who grew cannabis had done so illegally. Yet, even if it was illegal, there was an established cannabis industry already worth millions of rands. So developing the Master Plan required a difficult “balancing act” between these factors. It was not as though the Master Plan aimed to create a new industry out of nothing. It aimed to regulate and develop an existing industry. He could not understand how government could finalise a Master Plan without consulting stakeholders from that existing industry, even if their operations were or had been illegal.
Similarly, Adv S Swart (ACDP) said that he appreciated the comments members of the public were posting on the chat. These provided helpful guidance to Committee as it begun, “under some pressure,” to deal with the cannabis legislation. From the public’s comments in the chat, it appeared that there had not been sufficient consultation on the Cannabis Master Plan. Of course, it would not be desirable to delay the policy extensively. But what consultation had taken place in drawing up the Master Plan?
Mr X Nqola (ANC) said that the presentation had not mentioned any consultation with the Rastafari community. DALRRD had to ensure that they were consulted. It was common knowledge that the Rastafari community had historical and cultural links to cannabis.
On these concerns about consultation, Dr Jaftha said that it was important to appreciate that the Master Plan was still a draft, and not the final draft. DALRRD had received approval to consult with stakeholders about the current version of the Master Plan, but the Master Plan had not yet received full approval. Mr Ramashala had listed various categories of stakeholders who had been included in consultation workshops thus far (see slide 23), but this was not an exhaustive list, because consultations were not complete. The list did include many government departments, many of which also belonged to the inter-departmental committee that had drafted the Master Plan. However, the intention was not to limit consultation to internal consultation with government entities.
Dr Jaftha said that DALRRD had consulted with those who it knew were involved in the cannabis industry. It was aware that it had not thereby consulted with everybody who was involved in the industry. The cannabis industry was not like other industries, like the grain industry, which had a specific centralised body to represent them during consultations. Importantly, the Master Plan had been tabled at the National Economic Development and Labour Council (NEDLAC). The NEDLAC process would involve joint consideration of the Master Plan by government and representatives of the sector itself. Of course, there would still be challenges in determining who should represent the sector. The NEDLAC process also required community involvement, and communities were represented.
Dr Jaftha concluded that, because the Master Plan was not finalised, there were still opportunities to consult more widely. He had noted comments in the chat from members of the public, and hopefully DALRRD could involve some of those individuals and groupings, a few of whom it had already consulted with in the past.
Mr Ramashala confirmed that the presentation listed the entities which had been consulted thus far. Not only government departments but also growers and others involved in the industry had been consulted. Because the cannabis industry was highly fragmented, DALRRD had just been “asking around,” and consulting with anybody it found. In fact, its meeting with industry – which had included businesses and growers – had been the biggest. Close to 400 people had participated in that session. Of course, DALRRD could not claim to have included everybody, but it had heard from a broad section of the industry, from growers to sellers to importers and exporters. Rastafari communities had also been represented at that session. Beyond that, there had been several webinars, through which DALRRD had reached other stakeholders. And, as Dr Jaftha had said, the NEDLAC process was ongoing. In sum, DALRRD had tried its best – given the fragmented nature of the industry – to stretch itself in consulting with a wide range of stakeholders. It would continue to rely on its social partners to convey its message widely so that it could reach everyone, including rural growers who might not have access to the internet.
Dr W Newhoudt-Druchen (ANC) said that she did not understand why DALRRD had not presented its input on the Cannabis Bill, and asked for clarification.
Dr Newhoudt-Druchen noted that Dr Jaftha had told the Chairperson that DALRRD had been involved in the initial stages of the drafting of the Cannabis Bill. Should that be taken to imply that DALRRD had not been involved in later stages, and in finalising the current version of the Bill? If so, why had DALRRD not been involved throughout? The Chairperson was correct that stakeholder departments should be involved up until the end of the drafting process.
Dr Newhoudt-Druchen said that the Committee’s portfolio would focus on the local growers of cannabis, who should benefit from this policy and legislation. The benefits of economic policies of this kind often accrued only to multi-million-rand corporations, not to local producers. How would DALRRD ensure that local growers and producers would benefit most, instead of large corporations?
Similarly, Mr Nqola said that it was true that families had often made their livelihoods from cannabis, and the market had to be legalised and legitimised if it was to fulfil its economic potential. However, the government also had to be wary of allowing big business to abuse the policy. If cannabis was going to become a key component of economic growth, big business had a vested interest in controlling the industry. Corporations must not be allowed to exploit rural communities and take over their cannabis farms and fields. DALRRD had to ensure that it gave the necessary support to those who already grew and sold cannabis, even if they had been doing so illegally. Financial resources, as Mr Ramashala had mentioned, were needed to help people not only with growing cannabis but also with adding value to the final product.
Ms N Maseko-Jele (ANC) said that she was also concerned about domination by big business. In townships and rural areas, including in the area where she had grown up, people grew and sold dagga for income, though illegally. She strongly agreed with Mr Nqola that those people had to be considered and consulted before the policy was finalised. She worried that inaccessible structures and high licensing fees would prevent those people from having the opportunity to improve their lives.
Dr Jaftha replied that inclusivity was a central objective of the Master Plan and was accommodated in its various pillars. In particular, the Master Plan intended to avoid allowing large companies to dominate the cannabis sector. These concerns would be addressed through the “nitty-gritty” details – that is, through the action plan that would be developed for implementing the Master Plan. He emphasised again that, although the drafting had come a long way, the Master Plan was not yet finalised.
Mr Ramashala said that the fourth pillar of the plan, sustainable producer support systems, would provide assistance to local growers and thereby address Members’ concerns. DALRRD was aware that there were individuals and communities who had been participating in the cannabis industry for many years. It would be a “disgrace” for such people to be excluded from the industry once it was formalised. DALRRD hoped to ensure that everybody participated. For example, he had discussed the Master Plan’s model for integrating smaller growers into hemp and dagga value chains (see slide 22). Individual provinces had also shared their ideas about how to include small growers in their provinces. Work would have to be done, but DALRRD was equipped with a model and with proposals for implementation. The task teams – which would be responsible for supporting the implementation of the various pillars – would help to put the details together.
Mr Nqola said that it was important for everybody to agree that the cannabis industry had, for some time, been operating underground. He was happy that the Master Plan established a licensing system. If the black market in cannabis remained, it would defeat the purpose of making cannabis a key economic pillar, especially in the time of economic reconstruction and recovery. However, what qualified someone to attain a license to grow or sell cannabis? Had departments or the IMC developed guidelines or regulations that set out the criteria?
Mr Ramashala replied that anyone in South Africa who met the requirements set out in the guidelines would receive a license or permit. For example, if someone wished to grow cannabis, he had to have access to land, whether owned, leased, or borrowed. There were guidelines that people could follow if they wanted to obtain a license or permit, and DALRRD would try to assist anyone who wanted to participate.
Mr Nqola noted that Mr Ramashala had mentioned a list of medical conditions that might be treated with cannabis. The relevant slide included COVID-19 as such as a condition, but followed by several question marks (see slide 5). Why?
Adv Swart said that, like Mr Nqola, he was interested in the reference to cannabis as a potential COVID-19 treatment. He was surprised that NDOH had not mentioned this when it had met with the Committee the day before, and he wanted the Committee to investigate further. It could be that NDOH had the same attitude towards cannabis treatments as it did towards Ivermectin – it did not want to “go down that route.”
Mr Ramashala replied that the use of cannabis in treating COVID-19 was still being researched, with work ongoing. DALRRD was very excited that, according to DSI, there were promising preliminary results. The presentation indicated this possible use with question marks because there were still many questions to answer. For example, would a COVID-19 treatment be pure cannabis, or would the cannabis be combined with other plants or compounds?
Mr Nqola concluded that the Cannabis Master Plan looked “great” overall, and seemed to have the potential to coordinate and regulate cannabis policy. However, there were a few issues that had to be dealt with before the Committee could say that it supported the Master Plan.
Adv Swart said that the obvious “elephant in the room” was that the Cannabis Bill did not deal with the commercialisation of cannabis or with any of the Master Plan’s other central elements. The Bill before the Committee only decriminalised the private use of cannabis. It did touch on hemp and some other broader issues, which was why it was helpful for the Committee to hear from other departments like DALRRD. However, given that the Bill was so narrow in comparison to the Master Plan’s broad commercial approach, he agreed with Ms Newhoudt-Druchen that the Committee should consider the second part of DALRRD’s presentation, in which DALRRD had planned to provide input on the Bill itself. The Committee did not have to go through the presentation in its entirety, but it should be aware of DALRRD’s concerns about the Bill.
Adv Swart said that he appreciated the need for regulation, and thus for licenses and permits. However, this could open the door for politically connected people to have an unfair advantage in obtaining licenses – especially since this was a newly formalised industry, so the field was wide open. Abuse, corruption, and fraud in the allocation of licenses was a major concern for Parliament generally. He was not casting any particular aspersions on DALRRD, but one DALRRD process – land reform – had been identified in many hearings, and even by the Special Investigating Unit, as a site of corruption. How would DALRRD prevent corruption in the allocation of licenses and permits? What checks and balances would it implement?
Mr Ramashala replied that abuse and corruption of the licensing system was indeed a matter of great concern. Everyone who qualified for a license or permit should have the chance to obtain one. DALRRD would ensure that the process was not marred by corruption.
Adv Swart said that it was important to take a broad perspective of the cannabis industry and cannabis regulations. For example, while DOJCD administered the Drugs and Drug Trafficking Act, NDOH administered the Medicines and Related Substances Control Act. There was a lot of commercial potential in medical cannabis and hemp, including industrial hemp. He was concerned that access to cannabis for these purposes – that is, for the purposes of commercialising hemp and medical cannabis – would be inhibited by thresholds set by other departments, such as NDOH, in their own laws and regulations. The Committee had to look into that from an oversight perspective. It could not evaluate the cannabis issue without looking into many different departments.
Adv G Breytenbach (DA) said that her concerns had been covered by Mr Horn.
Ms Maseko-Jele said that most of her concerns had also been covered. However, she had a further question on the consultation issue. Mr Ramashala had discussed consultation with other countries during the development of the Master Plan. However, he had seemed to focus on consultations with countries in Europe and the Americas. She had not heard him elaborate on the insights that had been gained from other African countries, although he had mentioned Lesotho’s medicinal cannabis programme. What information and ideas did other African countries contribute on this issue?
Mr Ramashala replied that the approach of the Master Plan was not to “reinvent the wheel,” and therefore to look at and learn from what other countries had done, what challenges they had faced, and what successes they had achieved. The drafters of the Master Plan had considered African countries which had started moving towards commercialising cannabis, such as Nigeria, Kenya, and the Democratic Republic of Congo. At this stage, however, most African countries were focusing on recreational cannabis. That was why he had singled out Lesotho, which had a medical cannabis initiative.
Mr Ramashala assured Members that all countries were being looked at – Asian countries, too. The Master Plan would not “copy-and-paste” the cannabis policies of foreign countries. The key was to take international best practices from all over the world, and adapt them to South African conditions – South Africa had its own challenges and its own history with cannabis.
Ms Maseko-Jele said that education and awareness were also important. Clearly, the Master Plan spanned many departments, but the departments the Committee was meeting with led the plan. How were they pursuing education and awareness on this issue? Were they working on a communications strategy? The relevant information had to reach the people timeously, so that they could begin to prepare themselves. That way, when the policy was legislated, they would know exactly where to go, what to do, and how to get help in capitalising on this opportunity.
Mr Ramashala replied that DALRRD agreed that education, training, and awareness were important. This was acknowledged in the pillars of the Master Plan. Communities should be well-educated and well-informed – they should not be misled by “fake news” about the cannabis industry. Thus the eighth pillar of the Master Plan was education and training. This pillar was being led by DHET, which had met with DALRRD several times and which understood DALRRD’s aims and concerns. DHET had brought in DBE for support. The ninth pillar of the Master Plan was communication and awareness, led by GCIS. A communications plan had been developed, and various departments had worked on articulating the kind of message that had to be conveyed to the public.
Mr Ramashala concluded that DALRRD hoped it was on the right track. This was a new industry, and DALRRD expected to learn a lot of lessons as the policy progressed. However, moving forward, it was committed to correcting any shortcomings that might become apparent.
Deputy Minister Capa said that she wanted to emphasise that the Master Plan was a work in progress, as Dr Jaftha had said. She appreciated that during this consultation stage, stakeholders like the Committee were highlighting critical areas that DALRRD could not overlook. DALRRD appreciated the advice and would attend directly to the concerns raised by Members.
Deputy Minister Capa agreed with Members that the government was entering a sector which had already been operating for many years. The government therefore had a lot to learn from those who had experience in the sector. Another complicating factor was that there had been no particular regulations on the use of cannabis in place to fill the gap created by the Constitutional Court’s judgement in Minister of Justice and Constitutional Development and Others v Prince. In this gap, people from outside South Africa had come in and had held several conferences to educate and engage people and to establish local structures. The government had not been involved in that. As it moved forward with the Master Plan, the government also had to undo some of the “evils” that had arisen under a lack of regulations in the past, such as fraud. The consultation process had to involve delving into arrangements and norms that had been established before government had entered the sector. For example, in some well-known areas, like Port St Johns, there was an established illegal cannabis industry, with crops already under irrigation, and with consortia of organisations which claimed legitimacy.
Deputy Minister Capa said that DALRRD, along with DTIC, was in the process of organising communities and small businesses. Small growers had to be organised into something resembling a consortium or cooperative – an entity which could be funded, as well as licensed. If they continued to operate alone, they were “vulnerable” and might not be able to access the opportunities extended to cooperatives. DALRRD was busy seeking out these small growers far and wide. Some were still hesitant to admit to involvement in the cannabis industry, for fear that they would be arrested. She urged stakeholders to come forward so that DALRRD could engage thoroughly with the sector. She did not want for government to travel a mile and then look back and see that it had left some people behind because they had not spoken up. She agreed with Members about the importance of learning from and applying local experience and expertise. DALRRD was not forgetting the magnitude of indigenous knowledge in this area.
The Chairperson invited Mr Mcebisi Skwatsha, Deputy Minister of Land Reform, to add any remarks he wished to add.
Deputy Minister Skwatsha said that he had just joined the Committee meeting after leaving another meeting. Deputy Minister Capa had made valuable points and he had nothing to add.
Adv Swart thanked DALRRD delegates for their explanations, especially about Lesotho’s medical cannabis programme and the potential use of cannabis in treating COVID-19. He had seen a related report yesterday and would like further information about the medicinal cannabis issue.
Adv Swart said that the Committee would be dealing with cultivation offences through the Cannabis Bill. DALRRD was best suited to advise the Committee in this regard, such as on the technical details around the size, number, and maturity of plants. He thought it was very important that DALRRD should be involved in advising the Committee on the regulations and addressing the concerns that people were expressing about the Bill. The Committee needed science-based evidence for the definitions and cultivation offences proposed in the Bill. DALRRD could probably be very helpful, because it administered other related legislation. He suggested that the Committee should engage and closely consult with DALRRD and the science councils on cannabis-related regulations.
Adv Swart said that one area where he would like clarification was on DALRRD’s definition of “hemp.” According to DALRRD, hemp was a plant product, cultivated for agricultural or industrial purposes, of which the leaves and flowering heads did not contain more than 0.2% tetrahydrocannibol (THC). What was the scientific justification for this definition, and could DALRRD provide scientific evidence to support it? In the first place, would not the requirement of agricultural and industrial purposes have implications for the commercialisation aspect of the Cannabis Master Plan, by limiting varieties of hemp products that could be produced? Second, DALRRD said that hemp had to contain 0.2% THC or less. That was clearly a very low psychoactive content, and hemp was certainly a low-THC plant, but what had determined the selection of this specific THC threshold? Could DALRRD provide local and international evidence to support the imposition of this threshold? Moreover, what happened if someone grew a massive crop whose plants turned out to have a THC content of 0.3% – did he have to destroy the whole crop? What degree of flexibility could be incorporated to prevent commercial losses of that kind? He was not an expert on the subject, but a member of public had said in the chat function that the regulation was not realistically sustainable. He had raised such issues the first time the Committee had heard about the 0.2% THC threshold.
Adv Swart said that in yesterday’s meeting he had expressed his concern about the effects of cannabis on adolescents. However, this was a separate issue. When regulations were developed for the Cannabis Bill, details like THC contents had to be consistent with the provisions of DALRRD regulations and the Medicines Act – and surely they should also take into account the Master Plan’s commercialisation agenda. He wanted the Committee to engage with this further. If DALRRD could not present the relevant research now, it could respond in writing.
The Chairperson reminded members of public – one of whom had raised her hand to speak on the virtual platform – that the current discussion was confined to Members and government departments. The intention was for the Committee to get a broad understanding of the cannabis industry before it turned to focus on the Cannabis for Private Purposes Bill. Public hearings would be held from Tuesday to Thursday next week, and would give members of the public an opportunity to express their views. So far, 27 organisations had applied to make oral submissions. Three days had been reserved, because public hearings were an important, and constitutionally protected, part of the legislative process.
The Chairperson said that he had a request to make of DALRRD, stemming from Mr Swart’s comments and he thought on behalf of all Members. He would like DALRRD officials to attend Committee meetings in the future – from Tuesday’s public hearings all the way up to the clause-by-clause deliberations on the Cannabis Bill. The Committee would make the same request of NDOH. In considering the Bill it would need to continuously call upon the departments’ scientific, technical, and legal expertise. He asked Deputy Minister Capa and Deputy Minister Skwatsha whether this request was reasonable.
Deputy Minister Skwatsha replied that it was a fair request, and could enhance the Committee’s work. He would have to confirm with the Committee later, after the request had been considered, but he did not think there would be any reason to object.
The Chairperson said that everybody involved in the process had to remember that “time waits for nobody.” Mistakes had been made in the past in the gold and platinum sectors. Big multinational corporations had come in, and South Africans had woken up to find that they had nothing left. It was important to be thorough and consult widely, but it should be borne in mind that time waited for nobody. The country could not afford to be casual about an industry which could employ up to 25 000 people, especially when it was facing serious socioeconomic problems. Cannabis was “a golden opportunity.” South Africa had to grab it and ensure that it moved speedily, to revive its economy and address health issues “using what God has given us.”
The Chairperson said that he Committee wanted to be continuously appraised of developments around the Cannabis Master Plan, but did not want to usurp the oversight roles of other committees. Therefore, at a later stage, the Committee would propose to the House Chairperson that DALRRD should appear occasionally before a multi-party committee, composed of representatives from various portfolios including health, trade and industry, police, and agriculture, as well as justice. The Committee wanted tighter monitoring of DALRRD’s progress, through regular briefings. The next time the Committee met with DALRRD, it would want to hear not only what the plan was, but also what detailed programmes were in place to implement the plan. How was the government going to tap into this resource – cannabis – that was available to the people?
The Chairperson excused Deputy Minister Capa and Deputy Minister Skwatsha from the remainder of the meeting.
Mr Swart said that he had a suggestion to make before the Ministry left. He thought the Ministry and the Chairperson would probably discuss the details of the Chairperson’s request later, but he thought it would only be necessary for DALRRD to send one or two officials to sit in on the Committee’s meetings on the Cannabis Bill. DALRRD had sent a very large team to the current meeting, which would not be necessary in future meetings. He was sure the officials had other work to do.
The Chairperson agreed. To have 100 officials sitting in the Committee meeting while they could be doing other work would not be a strategic use of government resources.
DTIC briefing: National Cannabis Master Plan
Ms Ncumisa Mcata-Mhlauli, Chief Director: Agro-Processing, DTIC, presented on behalf of DTIC. She said that DTIC would make two presentations: she would speak to the National Master Plan, and the Consumer and Corporate Regulation Division would provide input on the Cannabis Bill. Because Mr Ramashala had already discussed the Master Plan in some depth, the former presentation would focus on commercial opportunities in the cannabis industry and on DTIC’s role in implementation.
The Chairperson said that he would ask DTIC the same question he had asked DALRRD. Had DTIC not participated in drafting the Cannabis Bill? The Bill had gone through an entire process on the executive side – from the director generals to the subcommittees to Cabinet – before arriving at Parliament. Had DTIC not been consulted during that process?
Ms Mcata-Mhlauli replied that DTIC had been consulted and had provided input on the Bill.
The Chairperson said that the Bill was a collective proposal from the executive to Parliament. The Minister had proposed the Bill on behalf of Cabinet. It would be inappropriate for departments to make individual submissions to Parliament after having participated in collaborative processes on the executive side. In line with Adv Swart’s concerns, DTIC would be invited to participate when the Committee embarked on clause-by-clause deliberations. In the current meeting, however, the briefing should focus on DTIC’s contributions to the Master Plan and its implementation.
The Committee adjourned for a five-minute break.
DTIC role in the Cannabis Master Plan
When the meeting reconvened, Ms Mcata-Mhlauli said that DTIC belonged to the intergovernmental committee that was developing the Cannabis Master Plan. It also led the manufacturing pillar. DTIC’s primary responsibilities under the Master Plan were to develop:
- A commercialisation policy to leverage the industrialisation of cannabis and hemp (though not for recreational use);
- A policy, legal and regulatory environment for the inclusion of previously disadvantaged community enterprises; and
- Markets and incentives to help companies industrialise and commercialise hemp and cannabis production.
On commercialisation, the Master Plan prioritised four sectors: medicines, cosmetics, textiles, and food and beverages.
On the other points, Ms Mcata-Mhlauli said that small players had to be supported in overcoming barriers to entry. Registration alone – that is, obtaining licenses and permits – could cost millions of rands. The requisite application to the South African Health Products Regulatory Authority (SAHPRA) cost almost R34 000 alone. This issue was being discussed with SAHPRA and NDOH.
Ms Mcata-Mhlauli discussed a detailed list of the strategic interventions for which DTIC was responsible or partly responsible under the Master Plan, outlining the time frame for each. As well as leading the manufacturing and product development pillar, DTIC had responsibilities under the regulatory systems, market development, and enterprise and supplier development pillars.
Moving forward, DTIC believed the following three issues should be prioritised:
- Hemp – Resolve legislation (under DOJCD);
- Licensing – Resolve legislation for non-medical cannabis access (under DOJCD), and develop accessible means for issuing licenses for medical purposes by SAHPRA; and
- Research and development, including standards – Ongoing research to inform the industrialisation of the cannabis industry (led by DALRRD and DTIC).
On legislative issues, Ms Mcata-Mhlauli said that cannabis remained a prohibited drug in terms of the Drugs and Drug Trafficking Act, and the schedules to that Act were currently not in alignment with the schedules to the Medicines Act. DOJCD had to expedite the removal of low-THC cannabis (that is, hemp) from the list of banned substances in the Drugs and Drug Trafficking Act schedules. It also had to finalise the Cannabis Bill, in order for government to comply with the Constitutional Court’s judgement on private cannabis use.
On licensing, Ms Mcata-Mhlauli said that DALRRD and NDOH would be the primary regulators of cannabis products. DALRRD would be responsible for all matters relating to the cultivation of low-THC, non-medical cannabis products. However, the cultivation, manufacture, distribution, import, and export of other THC- and CBD-containing products required a license issued by SAHPRA, in terms of Section 22C of the Medicines Act. In addition, the manufacture, import, and export of THC-containing medical products required a permit used by the NDOH Director General, in terms of Section 22A(9) of the Medicines Act.
In conclusion, Ms Mcata-Mhlauli thanked DALRDD for being the “captain” of the Master Plan. The cannabis industry was difficult, because it was an established industry from the perspective of existing growers but an infant industry from the perspective of manufacturing. She believed that the government was heading in the right direction, including through the Cannabis Bill.
Dr Newhoudt-Druchen asked whether the costing for the licenses and permit had already been decided. Obviously, small farmers could not be charged the same fee as large companies.
Ms Mcata-Mhlauli replied that the costing was still under discussion. Currently, as she had mentioned, the licenses were extremely unaffordable for small growers, which DTIC saw as a barrier to entry. At the IMC, it had been decided that DTIC, alongside SAHPRA and NDOH, should go back and look at the costs. DTIC continued to engage with SAHPRA and, the last time she had checked, SAHPRA had been planning to meet with its board on the issue. She might have to follow up and provide the Committee with an update in writing.
Ms Maseko-Jele said that she wanted to emphasise the Chairperson’s remarks about the importance of speed. The economy really needed this initiative. She thought that DTIC was already aware of this, and there was nothing more to say, except that it had to do everything with speed.
Ms Mcata-Mhlauli replied that she fully agreed that implementation was urgent, especially on the regulatory side. There were over 900 000 small-scale cannabis farmers. She thought that everybody present wanted to ensure that big corporations did not come to dominate the industry, and to ensure that black farmers were included. Sorting out the regulations, the cost of permits, and other such details would help to accelerate the plans in manufacturing. DTIC knew that both manufacturers and foreign investors were standing by. She would be pushing her team at DTIC, along with her partners at SAHPRA, to overcome the obstacles and reduce the barriers to entry.
The Chairperson asked whether DTIC had considered offering any special incentives in the cannabis industry, especially since it was an infant industry with a lot of potential.
Ms Mcata-Mhlauli replied that she did not want to give a direct response. The DTIC Agro-Processing Support Scheme covered many value chains, and obviously would be able to support any producer which met all its requirements and submitted an application. However, there were not currently any special incentives offered to the cannabis industry. As the industrialisation process moved forward, DTIC would probably begin to engage with the National Treasury on the matter, in order to develop the industry in terms of both size and infrastructure.
The Chairperson said that he had worked with Ms Mcata-Mhlauli before and knew her to be very passionate. He expected her to demonstrate that passion in this process, too. The Cannabis Master Plan was a very big programme, and it would take off with the help of some passionate people.
Closing remarks by the Chairperson
The Chairperson said that it was important for the Committee to get a strategic view of the cannabis industry. The intention was to enter the clause-by-clause deliberations – and even the public hearings – with an understanding of the industry, and to legislate on the basis of knowledge rather than ignorance. The three departments the Committee had met with had provided a lot of information, though Members had requested some further written information from DARRLD and NDOH, and the Committee was now in a good position to process the Cannabis Bill.
The Chairperson said that Parliament would be monitoring the Cannabis Master Plan closely. It did not only want to see “endeavours and plans” – from now on, it wanted to see real projects, started from the ground and owned by South Africans. Where it was necessary to partner with multinational companies, those partnerships should benefit the country. The country did not want to find, in a century’s time, that it had repeated the mistakes made in the mining sector. It had learned from the experience of seeing big holes in the ground where mines had been, in the middle of communities that remained underdeveloped. This policy was a step towards growing the cannabis industry with and for the people of South Africa. The initiative was also for the benefit of surrounding countries. South Africa would collaborate and share experiences with Lesotho, Zimbabwe, and others, because this was not only about a South African revival, but also about the Southern African Development Community (SADC) and a revival of the African economy.
The Chairperson said that the Committee was impressed by the passion shown by department officials, who were dedicated to making this project a “game-changer.” The South African economy was depressed, and the mood was depressed. Projects like this were needed to lift the mood and turn the economy around, and the country should direct its energy and resources appropriately. He thanked the Members, deputy ministers, department officials, and members of the public who had attended.
The meeting was adjourned.
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