Zim misses out on $340bn cannabis market
John Kachembere News Editor
Financial Gazette
19/6/2019
ZIMBABWE’S plans to tap into the billion dollar cannabis market could suffer a major setback due to the country’s deteriorating economic conditions, a new study has revealed.
The government last year legalised the production of marijuana for medicinal and scientific use. And it approved the first cannabis farm and production plant at the Zimbabwe Prisons and Correctional Services’ Buffalo Range in Chiredzi, after Ivory Medical, a Harare-based company, secured a 10-hectare piece of land at the estate.
However, according to New Frontier Data (New Frontier), setting up a legally regulated cannabis programme in Zimbabwe would be challenging because of antiquated infrastructure and limited access to water.
“Zimbabwe has faced some significant obstacles to economic development. Economic output was negative from 2000-2008, and while it rebounded from 2009-2016, growth slowed considerably over that period. Significant budget deficits have also impacted economic development, further driving the government’s priority to stimulate multisectorial industry growth,” read part of the report.
New Frontier further indicated that one of the most significant challenges facing the Zimbabwean budget is the rising health-care spending.
“About 13 percent of Zimbabwean citizens — 1,3 million people — have HIV/AIDS, and the cost associated with the treatment of associated conditions has increased significantly since 2000. While efforts to contain health-care spending resulted in a temporary reduction of expenditures by government, it has increased again in the past several years,” the research firm said in its 2019 industry outlook report.
The report noted that medical cannabis may help reduce health-care costs in Zimbabwe as it has in other markets.
“More mature markets such as in Europe have supply shortages that could be supported with exports of medical and industrial grade cannabis. Exportation would also provide the government with needed foreign currency and help address trade deficits,” New Frontier added.
Recent economic analysis for Zimbabwe finds that deployment of medical and industrial cannabis programmes would create between 60 000 and 90 000 agricultural and manufacturing jobs.
Through medical and industrial cultivation, processing, and exports, the industry could generate above US$300 million in revenues, based on modest 50 000 hectares cultivation within five years.
As a major global exporter of tobacco, felling demand leaves Zimbabwe at risk of declining agricultural output and displaced workers for whom cannabis cultivation could offer an occupational remedy.
In January this year, Finance minister Mthuli Ncube backed calls for Zimbabwe to grow cannabis for export to take advantage of the growing global legal marijuana market.
Growing adoption of marijuana in several medical applications such as cancer, mental disorders, chronic pain and others is expected to propel revenue growth in near future.
Canada recently became the first country in the world to legalise cannabis entirely, which has now led many other countries around the world to consider either recreational or medical legalisation.
Argentina and Australia are amongst some of the recent countries to legalise medical cannabis, while European nations like the Netherlands and Italy are beginning to explore their options.
A Canadian firm has since approached Harare with a proposal to produce cannabis in a development that could earn the country millions of dollars in much needed foreign currency.
Zimbabwe has, for years, straggled with serious foreign currency shortages which have lately manifested in acute fuel shortages.
“I am aware that Canadians have been in town, working with local partners to try and acquire licences and get into this business,” Ncube said.
In April last year, Zimbabwe became the second African county after Lesotho to legalise marijuana for medical and scientific purposes.
Then Health minister David Parirenyatwa said individuals and businesses would be able to apply for licences to cultivate cannabis for medicinal or scientific use. The plans were later shelved, with government citing the need for feasibility studies. [email protected]