Govt scouts for medicinal cannabis markets
HARARE – Government remains committed in making sure that medicinal cannabis farmers find markets for their products abroad, an investment agency has said.
Speaking during a cannabis stakeholder workshop organized by the Medicines Control Authority of Zimbabwe (MCAZ) in Harare last week, Zimbabwe Investment Development Agency (ZIDA) said the government has come up with a raft of measures to support the growth and sustainability of medicinal cannabis farmers.
Since the first cannabis licence was issued in 2019, Zimbabwean farmers are yet to export any medicinal cannabis outside the country, save for samples that go for testing in South Africa.
ZIDA’s head of research and innovation, Dr Raban Masuka said they are continuously engaging the outside markets to find a profitable destination for medicinal cannabis.
“Discussions with potential off-takers who are linked to National Health Services in the United Kingdom and Canada Health are ongoing.
“Current work is establishing the actual production output from our licensed investors, policy and legislative framework is continuously being improved,” he said.
He said they are also scouting for long-term financial capital for cannabis farmers.
“Discussions with local financial institutions are ongoing where the need for “Patient capital” is being explored,” he said.
To date, Zimbabwe has licensed at least 60 players in the medical investment space and only 10 are actively producing.
“The country has registered positive legislative and policy framework in this sector that is resulting in increased investment.
“Funding has been a major challenge for most of the 51 players, off-take markets have also hampered the growth of this sector including the Covid-19 pandemic,” he added.
Dr Masuka said, while cannabis is an emerging frontier market, the sector was facing macroeconomic forces like any other industry.
“Global recession and inflation are affecting this sector significantly, growing and selling cannabis requires specialised and large scale agriculture facilities and enormous amounts of power and capital, which can result in high operating costs”
The growing interest in medicinal cannabis in recent years has been a fascinating economic, medical and scientific phenomenon.
The value of companies in the medical cannabis space continues to grow since 2019
“The global cannabis market size is expected to grow from $57.8 billion at a Compound Annual Growth Rate (CAGR) of 8.74 percent by 2026,” he said.
During the discussion, it also emerged that government will soon establish and introduce the Green Industry Fund.
“The Finance Act (No.2) of 2020 s24 provides for the collection of medicinal cannabis levy on export, it is important and critical that ZIDA quickly facilitates and take the lead to draft a Statutory Instrument (SI) to:
“Establish the Green Industry Fund.
“The Sl to be developed should work as a conduit to legalise the Investment,” he said, adding that the instrument is designed to protect investors against changes in law, guarding them against expropriation, and offer monetary and fiscal incentives among others.
The authority is also exploring the establishment of local testing capability as well as a European Union-Good Manufacturing Practice (EU-GMP) certified laboratory
“Once markets have been explored, and off-take agreements signed, there is a need to explore the use of Pensions funds and also insurance firms
“Financial institutions and Pension Funds have approached ZIDA with proposals to fund investments in medicinal Cannabis,” said Dr Masuka.
Between 2023-2027, the medical cannabis market is estimated to rise at a Compound annual growth rate of 8.74 percent.