Draft cannabis bill ‘completely misses the mark’

Legislators seem oblivious to the business and tax-generating potential of the industry.
Not a good sign … the bill was drafted by the Department of Justice and Correctional Services. Image: Cole Burston, Bloomberg

Two years ago, the Constitutional Court decriminalised the possession and cultivation of cannabis in private by adults for personal private consumption. It was a historic day that left many weed lovers on a natural high.

After the long wait for the Cannabis for Private Purposes Bill to be made public, the industry’s hopes and expectations slumped when it was tabled in Parliament on September 1. (The call for comments opened on September 9 and closes on October 9.)

According to industry experts, it’s not what is in the Bill that resulted in the anti-climax, it’s how it has ‘completely missed the mark’ by failing to highlight the business opportunities that lay before it.

Andrew MacPherson, senior associate in the dispute resolution practice at law firm Cliffe Dekker Hofmeyr, said it was expected that it would unlock some financial growth opportunities.

“Those with skin in the game felt quietly optimistic that the coming Bill would be the first step in a revised, progressive approach to cannabis, one which would in due course see the unlocking of the myriad benefits of the plant, such as the tax revenue which could be generated, the jobs created, or the environmentally friendly textiles and building materials which could be sustainably and cost-effectively produced,” MacPherson said.

Lacking a collaborative effort 

MacPherson said that upon a cursory glance at the Bill, hopes were immediately dashed because of the concern that it had been drafted by the Department of Justice and Correctional Services.

“This belies a particularly conservative approach to the drafting process. The focus remains on restricting access to, and the use of, cannabis against the threat of rather severe legal consequences in the form of fines and jail time.”

MacPherson said the industry wanted a collaborative effort between the various departments such as health, agriculture and finance.

“The drafters have seemingly adopted a rather narrow and traditionalist perspective in their preparation of the Bill, which as currently constructed, does not give an inch more than was mandated by the Constitutional Court,” MacPherson said.

Failure to see the commercial prospects

He highlights how the South African the government failed to use the legalisation of cannabis to render tax revenue to support small businesses – as has become particularly necessary in the wake of the Covid-19 pandemic – and restorative justice programmes.

MacPherson said the most glaring of all the oversights is how the Bill fails to address any of the commercial aspects and opportunities that cannabis presents in the country.

The only commercial opportunities are for farmers who can obtain a licence to either export their weed or supply it to a laboratory that it has the necessary licences for the treatment, processing, and manufacturing of cannabis-related products.

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MacPherson said this is insufficient when the whole country could be participating in and benefitting from the cannabis economy.

The Bill states that adults may, without the exchange of remuneration, provide to, or obtain from, another adult person, for personal use the prescribed quantity of cannabis plant cultivation material; cannabis plants; and cannabis.

“By prohibiting the exchange of remuneration for cannabis, cannabis plants, seeds, and seedlings, the Bill envisages idealistic altruism while completely ignoring the commercial realities involved in growing, processing, and supplying cannabis for personal consumption.”

‘Self-defeating legislation’

“In practice, this amounts to self-defeating legislation, forcing the average person to obtain cannabis illicitly, reinforcing the existing black market, and depriving the economy of attainable tax income,” MacPherson said.

He says that having consulted widely in the industry from large corporates to young entrepreneurs, it’s clear that a multitude of commercial concepts and ideas – such as retail shops, cannabis supplies and products, cannabis dispensaries, businesses offering kits for the DIY cultivation of cannabis at homes – are waiting to be launched upon commercial legalisation.

“These enterprises are, for the time being, forced to operate as part of the informal economy, meaning that there is a lack of regulation and a haemorrhaging of potential tax revenue,” MacPherson said.

It could be regulated better than the alcohol and tobacco industry

Charl Henning of non-profit organisation Fields of Green expressed strong sentiments on the inconsistencies in the Bill, such as being able to grow cannabis for personal use, but not being able to buy the seeds to do so and the lack of free will for commercialisation.

“These kind of irregularities point to a lack of knowledge and insight on the lawmakers’ side. They need to seriously go back to the drawing board.… They can regulate medicine however they wish, but the rest of us should be free to grow, trade and engage with our God-given plant,” Henning  said.

He points to the following graph by Psych Scene Hub on how cannabis is ranked as the least harmful form of drug in comparison to alcohol and tobacco.

Source: Psych Scene Hub via Fields of Green

Henning said they are also against the idea of the Bill prescribing quantities.

“The mere idea of — pointless and unnecessary — plant counting goes against the privacy judgment. We do not regulate cigarettes in this way, do we? Who comes to count our bottles of whisky?” Henning said.

He said Fields of Green has published an  84-page page proposal on its website which highlights the social, economic and commercial benefits of legalising cannabis and how the government should go about it, with references to practices in other countries.

The proposal also takes into account the development of policies, such as for alcohol and tobacco, and says they “are too often rooted in commercial interest and not in health or public interest”.

“There is a long-standing conflict between the enormous commercial driving forces and attempts to enforce stricter regulations. The right balance needs to be struck between the interests of commerce and public health-based regulation. Government intervention, licensing, pricing and taxation all have precedents set within the alcohol and tobacco industries,” it reads.

It says that cannabis, on the other hand, offers a blank canvas and the opportunity to introduce evidence-based regulations from the outset, and it suggests a cannabis ombudsman.

“Let us also learn lessons from the failings of tobacco and alcohol regulation …

“Cannabis being different than alcohol and tobacco on several points, regulation must be administered by a specific department – and not be lumped together with these more harmful substances, as it was previously with other controlled drugs,” it reads.

Parliament is to engage stakeholders and the public at large on the draft, and as MacPherson said: “The bill is receiving criticism more for what it lacks, than for what it contains.”

The industry awaits the commercial unlocking of cannabis and its potential.

Comments on the bill can be sent to Mr V Ramaano at cannabisbill@parliament.gov.za by no later than 16:00 on Friday, October 9.

Listen to Nompu Siziba’s interview with Wandile Sihlobo from Agbiz (or read the transcript here):

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All we wanna do is smoke pot and get high. Nothing more or nothing less. Don’t try and get too ambitious. We will grow it in our gardens and on the pavements and the parks. Tax free. Be happy.

The author seems disappointed she did not get an outcome that would encourage commercial activity. Would does she expect when the drafters are focused on communist outcomes and have absolutely no idea of how free enterprise works?
If you want to invest in cannabis (or anything else), look elsewhere.

Not just SA. Swaziland has also slipped up with a R1 billion cannabis investment that was supposed to go there and is now going elsewhere. RED TAPE. “If you know what I mean”

Botswana also slipped up as it is now charging 30% transfer duty on property when a foreigner or company buys property. Even if a foreigner holds 1% in a company. It is obvious they don’t want foreign investment. If there is ANY good explanation for this please tell me. I can for the life of me not think of any good reason.

not fully exploiting the business/tax benefits of cannabis is a microcosm of how the SA govt regards business in general.They are unable to grasp that hamstringing business in general with ‘red-tape’ laws, high taxes and highly restrictive labour/BEE laws is artificially limiting our GDP and, yes, chasing away trillions in foreign business investment.In case you’re reading this Govt, dropping these laws/restrictions could turn this country’s economic fortunes around.Ridiculously quickly.

Another wasted opportunity, by the time SA gets it act together the rest of the world will be so far ahead, we won’t be able to compete.

Hopeless attempt at more anc communist central control…their “our people” will still cultivate it by the acre and distribute it by the sack full through well established and saps / gang “protected” arrangements!

It misses the mark cause it was done while high and also that it’s still a draft.

Tragedy : this is one product that most workers need zero on the job training for. Most workers in SA can write the syllabus! And the user manual.

But I am on the fence wrt THC vs CBD. THC is MASSIVELY more harmful than alcohol or tobacco when considered on young brains – young being as old as 25y old. Dopehead is not slang – it is a very accurate diagnosis. Even more so when a large percentage of our ‘dagga’ is laced with Tik.

But either way, if we can grow and export more marijuana than wine, fine by me.

Okay so we need to establish a business case for cannabis. That is pretty simple.
1.Study Canadian model.
The Canadians are very advanced in this area. There are stock exchange listed Canadian companies with global offices. They own vast farms —
– locally and abroad – growing the crap. You should find enough info to justify a business case i.e employment creation – people who work pay taxes -, business will find markets for their products – businesses create jobs grow areas for housing, ancillary products etc.
2. Speak to Mike Tyson and Snoop. As a prev commentator speak abt growing it in your front garden. This is already happening in USA Australia etc.Individuals are granted licences to grow for own use. Also Mike and Snoop own large cannabis farms in USA.
3. Cannabis is safer than alcohol. People who smoke don’t cause car accidents, they don’t do GBV and they fly often.

End of comments.

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