Offshore Legal Process Outsourcing
April 12, 2024
The Rise of BPO in UK Conveyancing
May 3, 2024
Seeds of Change: Realising South Africa's Hemp Potential
Part 1: Hemp and its History in South Africa
Introduction
The legalisation of hemp cultivation in South Africa has opened up a world of opportunities for farmers, entrepreneurs, and investors. With the recent changes in legislation, the country finds itself at the forefront of a global industry poised for exponential growth. This 3-part series explores the evolution of hemp laws in South Africa, the economic advantages of embracing hemp cultivation, and the potential for rural development in this burgeoning sector.
Series Outline
Our series begins with an examination of the legislative history of hemp in South Africa up to the present. In Part 2, we shift our focus to the economic benefits the hemp industry promises, from job creation to boosting the national economy. Part 3 rounds off our discussion by recognising the challenges within this emerging sector and outlining ways to navigate these obstacles, painting a full picture of South Africa's hemp landscape.
Defining Hemp
Hemp, distinguished by its low Tetrahydrocannabinol (THC) content, has deep roots in human history, serving as a vital fibre and seed crop for millennia, with its use being tracked by some historians and archaeologists all the way back to 6000-8000 BC. However, misconceptions and prohibitions surrounding its psychoactive counterpart, marijuana, have historically impeded its growth (pun intended). From early colonial restrictions to blanket criminalisation in the 20th century, hemp faced numerous legal hurdles in South Africa, hindering its potential as a lucrative agricultural commodity.
It is important for our discussion to first define the difference between hemp and marijuana, both of which belonging to the family Cannabaceae. The genus Cannabis comprises of two species, Cannabis sativa and Cannabis indica, which includes the tall cane-like variety used for hemp fibre, and the short female plants being branchier and with a more abundant concentration of the psychoactive substance THC. Also to be noted here is the finding in a 2015 report published in the National Library of Medicine (USA) that hemp is genetically more similar to Cannabis indica than Cannabis sativa. However, hemp can be grown from both indica and sativa species, and so too can high-THC cannabis or marijuana. The difference between hemp and marijuana, specifically as it relates to legal and regulatory concerns, boils down to the percentage of the psychoactive component (THC) in the plant (and not the species of indica or sativa), with hemp having 0.3% or less THC, as opposed to marijuana with THC levels from 4% (average in 1995) to 15% (average in 2021). Government issued literature has defined “Hemp” as “low THC plants or parts of plants of Cannabis sativa L. cultivated for agricultural or industrial purposes, of which the leaves and flowering heads do not contain more than 0.2% THC”. For this article we will use the terms “hemp” for low-THC cannabis, and “marijuana” for high-THC cannabis.
South Africa’s Legislative Evolution
South Africa has a long history with the cannabis plant – or as locals call it, dagga – with an early reference to dagga found in Jan Van Riebeek’s diary (Dated 1658), who utilised the plant for trade with the Khoikhoi. The prohibition of cannabis cultivation was first introduced by the Dutch East India Company in 1680 in an attempt to monopolise the crop for trade, but due to the wide availability of cannabis in the wild and through trade with the indigenous peoples, little profit was to be made and the prohibition was lifted in 1700. The 1870s saw the prohibition of “the smoking, use, or possession by and the sale, barter, or gift to, any Coolies whatsoever, of any portion of the hemp plant …” (s70 of Law No.2 of 1870) in the Natal Colony stemming from concerns of worker productivity declining due to use, with both the Cape and Transvaal colonies restricting the growth of the plant in 1891, and the Cape Colony prohibiting cannabis under Act 34 of 1891, and the Free State outlawing dealing in cannabis in 1903.
In 1928 South African saw the whole criminalisation of cannabis under the Medical, Dental, and Pharmacy Act. This set the tone for the years to come with hemp unable to distinguish and thus separate itself from its psychoactive sibling, essentially freezing out the country from participating in the global industry (an industry itself hindered by the previous regulation of cannabis under international law in 1925 by the League of Nations Advisory Committee on Traffic in Opium and Other Dangerous Drugs, at the strong behest of the South African government among others).
The landscape changed dramatically in 2018 when the Constitutional Court's landmark decision in Minister of Justice and Constitutional Development and Others v Prince and Others decriminalized the private use and cultivation of cannabis.
Regulatory Changes and New Regulations
The pivotal ruling by the Constitutional Court catalysed legislative reform (albeit at government pace), leading to the 2021 declaration of hemp (as defined in the guidelines) as an agricultural product under the Plant Improvement Act 53 of 1976. Subsequent amendments and guidelines issued by the Department of Agriculture, Land Reform, and Rural Development provided a structured framework for hemp cultivation, including permitting, registration, importation, and transportation protocols, the key points of which can be summarised as below:
Hemp Permit Requirement:
Individuals or businesses involved in various hemp-related activities, such as importation, propagation, sale, or cultivation, must obtain a Hemp Permit issued by the Registrar of the Plant Improvement Act.
Registration of Premises:
Businesses conducting hemp-related activities must register their premises with the relevant authorities. This includes facilities engaged in the sale, cleaning, conditioning, or cultivation of hemp plants or propagating material.
Importation Procedures:
Importation of hemp seed for cultivation purposes requires specific documentation, including import authorization under the Plant Improvement Act and permits for phytosanitary purposes. Additionally, analytical reports confirming THC content and compliance with Medicines Act regulations are necessary.
Transportation Requirements:
Any distribution or transportation of hemp propagating material or harvested material must be accompanied by a transport declaration, packing list, and copies of relevant permits or certificates.
Variety Denominations and Registration:
Hemp varieties must be listed in the varietal list, and authorization must be obtained from the Registrar for the establishment of unlisted varieties. Registration of varieties is compulsory and entails submission of relevant documentation and proof of THC content.
Seed Certification:
Seed intended for cultivation purposes must be certified by a designated authority. Alternatively, exemption authorization may be sought, accompanied by analytical reports confirming THC content.
Cultivation Requirements:
Cultivation of hemp requires a valid Hemp Permit, notice of planting submission to the Registrar, and adherence to specific security and labelling protocols. Maximum cultivation area is restricted to 50 hectares.
Inspections and Record-Keeping:
Authorized inspectors may conduct regular inspections of permitted sites, with costs borne by permit holders. Comprehensive record-keeping of all hemp-related activities and transactions is mandatory.
Annual Reporting:
Permit holders must submit detailed annual reports outlining activities performed in accordance with the permit's provisions by the specified deadline.
A thorough reading will be needed if one intends to engage in this industry, as the above is simply a summary of the new regulations around hemp as issued by the Department of Agriculture, Land Reform, and Rural Development.
Conclusion
In concluding Part 1 of our series, we've observed a brief history of hemp in South Africa, from historical challenges to the recent regulatory frameworks enabling its cultivation. This groundwork lays a robust foundation for exploring the significant economic benefits hemp promises, which will be the focus of Part 2. As we anticipate the potential upliftment of rural economies and the broader national economy, Part 3 will address the hurdles that lie ahead and strategies for overcoming them, ensuring South Africa's successful navigation through this green revolution.
