DESPITE a global boom in medicinal cannabis, only 10 out of 60 industrial hemp production licenses issued by the government of Zimbabwe have been operationalised, The NewsReportLive has learnt.
Industry players say investors have adopted a wait and see approach, choosing not to sink millions in the hemp as demand for the product remains low.
Peter Rhodes, chairman of the Cannabis Industries Association of Zimbabwe says the cannabis market had remained small, making it unattractive for investors to enter into hemp production.
“One of the challenges cannabis farmers find today is the size of the market, it hasn’t grown as quickly as expected as a result we are dealing with a very small market, competing with Canada, South America to feed into that market. As such investors are allocating their capital to other markets,” Rhodes said.
Rhodes said despite the initial excitement over the crop, enthusiasm has gone down due to subdued demand adding that with more countries legalising industrial hemp better prospects lay ahead.
“Three or four years ago, there was a great deal of enthusiasm and now the demand has not grow to the level that people were hoping. It is a demand based crop. When Germany or France legalises you will find more of the Zimbabwean product being demanded,”he said.
“There is no point in putting millions into a captivating facility when there is no one to sell to.”
The Zimbabwean industrial hemp is worth tens of millions, according to Rhodes and most hemp cultivators had not managed to export their produce due to international bottlenecks.
“Most of those groups that have cultivated have not exported yet. At this stage, it is very early. The government has really tried to incentivise but you cannot make investors part with their money if they don’t believe the market is big enough to do so,” Rhodes said.
The southern African country became one of the first in Africa to legalise the production of medicinal cannabis in 2018, hoping for a fresh income stream of badly needed export dollars.
The global cannabis industry could be worth $272 billion by 2028, according to Barclays analysts, and Zimbabwe’s Finance Minister Mthuli Ncube has said the country wants at least $1 billion of that — more than it currently makes from its top agricultural export tobacco.
As Africa’s biggest tobacco producer, Zimbabwean officials also recognise the need to diversify away from the addictive narcotic that is proven to be ruinous to the health of smokers and those around them. Cannabis is seen as a less harmful alternative to cigarettes and its cannabidiol (CBD) widely accepted as a natural remedy.
But challenges remain, not least the huge cost of getting set up amid tight regulations, such as the requirement to use a greenhouse to meet the criteria for ‘organically grown’ cannabis — necessary to be able to sell it to the medical market.
“i think hemp will play a role in Zimbabwe’s agricultural space but at this stage, it is still too early,” Rhodes said.