Africa’s legal cannabis industry could be worth more than $US 7.1 billion annually by 2023 if legislation is introduced in a number of the continent’s major markets, according to research gathered for The African Cannabis Report™, released today.
The first detailed report on the legal cannabis industry in Africa finds that the continent could reap significant rewards through the legalisation of cannabis. The report includes detailed market value forecasts, regulatory timeline analysis, consumption data and healthcare analyses for 9 key markets.
A complex and challenging region, the African market is newly emerging, and despite a conservative regulatory approach to cannabis, the industry shows signs of promise.
Cultivating an industry
Although widely grown across the continent (indeed Africa is estimated to produce at least 38,000 tonnes of cannabis per year) cannabis is illegal in most African countries. High unemployment rates and a global decline in demand for tobacco crops has hit these economies hard.
However, the region has a wealth of experience in cannabis cultivation; despite its illegality, many agricultural workers have turned to cannabis farming as the only way to earn enough money to provide for the basic needs of their families.
International demand offers a strong opportunity to unlock the potential value of Africa’s legally produced cannabis, which could be worth up to $7.1 billion annually by 2023 – the bulk of which will come from the production sector.
With affordable land, low-cost labour and an experienced agricultural workforce, Africa offers enormous opportunity to local start-ups and foreign companies looking to expand.
However, an inadequate healthcare system means that even if medicinal cannabis were to be legalised across the continent, access to products would be limited.
Uncertainty over access
Companies and entrepreneurs seeking to invest in the cannabis industry in Africa face other structural hurdles. The region has an extremely high rate of HIV/AIDS (more than one-fifth of all adults are estimated to suffer from the immune deficiency condition).
Although there is evidence to suggest medical cannabis can support in the treatment of the virus, cannabis may not present itself as a priority treatment.
In addition, a heavy reliance on donor-supported healthcare funding will likely limit patient access to cannabis in the short-term. For instance, UNICEF reports that Malawi’s health sector is 80% funded by foreign donors, which may choose to prioritise vaccinations and other preventative treatments before shifting their attention to medical cannabis supplies.
Should legislation change, NGOs, charities and other donors who provide a significant proportion of the region’s healthcare supplies will be an essential partner in providing access to legal medicinal cannabis products due to the inaccessibility of healthcare services.
High consumption rates
Supply will remain an issue in the short-term but demand in the region is sky-rocketing. Annual prevalence rates of cannabis use in Africa (13.2%) cement the region as having one of the highest consumption rates around the world. In fact, Africa is home to five of the world’s top 30 countries for cannabis prevalence among adult populations with Nigeria (no.3), Zambia (no.10), Madagascar (no.14), Egypt (no.25) and Sierra Leone (no.30) all making the leaderboard.
With over 76 million black market cannabis users, Africa has a huge potential consumer base, but prices are expected to remain low throughout the region.
Prioritising local needs
Cannabis remains an attractive proposition for international companies seeking to expand their footprint in a region where land and labour is low-cost. Because of the poor economic
conditions faced by many African countries, any legalisation of cannabis in the region will have a duty to safeguard local interests. In this respect, Zimbabwe could become a regional blueprint as licence applications can only come from those who can prove citizenship or residency.
To learn more about the newly emerging African cannabis industry, and examine the opportunities and challenges presented by the conservative legislative climate and complex healthcare systems, download The African Cannabis Report™, released today.
Mars Wrigley Wins Trademark Case Against Companies Selling Cannabinoids Under the Name “Skittles”
Mars Canada Inc., a leading manufacturer of candy like M&M’S®, SNICKERS®, ORBIT®, EXTRA®, and Skittles®, and Mars Wrigley recently settled a dispute over the use of the Skittles trademark on illicit cannabis products. Federal Judge Patrick Gleeson ordered three online marijuana merchants to “deliver up and destroy all infringing items and packaging” on August 12 in addition to paying different fines for violating Mars’ trademark.
In the motion, Gleeson stated, “I also find that using appropriated trademarks that are obviously and obviously attractive to children in order to advertise and offer for sale a potentially dangerous product represents a marked departure from ordinary standards of decent behavior that deserves to be denounced and deterred.”
“I have given serious consideration to the potential injury to consumers who would mistakenly drink the Defendants’ Infringing Product thinking it to be a genuine SKITTLES product as well as to the Plaintiff. It is even more important to condemn the Defendants’ actions because SKITTLES are a sweet treat that youngsters find appealing, Gleeson continued.
Mars initially filed the case in May 2021, alleging trademark infringement by the unlawful merchants. The business issued a press release saying, “Mars Wrigley strongly condemns the exploitation of popular candy brands in the marketing and sale of THC products, which is profoundly deceptive and irresponsible.” “The usage of Mars Wrigley’s brands in this way is illegal, improper, and it must end, especially to prevent children from accidentally eating these illegal THC products,” the statement reads.
The business particularly highlighted items being sold illegally on e-commerce sites in Canada and the United States under the names “Medicated Skittles,” “Starburst Gummies,” and “Life Savers Medicated Gummies.” These items “represent a substantial hazard to the public since anyone, children and adults alike, might readily mistake the infringing cannabis-infused products for Wrigley’s iconic and beloved candies and mistakenly swallow,” according to a complaint submitted in Riverside, California, at the time.
The National Post claims that Mars employed private investigators to buy imitation goods that violated the company’s trademarks.
Due to the frequent use of “Gorilla Glue” in strain names, the Ohio-based glue manufacturer that makes Gorilla Glue sued GG Strains in August 2017. By October, a settlement had been reached, stipulating that GG1, GG4, GG5, and other adhesives would take the place of Gorilla Glue #1, #4, and #5. Among other conditions, the cultivator’s website domain would be transferred to the Gorilla Glue firm ownership by January 2020.
Ross Johnson, co-founder of GG Strains and Gorilla Glue, was optimistic despite the fact that it was a significant setback. Johnson proclaimed, “We’re going to survive and triumph over it.” “Was there a setback? It is most obviously a setback. However, everything is now behind us, which enables us to advance. Sadly, according to the Cannabis Business Times, Johnson passed away in 2019 and his co-founder Don Peabody (also known as Joesy Whales) in 2020.
Similar legal actions have also been taken in relation to other well-known trademarked brands. The business sued marijuana businesses infringing on the items bearing the Hershey’s Chocolate brand in February 2018. UPS (United Parcel Service) filed a lawsuit in February 2019 against a set of delivery companies known as United Pot Smokers, UPS420, and THCPlant for using deceptive brand identification. Later in July 2019, the creator of the confectionery Sour Patch Kids took legal action against “Stoney Patch,” an illegal cannabis consumable.
Cannabis Events Just Might Save Atlantic City
Atlantic City, New Jersey could return to its original glory as a tourist destination with the boom of the Green Rush and the cannabis business events that follow. A city once dominated by the gambling industry is now facing its unknown future, and local experts think cannabis business-to-business events could solve that problem.
The familiar “glitter and sleaze” of Atlantic City’s boardwalk is known to locals, but the city has been on the decline for decades. Donald Trump’s Taj Mahal casino and hotel closed for good on October 10, 2016, and things haven’t gotten any easier for the gambling industry since then. Revel Casino Hotel followed, closing doors and being sold as well.
Things seemed to get worse in 2019, and despite an upturn in casino industry revenue in 2021, mostly due to a tax break, the city is still miles away from where it used to be. In addition, Atlantic City Tropicana’s workers are picketing for better pay and to unionize as the casino’s future remains uncertain.
However, the economic effects of the rollout of the cannabis market could be the answer to the city’s long-term financial woes. During the first month of adult-use cannabis sales in New Jersey, the state brought home $24 million in tax revenue.
Skift Meetings, focused on event professionals, released a recent report about the true potential Atlantic City offers for the Green Rush—putting more than a bandaid on the city’s economic fallout.
The most obvious comparison is the boom of business events in Las Vegas, such as MJBizCon or CHAMPS Trade Show, drawing tens of thousands of tourists looking for networking opportunities and more. Atlantic City is home to 17,029 hotel rooms—a high ratio of rooms compared to other cities of its size as it is designed for tourism. Atlantic City could house large-scale events of the same nature.
Stu Zakim, president of Bridge Strategic Communications and a member of the Marijuana Business Association said “[Atlantic City] can be a wildly successful destination to host cannabis conventions,” Zakim told Skift Meetings.
Several others agreed that the new cannabis market in New Jersey is especially ideal for a city like Atlantic City. That’s especially true for cannabis conventions that need large facilities.
“The legalization of cannabis in the State of New Jersey opened a new vertical market for meetings and conventions in Atlantic City. We see cannabis as a growing industry, and it will have a significant increase on the overall economic impact of the destination,” said Meet AC’s President and CEO, Larry Sieg. Meet AC focuses on convention development in Atlantic City.
And the idea is nothing new. Then-Democratic Assemblyman Reed Gusciora—who is now Mayor of Trenton—called for Atlantic City’s enormous potential for the cannabis boom in 2016.
Atlantic City reached its peak long ago in the 1930s as a “wet city,” and since then, has succumbed to rapid decline, and casinos are failing. Its population nosedived to half the size when the city was booming.
The 3rd Annual New Jersey Cannabis Convention (NECANN) is being held September 9-10 at the Atlantic City Convention Center.
The potential has been building up for over a year. On February 22, 2021 New Jersey became the fourteenth state to legalize adult-use cannabis.
“The cannabis market in Atlantic City specifically is huge, untapped, and brimming with potential,” NECANN writes. “With only one major cannabis dispensary in the city. We are beyond excited to see the potential of Atlantic City’s cannabis community become a reality. NECANN prides itself on bringing personalized cannabis expos to fit the local communities and their needs.”
Check local listings for more events which are sure to follow.
KZN Start-Up Tri-Medi Canna Clinches UK Partner to Set Up Cannabis Export Facility in SA
Apollon: SA on shopping list after Jamaica
Listed UK pharmaceutical company Apollon Formularies has taken a 49% stake in a joint venture with KwaZulu-Natal cannabis start-up, Tri-Medi Canna (TMC). TMC CEO Bandile says the new company would cultivate, process and distribute cannabis-based medicines through a licensing agreement with Apollon, which provides primary and secondary markets for equity and debt products
Apollan, which listed on the UK’s Aquis Stock Exchange last year, has a licence in Jamaica to cultivate, research, process and sell medical cannabis therapeutic cannabis products for various illnesses including prostate and breast cancer. Apollon will earn royalties for patent formulations and any new drug discovery will be under the joint partnership.
According to Businesscann release on 2 March 2022, the deal highlights are:
• “Apollon will receive a gross royalty on sales for all Apollon products sold within South Africa before extending its commercial reach to the wider SADC region under a renewable, mutually exclusive license agreement, the initial term of which is 12 months”;
• “Tri-Medi Canna will become a shareholder in Apollon via share subscription totalling £300,000 over two tranches, the first of which will be for £150,000 at 2.5p per share”.
Mkhize said that the new company would build an EU Good Manufacturing Processes (EU-GMP) facility and would work with emerging farmers and provide training for communities in KZN.
Focus will be on medical cannabis
He said Tri-Medi Canna was established to focus on medical cannabis, a booming industry that the company said is forecast to be worth up to $7.1bn (R113.7bn) in Africa by next year, with SA potentially accounting for 70% of that.
Stene Jacobs, COO of Apollon Formularies for Europe and Africa, said Apollon had been seeking opportunities to expand its operations internationally so it can make its proprietary medical cannabis formulations for various cancer conditions available to a wider patient base.
He said SA was the first large foreign jurisdiction after Jamaica where Apollon was expanding and it envisaged the local market as a springboard for entry into the rest of southern Africa.
“There is an appetite for what we do. We are already in discussions in Angola,” he said.
Jacobs said the joint venture would include skills transfer and would partner with the University of KwaZulu-Natal and University of Johannesburg to help develop new products.
BusinessDay Live quoted Jacobs on 19 June 2022 as saying the new JV would double the number of patented cannabis formulations owned by Apollon.
Deal will double Apollon’s patented formulations
“We spent the last nine years creating formulations. We have four international patents, and will have four more in the next few months,” he said.
In Jamaica it has its own dispensary and treatment centre, which also caters for patients from the UK and US, said Jacobs. He sees SA providing a similar opportunity for medical tourism in the future.
Jacobs said SA should be an epicentre of growing cannabis, given the favourable climate. “South Africa has the opportunity to build on its reputation as the regional best-in-class operator and to showcase its already successful cultivation and plant genetics abilities”.
The post KZN Start-Up Tri-Medi Canna Clinches UK Partner to Set Up Cannabis Export Facility in SA appeared first on Cannabiz Africa.