Study finds hemp sector could generate R40 billion for SA's economy

A new study has found that South Africa has the potential to unlock a domestic industrial hemp industry worth about $2.5 billion (about R40 billion) by 2040.

The report released by the Localisation Support Fund, in partnership with the Industrial Development Corporation and the Department of Trade, Industry and Competition, outlines how clear regulations and coordinated investments could unlock a new economic sector.  

Tony Budden, hemp and cannabis expert and co-founder of Hemporium, said he has seen firsthand the growth and demand for industrial hemp products as consumers look for more sustainable and eco-friendly alternatives.

Industrial hemp, unlike psychoactive cannabis, is an agricultural commodity used for construction and textiles.

He explained that the lack of distinction between the two products alone has been a major obstacle for the sector, as it confuses farmers and fuels investor hesitancy.

RELATED: New draft rules aim to end South Africa’s cannabis confusion

“Industrial in agriculture, it needs big implements. Confusing the two, creates a major issue that you are still putting drug controls on an agricultural crop.”

Budden added that government-supported incentives will also be necessary to get the industry off the ground. Similar to the European industries, where governments provide subsidies to farmers to achieve economies of scale. 

“The opportunity is there, the goal is there, and there are many steps that need to be taken to get there… it is not going to create itself.

“The government really needs to hold the line here and have regulatory certainty.”

To listen to Budden in conversation with CapeTalk’s Lester Kiewit, click the audio player below: