Credit Image: Subiaco Photography
The Cannabis Expo – South Africa kicked off the year from 24-26 March in Cape Town. With representatives from all over the world getting together after the break there were some issues that needed to be discussed in a variety of platforms and private meetings. The subjects under discussion mainly circled around new problems sticking its head out in a new and growing industry with a lot of the initial euphoria being dampened by problems that weren’t foreseen even a few months ago.
We had a post-Expo debrief conversation with our man in South Africa, Wesley Petzer, about the pressing issues of the moment, how they can be solved and what the positives are to look forward to.
What are the issues that are troubling the industry at the moment?
Loadshedding (this is the South African euphemism for the current electricity shortage in SA – ed*) costs are massive and it’s taking its toll on a lot of people and it’s pushing expenses up. Companies are really struggling to have access to solar power panels. The demand is bigger than the supply. This is holding a lot of people back and they are having to rewrite business plans. This weighs heavily upon us and trying to balance all these major issues is too much for a lot of people. So, people must cut down on their production, get plants from a facility that supplies clones, but are suddenly charging a lot more than usual as keeping mother plants is an additional cost to run on-site. You add this to the huge electricity bills and the expenses are just starting to pile up. People are having to go back to the drawing board and rethink their plans and visions. But there is progress and some people are making it happen. We have been approached by a client looking for new partners because their business is growing so quickly they can’t keep up.
What is making certain companies succeed where other fail?
There are all these little gems starting to come out. They do what they do very, very well. They have a vision and they are trying something different and they have a different approach. A company like GES Labs are changing the game as they grow. They are not just copying and they are not just buying a turnkey solution. The approach is not just “we’re getting into cannabis and we’re pumping money into it”, it’s about a new approach. Also, the companies that have good international connections are also doing well, with money and technology coming in from the outside. So, you either have to have good overseas connections that bring in the information or quality standards or you have to have people that are very passionate that decide to do things their way.
How is this “doing this their way” being received?
There are definitely international companies that are starting to see the benefits of that. If you want to cultivate indoor, you might as well just do it in Europe – energy is more efficient there, probably cheaper and greener than it is in South Africa. Doesn’t matter where you cultivate it, it’s irrelevant. There are people who are starting to ask why South African brand names like Durban Poison, Swazi Gold and others are not being exported. And there is definitely a demand to something with a bit of Africa in it. But some legacy cultivators don’t realise that the conditions that they cultivate under will never meet the criteria required to import for instance into Germany. The seeds need to go through a process to make it acceptable in the EU. So, if you want the African flavor in a medical product, you have to jump through some hoops.
Is South Africa and other countries being re-colonised by all these rules and regulations?
Theoretically yes, but we are doing it to ourselves. South Africa has always had an inferiority complex and always considers things from the outside to be better than what is produced locally. Our trends come from America, just like our hip-hop scene is super westernised. There may be African flavours to it, but its basis is solidly American. In the cannabis space the demand is there for US-styled product like edibles and US cultivars that people see in the American hip-hop videos. People copy what they see overseas and then the cultivators cultivate that. This happens at the expense of locally produced seeds and cultivation. In the recreational (black market) cloning space you are only asked for the big names and the cultivars mentioned on social media platforms. It takes a lot to convince people to use local cultivars, even though they are very good. The perception is always that what we have here is not that good. One of the biggest problems are that people think that they have an educated opinion, but they actually have no clue.
How do we solve this impasse?
What we need to solve this conundrum is a breeding programme. One of the companies that is doing very well in Lesotho has their own cultivars. They had the money, they developed the cultivar, they took the chance. And it seems to be working internationally, but domestically it’s not happening. The trick will be to convince the European user that they don’t want an American or European cultivar that is cultivated in Africa, but rather an African cultivar. The only way that will happen is if there is development and showcasing and that takes a lot of money. These kinds of cultivators can’t afford huge R&D processes at the moment because it’s a risk. Money is tight, so they need to do things that have a guaranteed positive financial outcome. People tend to settle for what works, even if it doesn’t work very well. In the end Europe will have to help – both with money for development as well as telling us exactly what they want. They need to give the instructions because we are shooting blindly without knowing what the goalposts are. Hitting the EU-GMP is very difficult from here.
Do we have anything positive to look forward to?
The Section 21 Medical Cannabis law is gaining momentum. I don’t always agree with how some people are doing it, but I think it’s a very good mechanism where we can use these loopholes to have medicinal cannabis available to people on prescription. But we need the support, we need the distribution, we need the pharmacies and we need the quality control. It cuts both ways: on the one hand the patient is getting something that helps them on the other hand the farmer is getting some cash in.
Any tips for a newbie?
Find the passion, find the market you want to play in and do the research. There are still too many people cultivating without knowing who their clients are, just jumping into the market doesn’t work.
Are you a newbie in the business? Or have you been in the industry for a long time but need support with GMP or setting up your facility? Either way, we are happy to help – book a demo with us now!
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