Cannabis clubs and medical cannabis dispensaries have exploded in all of South Africa's major metropolises.

From private cannabis clubs and medical cannabis dispensaries have sprung up in South Africa’s major cities. However, the legal status of these businesses remains uncertain due to the lack of clear regulations following the decriminalization of cannabis for personal use in 2018.

As the industry grows, the legal framework is lagging behind, creating a confusing and uncertain environment for business owners and consumers.

The Rise of Cannabis Clubs and Dispensaries

Since the landmark ruling by the Constitutional Court of South Africa, which decriminalized the private use and cultivation of cannabis, the cannabis market has flourished.

Cannabis clubs such as the Infusion Social Club, Canna Busters, and Medcur Medical Cannabis have been established in urban areas such as Cape Town and Johannesburg, and new retail outlets are opening regularly. Despite this growth, the sale of cannabis remains technically illegal under the law of 1992 on drugs and drug trafficking, which regulates drug-related activities in public places.

The explosion of cannabis social clubs can be attributed to a legal gray area. Many clubs justify their activities by citing the Prince ruling, which legalized the private use of cannabis. They argue that by renting private land to their members and offering horticultural services, they act within the bounds of the law.

However, this «culture club» model» has been the subject of legal challenges, particularly in the case of the Haze Club in Cape Town, which was the subject of a police raid in 2020. The club’s defense was rejected by the court, as Judge Hayley Slingers ruled that authorizing such a model without explicit legislation could effectively legalize the cannabis trade.

Alternatively, medical clinics use the’Section 21 of the Act on Medicines and Related Substances (Medicines and Related Substances Act), which authorizes the sale of unregistered drugs under specific circumstances, to justify the sale of medical marijuana.

According to Paul-Michael Keichel, a lawyer specializing in cannabis law who is involved in these cases, the use of the’Article 21 was not intended to cover the widespread sale of cannabis through dispensaries, but rather to provide urgent access to unregistered medications for patients who desperately need them. He compared the exploitation of this legal loophole to the controversial use of the’Ivermectin during the COVID-19 pandemic, claiming that it is being misused by companies seeking to capitalize on the growing demand for cannabis-based products.

Awaiting legal clarity

In May 2024, the President Cyril Ramaphosa enacted the bill on cannabis for personal use. This bill aimed to resolve the legal ambiguities surrounding cannabis use and trade by establishing clearer guidelines on what constitutes personal use and by defining penalties for activities such as the sale and supply of cannabis to minors. However, the bill has not yet been implemented, as it has not been officially enacted into law in the Government Gazette.

The lack of active legislation has frustrated many industry stakeholders, including cannabis club owners, who believe that regulation is essential to the industry’s prosperity.

The Infusion Social Club, one of the country's leading cannabis clubs, has called for the introduction of a regulatory framework similar to the one used for alcohol. This framework would include cultivation permit, and on-premises consumption permit and the creation of a regulatory body responsible for ensuring compliance with regulations throughout the supply chain.

As they point out, the cannabis industry offers enormous economic opportunities, but it needs legal certainty to reach its full potential.