Eight years after legalization, South African cannabis is still waiting for its legal market

Nearly eight years after the Constitutional Court’s ruling authorizing the cultivation and possession of cannabis for personal use, South Africa is still struggling to establish a coherent regulatory framework for its industry. While the market continues to grow in a legal gray area, companies that have invested in authorized sectors are criticizing the lack of clearly defined legal avenues for their products.

The government has been working for several years on the National Cannabis Master Plan, a program designed to structure and formalize an already well-established sector. Despite numerous consultations and a relatively broad political consensus on the need for reform, the concrete measures are slow to materialize.

For many stakeholders in the sector, the challenge is no longer identifying solutions, but implementing them. The main policy directions are clear, recommendations have been made, and regulatory mechanisms have been extensively debated. The task now is to translate these into operational measures.

This impatience was recently highlighted in an open letter addressed to the South African authorities by legal expert Charl Botha and published by Cannabiz Africa. Drawing on more than two years of technical contributions, memoranda, and regulatory proposals, he believes that the gap between policy announcements and their implementation is beginning to have tangible economic effects on companies in the sector.

“South Africa has reached a point where implementation should now receive the same attention as consultation and policy development. The question increasingly being asked across the sector is when all this work will begin to yield tangible results.”

A cannabis industry worth billions of rand already exists

The South African debate on cannabis has a unique aspect: the issue is not about creating a market, but about regulating an economic activity that already exists on a large scale.

During recent congressional hearings, several estimates were put forward regarding the sector’s value. Authorities cite a market potentially worth up to 28 billion rand (approximately 1.4 billion euros), although figures vary depending on the source and the methodologies used. This lack of consolidated data complicates the precise assessment of cannabis’s economic impact and, by extension, the formulation of public policies to be implemented.

Appearing before the relevant parliamentary committee, Ncumisa Mcata-Mhlauli, Director of Agri-Food and Forestry Industries at the Department of Trade, Industry, and Competition (DTIC), stated that the government was aiming for 10% annual growth in the sector. She estimated the formal industry’s revenue at approximately 5.5 billion rand per year, while acknowledging that actual activity far exceeds this figure.

Charl Botha’s estimates point to an even larger market. According to his analysis, the retail cannabis market alone is worth between 9 and 10 billion rand annually. He estimates that approximately 550 tons of cannabis flowers pass through a network consisting of approximately 8,500 retail locations and 2,500 cannabis clubs.

“The question is how to integrate an existing market worth several billion rand into the formal, taxable, and regulated economy,” says Botha.

The Limits of Decriminalization

The roots of the current situation can be traced back to the Constitutional Court’s landmark 2018 ruling, which established the right of adults to grow and possess cannabis for personal use.

While this decision marked a major legal turning point, it did not establish a regulated commercial market. Today, South Africans can legally grow cannabis at home, but they still lack clearly legal channels for purchasing it, which has inevitably contributed to the rise of a significant gray market.

Some companies have attempted to operate based on interpretations of Section 21 of the Act on Medicines and Related Substances, which allows doctors to request access to unapproved drugs, including cannabis, for patients. However, these authorizations are specific to each patient and were never intended to serve as commercial retail licenses.

The result is a legal environment that remains highly ambiguous. John Jeffery, project manager for the government’s cannabis program, acknowledged these challenges during parliamentary debates earlier this year.

“The legal situation is not ideal. It’s quite confusing.”

For licensed medical operators who have invested in facilities, compliance systems, and regulatory approvals, the lack of a clear domestic market has become particularly problematic. Meanwhile, companies operating outside official regulations continue to meet demand without having to bear the same compliance costs.

The National Cannabis Policy Framework promises a regulated future

In response to these challenges, the government has spent years developing the National Cannabis Master Plan, approved adopted for the first time by the Council of Ministers in 2019.

Originally managed by the Ministry of Agriculture, the project was transferred to the DTIC in 2024, as authorities sought to centralize oversight as part of a commercial development strategy. The plan also received the support from President Cyril Ramaphosa, who stated in his 2025 State of the Nation address: “We want South Africa to be at the forefront of commercial hemp and cannabis production.”

As noted by Business of Cannabis, the Master Plan is structured around nine pillars, covering areas such as regulation, research, seed supply, market development, manufacturing, education, and business support. Ten different ministries are involved in its implementation.

The strategy aims ultimately to create opportunities in several sectors, including medical cannabis, hemp fiber, food products, and cosmetics. It also provides existing growers and traditional producers with pathways into the regulated market.

According to Mr. Botha, many producers remain outside the legal framework not because they oppose regulation, but because there is no practical way for them to comply with it.

“Much of the existing industry remains completely outside the legal system. These producers aren’t refusing to join the regulated market; there simply isn’t an accessible gateway for them to enter.”

Implementation remains the missing piece

Despite the Master Plan’s ambitious goals, industry stakeholders are increasingly warning that policy documents alone will not be enough to create a functional market.

The Policy on the Marketing of Hemp and Cannabis, considered to be a a key element of the government's strategy, is still awaiting approval from the Cabinet. More importantly, the future cannabis bill, which would provide the necessary legislative basis for implementing many of these proposals, is not expected to be submitted to Parliament until mid-2027.

This schedule is becoming difficult for many companies to accept.

Botha’s recent letter highlights several proposals that have gone unanswered, including a framework for 100 pilot sites designed to generate data on compliance, traceability, and public health at no cost to the government. Other contributions include recommendations regarding packaging, labeling, product traceability, and the incorporation of Indigenous knowledge systems into future regulations.

At the same time, licensed cannabis businesses continue to face practical obstacles. Many struggle to access banking services, payment providers, insurance products, and investment capital, even when they operate in full compliance with current regulations.

“A modern framework for cannabis must be evaluated not only in terms of legislation and policy, but also in terms of the ability of legitimate stakeholders to access essential business infrastructure, including banking services, payment systems, insurance, and investment capital.”

As frustration grows, some stakeholders have begun turning to the courts in an effort to speed up the reform process. According to Botha, the ongoing constitutional litigation reflects a broader sentiment within the sector that the consultation process has reached its limits.

South Africa already has a significant cannabis economy, solid expertise in the field, consumer demand, and broad political support for the reform. The constitutional debate has largely been settled, and the political direction has been set.

What remains uncertain is whether the government will be able to put the necessary regulations in place to make these ambitions a reality.

As Botha put it: “The constitutional debate is over. The political direction is clear. All that remains is to take action.”