U.S. Markets closed

New Report Posits The Social Good Of A Legal Cannabis Industry In Africa

Chris Dier-Scalise

For most people in support of a legal cannabis market, the social, medical, and financial benefits of a safe and well-regulated industry built on the cultivation of cannabis are overwhelmingly positive and self-evident.

However, even advocates of the industry might not consider the potential ways in which legal cannabis might impact emerging economies, whose social, medical and financial conditions are unlike many of the more developed states that have seen successful legalization efforts.

A new research report from cannabis research firm New Frontier Data looks at the potential benefits a legal cannabis industry might have for several fast-growing African nations. The “Africa Hemp & Cannabis 2019 Industry Outlook” examines how, if thoughtfully implemented, cannabis cultivation can provide much-needed resources to aid in many of the most pressing problems being confronted by emerging market countries across the world.

Sustainable and Restorative Farming

The largest and most primary aspect of a cannabis industry is the agricultural cultivation of the plant. It is fitting then that a majority of the 13 nations surveyed in the report have a strong basis in agriculture. According to the report’s findings, agriculture accounts for more than 10 percent of GDP in 10 of the countries surveyed, with anywhere from 60 to 80 percent of the nations’ workforces making a living off the land.

However, due to this heavy reliance on farming, as well as unreliable infrastructure, environmental and climate hazards and myriad other factors, farming yields are far worse than they could be in many of these areas.


Source: New Frontier Data

The report suggests that implementing cannabis and hemp cultivation in these areas could prove to be a non-resource intensive approach to improving yields.

According to the report, “beyond requiring relatively little water and nutrients to cultivate, it is capable of revitalizing and cleansing the areas in which it grows. When used as a rotational crop, hemp can stem the depletion of nutrients in overfarmed soil, boosting crop yields and revenues.”

Beyond the benefits of replenishing vital nutrients to the soil, hemp seed has the potential to serve as a calorie- and protein-rich dietary staple. The water- and resource-efficiency of hemp seed also widens its potential use as a cost-effective feed or livestock.

Improve Access To Affordable Palliative Treatment

Eight of the countries surveyed spend 7 percent or more of their GDP on healthcare, and five of those have a greater than 9 percent incidence of HIV/Aids. The causes behind these figures are numerous and complex, and the potential solutions even more uncertain.

However, the report argues that by introducing medicinal cannabis and hemp treatments throughout the continent, patients suffering from a variety of debilitating symptoms could find ready access to much-needed pain and symptom management. The benefits of medical cannabis treatments could be especially beneficial for patients in areas without robust healthcare infrastructure.

Per the report:

Cannabis is used to treat seizures and other neurological disorders, along with cancer, chronic pain, HIV/AIDS, anxiety and depression, and myriad other conditions of varying severity. Legalization of medical cannabis has also led to reducing healthcare expenditures in markets around the world, as its cost is lower than many other medical treatments. Furthermore, cannabis-based treatments do not require expansive medical infrastructure, and can address poor medical delivery coverage when localized in communities.

The report singles out digital cannabis healthcare platform HelloMD, which announced in March 2019 its plan to expand into Africa. While this nascent experiment will be limited by those countries that permit medicinal treatment (currently just South Africa and Zimbabwe) it will be the first demonstration of the potential scope and scale of medical cannabis treatment on Africa’s existing healthcare infrastructure.

Employing a Young and Underutilized Workforce

In a 2018 survey of citizens of 34 African nations, “Decent Work & Economic Growth” was far and away the number one prioritized of the United Nations’ 17 Sustainable Development Goals.


Source: New Frontier Data

This is unsurprising given the high unemployment rate among many African countries. Ten of the 13 highlighted in the report had unemployment rates at or above 10 percent, with South Africa the highest at 28 percent.

These high unemployment rates are particularly concerning given how youthful the demographics of many African nations are. With Africa’s workforce projected to grow by as much as 40 percent in the next decade, this problem only promises to get worse before it gets better.

While time and greater investment in education and job training resources could prove a good long term solution to the job crisis, a well-orchestrated cannabis industry could provide an immediate flush of low-skill, high paying jobs in an industry that is already a major component of many nations economies: agriculture.

The report argues that the legalization and licensing of these cannabis grow operations could “provide many jobs to low-skilled workers, including in roles related to cultivation and biomass processing. A legalized cannabis industry can likewise attract foreign direct investment, catalyze infrastructural development, facilitate skills transfer, or introduce technology to enable the manufacture of higher-value goods.”

Ultimately, this final point is the strongest argument for how a well-implemented cannabis industry could provide a developing nation early access to a global industry. However, the report makes clear that it is up to each nation to determine how to best capitalize on this opportunity for the benefit of their populous.

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.