—Tanzania seen as the latest country engaged in a growing expansion of cannabis opportunities, while looking ahead to Europe
By Serge Chistov, Honest Marijuana
There is a trend towards legalization of medical cannabis in Africa, with countries like Uganda, Kenya, South Africa, and Lesotho leading the way. Other coastal nations like Tanzania are seeing this trend, as well as the economic benefits that come with it in terms of tax revenue. Watching what is happening in Uganda, with the government there setting up export agreements to Germany, it comes as no surprise that cannabis is a valuable commodity that cannot be ignored. “According to Verified Market Research, the Global Legal [Cannabis] Market size was valued at USD 20.73 Billion in 2020 and is projected to reach USD 111.31 Billion by 2028, growing at a CAGR of 23.43 % from 2021 to 2028.”
An interesting opportunity for American cannabis industry entrepreneurs is to set up growth operations in Africa with a view to supplying Europe. Tanzania has the perfect coastal location to facilitate such an endeavor and is far more likely to be interested in the opportunity compared to the United States. The ongoing federal ban on cannabis in the US means that export opportunities are nil, so becoming a multinational has real merit. That’s why US cannabis companies are making plans to set up operations in that part of the world.
Given that it is not possible to grow in the US and export to Europe via the Atlantic Ocean, Africa offers a viable means for American companies to also enter the European market. Africa is poised to expand into these opportunities, as trends are making clear that there is diminishing objection in many parts of the continent towards the cultivation and export of medical cannabis. Fueled in part by the economic standstill most countries have endured due to the COVID-19 pandemic, there is a move towards ending the moral stigma, to say nothing of legalities, around cannabis. Case in point: the growth of medical cannabis exports from South Africa to Europe is pushing their market towards the $7 billion dollar mark by the end of 2023. This is not an opportunity that can be overlooked.
The opportunities are not all about exports to Europe either, but are also focused on bringing the benefits of cannabis to the local population. For example, by partnering with Your Local Clinic, a new line of 25 medical clinics that will be set up in Tanzania, providing needed medical resources for over 60% of the local population, Honest Marijuana Company will have a ground floor opportunity to reach medical practitioners locally. While currently still not legalized there, New Frontier Data shows that over 3.6 million Tanzanians currently consume cannabis. Were it to be legalized, there is an internal revenue opportunity as well as an exportable one. African countries have shown interest in working with foreign investors to create revenue streams.
The reality for much of Africa is that illegal operations have been in existence for a long time, including exports to Europe. Morocco, for example, had supply lines to Europe that totaled over USD 13 billion annually in exports, employing over one million people. Creating a legal framework for these operations so as to benefit from the tax revenue was the next logical step and the Moroccan government took it. It is a question of time for other countries to decide to follow suit.
Bio: Serge Chistov is a cannabis industry expert and the chief financial partner with Honest Marijuana Company makers of eco-conscious cannabis. Honest Marijuana has taken every step possible to create clean, organic cannabis products for the discerning customer. Their goal is to educate about best practices and maintain ecologically sustainable production processes, such that their impact on the world, near and far, is always positive.