Zimbabwe is one of the few African nations hoping to make it big from the global cannabis boom. The Government of the southern African nation is aiming to establish a billion-dollar industry for itself by 2028 through cultivation and strategic investments.
Zimbabwe became the second African nation to legalise cannabis for medical and industrial purposes in 2018, establishing a legal and political environment to foster the growth of this industry. Medical cannabis’ production is now governed by the Medicines Control Authority of Zimbabwe (MCAZ), which allows for the cultivation of high-THC as well as CBD cannabis – although domestic consumption of both remains illegal. The Zimbabwe Investment and Development Agency (ZIDA) is responsible for facilitating national and international investments in the cannabis industry.
Hemp, which has also become a newly regulated crop, is regulated by the Agriculture Marketing Authority (AMA), offering an easier and cheaper access pathway for cultivation. However, the attractive business value of the cannabis industry comes from the medical cannabis industry, which has much higher establishment costs. High licensing fees (currently costing US$50,000) as well as additional monitoring and quality assurance costs has meant that a national cannabis industry has been slow to develop, and is more vulnerable to corporate capture.
Since legalisation, the Zimbabwean Government has partnered with various organizations such as the Zimbabwe Industrial Hemp Trust (ZIHT) and its own cannabis research institute, Kutsaga Research, to further expand the technical and business knowledge around cannabis, hemp and CBD.
Through these research and cannabis advocacy organisations, the Government is hoping to develop a major economic hub which will contribute significantly to the national fiscal situation. The urgency to find an alternative cash crop comes from Zimbabwe’s perception of a global move away from tobacco: the World Health Organisation’s campaigns against tobacco cultivation and has prompted the nation to explore other agricultural products. Other tobacco-cultivating nations, like Malawi, are also looking to transition from tobacco to cannabis cultivation to avoid being left behind.
Playing cannabis catch up
According to the Minister of Finance, Mthuli Ncube, the value of the global cannabis industry is expected to reach over US$200 billion by 2028, and the Government is hoping to capture at least one billion dollars of that global revenue through export sales tax. This is an ambitious plan, exceeding the total revenue that Zimbabwe currently makes from tobacco cultivation and sales. Cannabis consultancy Prohibition Partners estimated in 2023 that the Zimbabwean cannabis market was then valued at US$80 million dollars – meaning growth needs to accelerate exponentially more than it has six years from legalisation.
A significant drop in the number of growers awarded licenses may explain the slow growth. Only 59 cultivation licenses were issued since 2018, with many not having started production at all: the majority of awarded licenses are still building facilities. In an MCAZ 2022 report, not a single gram of cannabis had been exported yet. By the end of 2023, only two licensed companies have begun cultivating cannabis.
The Director of AMA has stated that a lack of funding, expensive barriers of access to the medical cannabis market, and the lack of technical know-how for cannabis and hemp cultivation explained this slow industrial growth. Drought and chronic electricity shortages are also hampering stable market development. In short, much needs to change around the market’s state for Zimbabwe to be on the right path to its billion-dollar goal.
Taxation despite growth issues
Seeking to stimulate investment and returns, the Government has taken several actions. A temporary tax rebate on capital equipment importation has been in place since 1 January 2023 to quickly attract CBD and hemp cultivators to Zimbabwe, expiring on 31 December 2024.
Even though the industry is still growing, the Minister of Finance is keen to begin collecting taxes on produced cannabis goods: he has proposed a “cannabis levy” of 10% on the value of exports of finished and packaged medical cannabis oils, 15% on bulk extracted medicinal cannabis oils needing further processing or packaging, and 20% on dried cannabis flowers.
However, spirits are still high for Zimbabwe’s plan for cannabis growth. According to Felisters Chikandiwa, Investments Manager at ZIDA, the winds of global cannabis investments will favour Zimbabwe.
“From 2019, MCAZ has licensed over 51 cannabis players, with 16 licensed by ZIDA and out of those, six are operational. The 16 licensed players indicated a total investment of US$212.7 million, with the six operational having invested US$40 million so far,” Chikandiwa said at a hemp symposium in July.
Modernising traditional markets
Cannabis consumption in Zimbabwe has a long history, particularly in the town of Binga, where the use of cannabis holds cultural and medicinal significance.
According to Dr. Kumbirai Mateva, Senior Research Officer at Kutsaga Research, the production, transportation, trade and consumption of illicit cannabis remains as a vital means of livelihood for many Zimbabweans amidst economic hardship and declining living standards.
“Illicit cannabis often generates more income than legal activities, and the income earned is frequently reinvested in legitimate activities such as food production, shelter and children’s education,” Mateva told TalkingDrugs.
“The legalisation of cannabis is not primarily aimed at providing alternative livelihoods for illicit producers, but rather at attracting foreign and local investment and promoting the legal industry as a key economic sector. Many people, including illicit cultivators, are unable to participate in the legal market due to barriers such as high license fees,” he added.
These concerns have been echoed by researchers who highlight that legal cannabis in Africa risk leaving behind many traditional cultivators from the illicit market who cannot afford to participate in the legal economy.
Regulatory oversight of medical cannabis
Dr. Mateva added that policymakers and advocates need to recognise the cultural and economic importance of cannabis for local communities.
“They should be aware that illicit cannabis markets will persist unless policy reforms address local concerns. Policymakers should actively engage cannabis users, producers and traders to ensure that diverse voices are heard and taken into account in decision-making processes,” he told TalkingDrugs.
“Legislators and policymakers should be mindful of the risk of large corporations dominating newly legalized cannabis markets. They should prioritise the interests of small producers and support their participation at every stage of the legal process and its implementation for instance, through the formation of small producer cooperatives,” said Dr. Mateva.
The Zimbabwean market will require some changes to foster local growth and the development of national enterprises to ensure that it can ride the global wave of cannabis financing. This will mean more flexibility in licensing processes, coupled with assistance for traditional cultivators to enter the legal market. Until then, Zimbabwe will struggle to grasp its dream of cannabis gold.
