Booming demand for medicinal cannabis from Europe to Australia has seen an SA producer sell all of its output for next year in advance.
SafriCanna signed sale deals with Germany and Australia for the bulk of the production, Bassim Haidar, CEO of its largest investor, Optasia, said in an interview.
The company started construction of its facilities in Pretoria in 2019 and shipped its first flowers in June. In the same month, it agreed with German-based DEMECAN to supply medicinal cannabis flowers.
To meet rising demand, SafriCanna aims to increase production fivefold by 2024. It will spend $40m (about R692m) on expanding its facilities in Pretoria to produce 25,000kg of cannabis flowers a year from 5,000kg currently, Haidar said.
The legalisation of medicinal cannabis in more than 40 nations has led to an explosion in demand for a product that can be used to help treat nausea, Alzheimer’s and chronic pain.
SafriCanna is among a handful of African companies to have met the EU’s strict good-manufacturing-practice standards, allowing it to export cannabis flowers as an active pharmaceutical ingredient to Europe, Haidar said.
The global medical cannabis market was worth $26.1bn (about R451.8bn) in 2021 and is expected to expand at a compound annual growth rate of 10.4% through 2027, according to research firm IMARC Group.
A 51-year-old Nigerian-born entrepreneur, Haidar chose to invest in SA’s cannabis industry because of its infrastructure, cheap land and good climate, he said. According to Prohibition Partners, the country’s cannabis industry is predicted to be worth R27bn by 2023.
Other investors in the company include Nir Aloni and former MTN Group CEO Sifiso Dabengwa.
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