All systems grow — medicinal cannabis economy gets boost in Eastern Cape

Medigrow CEO Edgar Adams (left) signs a memorandum of understanding with the Eastern Cape Rural Development Agency’s acting chief executive, Gcinumzi Qotywa, while MEC Nonkqubela Pieters looks on.Photos: Supplied

By Estelle Ellis

5 May 2024

A new investment by Medigrow in the Coega Special Economic Zone will provide jobs and help to establish the province as a leader in the field.

Inspired by cannabis’s potential as a medicinal product and in memory of his child whom he lost to cancer, Edgar Adams, the CEO of Medigrow, has launched the Eastern Cape’s biggest medicinal cannabis project yet: an indoor facility that will produce products for the export market.

The new facility is based in the Coega Special Economic Zone near Gqeberha. Medigrow’s targets for export are the Americas, Australasia and Europe.

Production will start in eight to 12 months, since the company is still working on attaining international compliance.

The first products are expected to be the cannabidiol (CBD) isolate, a purified form of CBD, and tetrahydrocannabinol (THC), the psychoactive part of the hemp plant that also has many medical uses.

Medigrow is joined by the investment arm of the National Education, Health and Allied Workers’ Union as well as the investment company Al Mabroor Agri.

Started in 2017, Medigrow has, until now, purely been providing consulting services to medicinal cannabis producers, helping them to obtain the required licences, setting up all policies, procedures and infrastructure, and ensuring that offtakes are in place.

“Medigrow is a very unique cannabis company,” Adams said. “We look at the bigger picture from the start and embrace what South Africa needs. We believe the cake is so big that South Africans will never be able to compete with each other [in this field].

“When I was approached to start the Medigrow label in our country, my first reaction was ‘no, I am not interested’. We had just sold our medical waste company, which was the largest on the African continent, and it was time to take a break.”

But the potential healing capabilities of cannabis intrigued him.

“I lost a nine-year-old daughter [to cancer] and up until today there is still no cure,” Adams said, adding that he believed in the potential of medical cannabis.

mecical cannabis Eastern Cape premier Oscar Mabuyane holds a cannabis bud presented to him by Medigrow chief executive Edgar Adams during the launch in Gqeberha. (Photo: Supplied)

“I decided to take up this challenge and call on some of my colleagues who worked with me for 15 years in the medical waste sector to come on board.”

It took Adams and his colleagues months to figure out what the South African Health Products Regulatory Authority (Sahpra) would require of them in obtaining approval for their products.

But since then, he said, they have gained enough experience that they “are able to submit an application within 30 days”.

“A lot of local entities and individuals look at our [cannabis production] laws and start to criticise [them]. They attack the government for not levelling the playing fields.

“What they don’t understand is that we are dealing with a pharmaceutical product, so therefore we don’t have any shortcuts,” Adams said.

“The governance is strictly a compliance system that is based on quality and a quality system.

“In our world the buzz word is that every day is an audit day. For anyone to become compliant in South Africa, we need a Sahpra licence.

Read more in Daily Maverick: Healing illegally: The journey of medical cannabis

“We have more than 100 licences that have been issued in South Africa by Sahpra. About 90% of these will struggle to enter the European market. This facility gives us the edge,” Adams said.

Medigrow has also concluded an agreement with a Swiss company for a R30-million ethanol extraction machine as soon as adjustments have been made to the facility to eradicate dust pollution.

The initial investment pledge of more than R100-million for 2024 will be used to set up indoor growing, packaging, CBD extraction and cigarette manufacturing operations that will create about 90 jobs. There is also a further investment pledge of R1-billion over five years.

During the announcement of Medigrow’s new facility, Eastern Cape premier Oscar Mabuyane paid tribute to the province’s indigenous cannabis growers and knowledge holders who had “withstood harassment, the destruction and spraying of their cannabis crops with dangerous chemicals, arrests, criminalisation and even death to protect this wonder crop owned by Africans from being obliterated”.

Mabuyane added that the provincial government was concerned about the slow progress in implementing resolutions taken at the Cannabis Phakisa Action Lab in June 2023.

These included creating an enabling cannabis regulation framework for the commercial exploitation of the whole plant for all purposes.

Mabuyane said Medigrow’s investment was the biggest in this sector.

“We hope it will act as a catalyst for those investors, locally and internationally, who have identified the province as a strategic location for cannabis investment. We are ready as this province to host these investors,” he added.

The Eastern Cape MEC for agriculture and agrarian reform, Nonkqubela Pieters, said Medigrow’s 1,000ha cultivation target could potentially generate 3,000 jobs, and as many as 30,000 in the future.

She said the province’s universities – Nelson Mandela, Rhodes, Walter Sisulu and Fort Hare – and Fort Cox College, an agricultural school, will collaborate with the government and Medigrow to create a sector innovation programme to enhance the province’s global competitiveness. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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