South African grain sector sees bud of potential in cannabis oil

Budding potential for grain farmers could come in the form of cannabis oil, but it’s early days yet and the policy framework remains shrouded in a purple haze.

“The cannabis thing – we are watching that with interest,” Tobias Doyer, the CEO of industry group Grain SA, told Daily Maverick at the annual Nampo exhibition near the Free State town of Bothaville.

“There are substantial investments going into the Eastern Cape. It is seen as an important opportunity because there are lots of people who have farmed it for a long time illegally and now it’s becoming legal,” Doyer said.

He was referring to the flowering medical marijuana sector in the Eastern Cape, which recently got a boost with Medigrow’s launch of the province’s biggest medicinal cannabis project yet: an indoor facility in the Coega Special Economic Zone near Gqeberha that will supply the export market.

Read more in Daily Maverick: All systems grow — medicinal cannabis economy gets boost in Eastern Cape

The economic potential of medical marijuana – now legal in many developed economies – has long been seen as huge and low-hanging fruit for South African farmers and others to pluck.

A 2019 report by market researcher Prohibition Partners estimated that the industry could contribute more than R100-billion to South Africa’s economy and create 130,000 jobs – almost as many as the number of people employed in the flourishing citrus sector.

“The biggest challenge, to my mind, is the legal environment. It’s not sorted yet. It’s still a wing and a prayer to invest millions into cannabis,” Doyer said.

Possession for private consumption of cannabis is now technically legal – or not illegal – in South Africa. But for commercial purposes, only the medical and hemp sectors have legal status, and the full policy framework on all fronts is still evolving.

Cannabis oil seed market

What is of interest to the grain sector, which is in the food business, after all, is the potential for a cannabis oil seed market.

Hemp and cannabis belong to the Cannabis sativa plant family, but the former has far less THC – the stuff that gets you stoned – than the latter. And oil, with a reportedly nutty flavour, can be derived from the seeds.

“A very interesting perspective is that cannabis is also an oil seed. When I looked at it the first time I thought the medical market is difficult for grain farmers,” Doyer said.

“Suddenly we sat up and thought that might be interesting as an alternative oil seed. We have sunflower, soybeans and canola. It might not be that far-fetched.”

Doyer was also clear that Grain SA has not taken an official position on the issue and is waiting to see a solid and certain legal framework in place, among other things.

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So grain farmers in South Africa are not about to rush out and start planting cannabis for the oil seed, with the official Crop Estimates Committee adding it to its list of summer crops.

But what is of interest, given the hype around medical marijuana and the potential of the various strands of the cannabis economy against the backdrop of growing global acceptance, is the evolution in Grain SA’s thinking on the matter.

When this correspondent asked a senior Grain SA executive a few years ago about the potential for diversifying into cannabis, he looked at me as if to say: “What have you been smoking?”

With the growth of the industry globally and the prospects presented by oil seed, the response to such questions is cautious but no longer perplexed.

Cannabis cultivation may go against the socially conservative grain of many commercial South African farmers, but they are also innovative and quick to embrace new technology and markets – provided policy and the law are gin-clear. And maybe down the road, parts of South Africa’s grain sector may be cooking with cannabis seed oil. DM

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