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Zimbabwean farmers to cash in on cannabis global boom

by Staff reporter
11 May 2022 at 11:36hrs | Views
Zimbabwean farmers looking to cash in on a global boom in medicinal cannabis face a litany of costs and regulatory barriers, but growers like Munyaradzi Nyanungo are betting it will boost their fortunes after decades of economic decline.

The southern African country became one of the first in Africa to legalise the production of medicinal cannabis in 2018, hoping for a fresh income stream of badly needed export dollars, and has issued 57 licences.

With finance coming in from foreign companies like US-based King Kong Organics, black farmers like Nyanungo, 35 - who have struggled to prosper in a moribund economy - are looking to branch out from traditional crops like tobacco into cannabis.

"We stand to sell cannabis at $25 per kilogramme, which is five, six times more than what a good tobacco crop can give you. We are actually sitting on a green gold mine," Nyanungo said.

The global cannabis industry could be worth $272 billion by 2028, according to Barclays analysts, and Zimbabwe's Finance Minister Mthuli Ncube has said the country wants at least $1 billion of that - more than it currently makes from its top agricultural export tobacco.

Less harmful alternative

As Africa's biggest tobacco producer, Zimbabwean officials also recognise the need to diversify away from the addictive narcotic that is proven to be ruinous to the health of smokers and those around them.

New fix needed for Malawi economy as tobacco sales plummet

Low prices at auction have left tobacco growers less than optimistic about the future of the industry in one of the poorest countries in the world - Africa's Malawi. Here, tobacco represents 70 percent of the nation's export income. But some tobacco growers are opting to cultivate other cash crops - including cannabis, with hopes of higher profits.

Cannabis is seen as a less harmful alternative to cigarettes and its cannabidiol (CBD) widely accepted as a natural remedy.

But challenges remain, not least the huge cost of getting set up amid tight regulations, such as the requirement to use a greenhouse to meet the criteria for "organically grown" cannabis - necessary to be able to sell it to the medical market.

Nyanungo said, trimming the distinctive fan-shaped leaves on his farm:

A greenhouse is very costly.

"This entire greenhouse: you need something around $500 000 just to set up the structure," not including the drip system and seed inputs.

Nyanungo's US-based partner, King Kong Organics, which supplies seed and other inputs, purchased the greenhouses under an off-take agreement that will see the company buying the cannabis crop for processing.

That, he said, brings the cost of growing a single hectare of cannabis up to $2.5 million. He and other producers are currently lobbying the government to relax the rules - and lower the costs.

California cannabis factory eyes federal legalization

A company behind a cannabis mega-factory in California has its sights set high, as demand for marijuana products soar during the pandemic and the expectation for federal legalization grows. Diane To reports.

The Zimbabwe Investment and Development Agency, which licences cannabis producers, did not respond to a request for comment.

"If anyone is going to grow medical grade cannabis, it's going to be at their risk because there are too many variables," said Zorodzai Maroveke, CEO and founder of Zimbabwe Industrial Hemp Trust.

Maroveke added:

Still, the rewards could be substantial.

Operating since 2003, Nyanungo's Forest Farm has been growing traditional crops of tobacco and maize, and raising cattle, but acquired the cannabis licence in 2020. Of his 80 farm hands, 20 now work on the cannabis plants.

He expects to earn $2.5 million in profit from the first harvest in August, significantly higher than what he earned from his other crops and livestock.

Source - Reuters