During his Budget Speech, Finance Minister Tito Mboweni said that there will be a change in policy regarding the cannabis industry so that it could become a potential source of revenue.
This is something that Lesotho has ventured into and it is starting to reap the profits.
Economist Jee-A van der Linde has been looking at the impact cannabis export has had on the Lesotho economy where, in 2017, it became the first African country to legalise the growth of cannabis for medicinal and research purposes.
If you consider the low-cost labour it has and the proximity to Europe in relation to other continents such as Asia or South America, it definitely entices investors.— Jee-A van der Linde, Economist
In 2018 it pumped in around 10 million Canadian dollars into the Lesotho Cannabis Industry and this prompted others to look into Lesotho's industry.— Jee-A van der Linde, Economist
It is currently not clear how much Lesotho is raking in with the cannabis exports but Van der Linde says the global legal marijuana market is estimated to reach $146 billion by the end of 2025.
But what would this mean for the South African economy?
Tapping into the cannabis industry could certainly help in tackling some of these issues that South Africa faces and we must never overlook the revenue gain that can nb collected from taxing the cannabis industry.— Jee-A van der Linde, Economist
To hear the rest of the conversation, listen below:
This article first appeared on CapeTalk : How dagga could become a cash cow for South Africa's economy