Now is the moment for cannabis farming to resuscitate Eastern Cape small business

In his state of the nation address, President Cyril Ramaphosa placed a great deal of emphasis on recovery from the devastating economic impact of the Covid-19 pandemic.

Implementation of this recovery plan hinges on the local sphere of government.

In this context, legislating on the cannabis industry must be a priority for a government under pressure to unlock new economic opportunities.

SMMEs in local economic spheres could benefit significantly from cannabis farming.

This industry can potentially become lucrative in the Eastern Cape, where the unemployment rate is over 50%.

This is especially an alarm call when considering that the province is the second biggest in the country, yet has a plethora of agricultural opportunities.

Cannabis farming for medicinal purposes is one such opportunity.

However, the industry remains unlegislated, thus hindering economic development opportunities.

Scholars, policymakers and researchers alike postulate that legislating this industry can potentially provide impetus to local economic development through small-scale farming by SMMEs.

There has been an ongoing debate pertaining to the use of cannabis for medicinal purposes.

Cannabis farming is well poised to create entrepreneurial opportunities, particularly in the Eastern Cape, where agricultural land is underused for economic opportunities.

An investment in this industry can potentially ameliorate the sluggish economy.

The 1998 white paper on local government suggests four intertwined attributes of a developmental local sphere of government. These are capitalising on social development and economic growth, integrating and co-ordinating, inclusive development, and leading and learning.

In line with the white paper, cannabis farming for medicinal purposes should be integral to developing local economies.

SMMEs ought to be the backbone of local economic development, especially in rural economic spaces.

But they battle to access markets in industries catered to by large businesses due to strict market structures in a highly regulated situation.

SMMEs are vulnerable when collaborating with large firms since such relationships often favour the larger firms.

In this context, laws and policies regulating the cannabis industry could create an enabling environment for the SMME sector, promote economic growth and create desperately needed employment opportunities.

Sharp focus must be placed on the SMME sector when laws and policies are developed.

The white paper makes provision for a framework in terms of which municipalities can create their own plans for promoting economic development in their communities.

Developmental outcomes mentioned in the white paper entail provision of infrastructure and services to create a seamless system for the development of local economies.

Now is the moment the white paper envisions for cannabis farming to promote local SMMEs.

There is a strong advocacy urging municipalities and state-owned entities such as the Seda, the ECDC, the National Empowerment Fund and the National Youth Development Agency to come together in an endeavour to find commonalities in their support of the SMME sector, with a particular focus on cannabis farming as a new growth sector in the context of rural economies.

The department of small business development underscores that the small business sector is high on the government’s list of priorities to change the lives of people in both rural and urban environments.

Furthermore, the ministry is encouraging the youth of South Africa to be entrepreneurial and to create jobs.

This would contribute significantly to the national gross domestic product.

The cannabis industry must form part of the ministry’s strategy to ensure that SMMEs located in rural settings such as the Eastern Cape are not excluded.

Cannabis is an important sector, with the potential to address economic challenges, inequalities and poverty in rural communities.

In the National Development Plan, SMMEs were envisioned as contributing 90% towards job creation in South Africa by 2030.

The cannabis industry needs legislation as a matter of urgency to resuscitate the ailing economy.

Dr Siyabonga Mxunyelwa is a director at Lunika.