TerraLex Cross-Border Guide to Cannabis Guide

Welcome to the Terralex cross-border cannabis guide

This guide offers a cross-border analysis on the current state of regulation for various cannabis products, including medical marijuana, recreational marijuana, hemp, and CBD, as well as details on any applicable financial incentives, special tax considerations, and investment limitations.

How to Use: You can use the tools below to create bespoke reports for the jurisdiction(s) and topic(s) covered. Click into single jurisdiction for one location or use the compare tool to compare multiple jurisdictions. Select the jurisdictions and topics of interest to create your unique report. You also have the option to print or download using the ellipsis button in the top right corner.

South Africa Cannabis Guide Guide

Date posted:
01/03/2023
Last update:
06/02/2024

Is medical marijuana legal in this jurisdiction?

Yes

1.1. Please describe the licensing requirements to grow (fees, process, restrictions, etc.).

The application for a license must be made to the Director-General of the Department of Health. The application must be accompanied by a prescribed application fee and at least contain the following information:

(a) The name and both residential and business addresses (both physical and postal) of the applicant

(b) The exact location of the premises where dispensing or compounding and dispensing will be carried out.

(c) Telephone number

(d) Email address

(e) Fax number

(f) Proof of registration with the relevant statutory health council.

The applicant will have to complete a supplementary course determined by the South African Pharmacy Council after a consultation with the Health Professions Council of South Africa and the South African Nursing Council.

A person who has been issued with such a license must:

a) keep a prescription book or permanent record for the cannabis grown for a period of 5 years from the date of sale.

b) ensure that the dispensary and any premises where the cannabis is grown is suitable for growing cannabis.

c) keep the Cannabis under suitable storage conditions.

d) not keep Cannabis on the premises other than in a demarcated area

e) secure the premises where the Cannabis is grown.

f) conspicuously display the license in the premises

g) comply with the conditions of the license.

1.2. Please describe the licensing requirements to manufacture products.

The application must be made to the Chief Executive officer of South African Health Products Regulatory Authority ('SAHPRA'). The application must be accompanied by documentary proof of the following:

a) the particulars of the owner of the business

b) the qualifications of key personnel responsible for the manufacture

c) the ability to comply with good manufacturing as determined by SAHPRA, which must include-

  • a copy of a local area plan of the location of the business premises indicating all adjacent properties and the nature of the business being carried on, on such properties.
  • a floor plan of the building in which the business premises are situated.
  • a plan of the actual layout of the business premises
  • an inventory of equipment to be used in conducting the business.
  • a manual of procedures and practices to be implemented to ensure the safety, efficacy and quality of medicines, or Scheduled substances to be manufactured or distributed and sold

d) of the payment of the prescribed application fee

The applicant must:

  • appoint, and designate as such a responsible pharmacist who will control the manufacturing (as well as the importation, exportation, wholesaling, or distribution if applicable) of the Cannabis.
  • appoint and designate a natural person who resides in South Africa, who shall be responsible to SAHPRA for compliance with the Medicines Act.
  • SAHPRA will inspect the business premises specified in the application.

SAHPRA may issue a license once they are satisfied that the requirements of the Medicines Act have been satisfied.

A person who holds such a license must pay a prescribed annual fee for continued registration.

1.3. Please describe the licensing requirements to distribute products to other re-sellers.

Refer to 1.2.

1.4. Please describe the licensing requirements to distribute products directly to consumers.

Refer to 1.2.

1.5. Please describe the limitations on purchasing and marketing.

To date, only one medical cannabis product, dronabinol, has been approved for marketing in South Africa.

1.6. Please describe the regulations around potency, formulation, and combining with other products.

Cannabis that has been processed into herbal medicine must be cultivated under standardized conditions such that the content of the constituents (tetrahydrocannabinol ‘THC’ and Cannabidiol) remain constant. The protocols of the operations undertaken during the cultivation must be kept available. For a selection of the other constituents, fingerprinting with a suitable technique, such as GC-MS, GC, HPLC or TLC will be acceptable.

1.7. Are there municipal, regional, provincial, or other licenses required?

This will be case dependent.

1.8. What industries have been most impacted by the legalization of medical marijuana and how?

The South African Cannabis industry in its entirety has been positively impacted by the legalization of medical marijuana because there can now be large scale cultivation, processing, product development, retail, and export of medical cannabis products.

Is recreational marijuana legal in your jurisdiction?

Yes

2.1. Please describe the licensing requirements to grow (fees, process, restrictions, etc.).

Refer to 1.1.

2.2. Please describe the licensing requirements to manufacture products.

Refer to 1.2.

2.3. Please describe the licensing requirements to distribute products to other re-sellers.

Refer to 1.2.

2.4. Please describe the licensing requirements to distribute products directly to consumers.

Refer to 1.2.

2.5. Please describe the limitations on purchasing and marketing.

Cannabis may only be possessed and used by people over the age of 18. Any recreational use, possession or cultivation of cannabis which is not done in by an adult in private is an offence under the Drugs Act.

Cannabis is classified as an undesirable dependence producing substance in terms of the Drugs Act, and violations of the Drugs Act carry sentences ranging between 12 months and 25 years imprisonment (with or without a fine), depending on the severity of the offence.

2.6. Please describe the regulations around potency, formulation, and combining with other products.

A person may have 600g in their private space or 100g in a public place but out of the view of the public.

2.7. Are there municipal, regional, provincial, or other licenses required?

Case dependent.

2.8. What industries have been most impacted by the legalization of recreational marijuana and how?

Refer to 1.8.

Is hemp legal in your jurisdiction?

Yes.

3.1. Please describe the licensing requirements to grow (fees, process, restrictions, etc.).

Refer to section 1.1

3.2. Please describe the licensing requirements to manufacture products.

Refer to section 1.2

3.3. Please describe the licensing requirements to distribute products to other re-sellers.

Refer to section 1.2

3.4. Please describe the licensing requirements to distribute products directly to consumers.

Refer to section 1.2.

3.5. Please describe the limitations on purchasing and marketing.

CBD products which are sourced from hemp must not be made up of more than 0,001% of THC.

3.6. Please describe the regulations around potency, formulation, and combining with other products.

N/A

3.7. Are there municipal, regional, provincial, or other licenses required?

Case dependent.

3.8. What industries have been most impacted by the legalization of hemp and how?

Refer to section 1.8.

Is CBD legal in your jurisdiction?

Yes.

4.1. Please describe the licensing requirements to grow (fees, process, restrictions, etc.).

Refer to section 1.1.

4.2. Please describe the licensing requirements to manufacture products.

Refer to section 1.2.

4.3. Please describe the licensing requirements to distribute products to other re-sellers.

Refer to section 1.2.

4.4. Please describe the licensing requirements to distribute products directly to consumers.

Refer to section 1.2.

4.5. Please describe the limitations on purchasing and marketing.

N/A

4.6. Please describe the regulations around potency, formulation, and combining with other products.

There must be a maximum daily dose of 20 milligrams of CBD, or if made from raw cannabis products must contain (0.0075%) of CBD and a maximum of 0.001% of THC.

4.7. Are there municipal, regional, provincial, or other licenses required?

Case dependent.

4.8. What industries have been most impacted by the legalization of hemp and how?

Refer to 1.8.

What is the agency (are the agencies) and relevant laws in this jurisdiction responsible for regulating cannabis and cannabis-related products?

The agency is the SAHPRA and the legislation responsible for regulating Cannabis is the Medicines and Related Substances Act and its regulations.

Are there any special financial incentives to spur cannabis industry development?

None at present. However, the South African government has developed and proposed a “Cannabis Masterplan” for Cannabis to Parliament which aims to provide a broad framework for the development and growth of the SA Cannabis industry to contribute to economic development, job creation poverty alleviation and rural development. This proposal displays an intent to bolster the industry and may lead to future incentives.

Are there special tax considerations related to cannabis commerce, not described above?

No.

Are there any specific investment limitations related to cannabis commerce, not described above?

Case dependent – certain cases may require an offtake agreement to be concluded prior to obtaining regulatory approval.

If any of the above are illegal or highly regulated, what are the prospects for adoption or loosening of restrictions? How would this be accomplished (legislature, regulation, voter initiative, courts, etc.)?

Any changes to the regulation of the industry will have to occur through the legislature. There are many activist and lobbying groups who engage with the regulator and other relevant authorities on a regular basis to this end.

What do you consider to be the top recent cannabis developments in this jurisdiction?

The Cannabis for Private Purposes Bill which if signed into law will regulate the use of cannabis in private spaces.

What do you consider will be the top cannabis developments in the next year in this jurisdiction?

See the previous answer

Please share any other issues relevant to doing business in the cannabis industry in this jurisdiction.

None at present. However, there are many business opportunities for people in the Cannabis industry in South Africa as the industry boasts an impressive, forecasted valuation over the next 5 years.

Disclaimer: This guide contains summaries of general principles of law. It is not a substitute for specific legal advice and should not be relied upon in relation to the application of the law or subject matter covered.