Big Pharma’s Cannabis Entry: Big News or Bad News?

The cannabis industry has been grown off the back of pioneers. Small, individual growers and producers who fiercely believed in the benefits of this once illegal and misunderstood medicinal herb. Collectively and alone they have lobbied, taken risks, paid for research and development, invested in and built supply chains and – off the back of growing demand and mounting evidence – countries all over the world have decriminalised and opened the pathways for CBD to enter the mainstream health eco-system. As a result the industry is populated by multiple smaller players sharing the market space.

As cannabis goes fully mainstream, some of the world’s biggest and most powerful pharmaceutical companies are taking a bite into the promising and profitable world of cannabis. Mega consumer goods companies are circling around the use of CBD in cosmetics too, awaiting clearer regulatory guidelines before bringing big money into the game.

Enter CBD into the formal medical sector and GW Pharmaceuticals brought the CBD epilepsy drug Epidiolex onto the U.S. market at the end of 2018 and performing beyond all expectations doing $296 million in its first year of trade, spurring a flurry of interest from other pharmaceutical companies.

In Europe, pharmaceutical company STADA signed an exclusive deal with cannabis company MediPharm Labs to supply them with medical cannabis for distribution in Germany, where the government has given the green light for the use of medical cannabis for its 83 million inhabitants who benefit from a sophisticated healthcare service infrastructure.

The global CBD industry is projected to be worth $16.8 billion by 2025 and the global medical marijuana industry worth $73.6 billion by 2027.

Speaking to Food for Mzanzi, Hein Gerwel, a lecturer at the Department of Agricultural Economics at Stellenbosch University warns that South Africa could face the kind of ‘corporate capture’ that has plagued more developed cannabis economies. He says we need to protect and empower small scale rural farmers who have been growing cannabis for centuries already and who should not be side-lined in the goldrush to supply a hungry and rapidly expanding global market for cannabis products.

Lesotho was the first African country to legalise the cultivation of marijuana for medicinal purposes and is hoping that a legalised industry will be a job creator for many of its poorest citizens. Although Lesotho has long supplied the recreational cannabis market, the transition to medical marijuana has raised complex challenges around licensing and the high tech environments needed to become an approved supplier. High capital investments mean that most hand-to-mouth growers are left out or at the mercy of criminals who raid their crops and supplies. South Africa’s Finance Minister, Tito Mboweni, is a known advocate of the cannabis industry, not least because he is eyeing the R27 billion that cannabis products (without the significant contribution of CBD) are expected to contribute to the economy in the next three years. The South African cannabis and CBD industry is not short on activists but in a country where legal frameworks are porous and corruption is rife, it will take a fierce set of protectors and a strong regulator to ensure that the pioneers are also the beneficiaries.