Cannabis update for South Africa – Commentary

Introduction
Cannabis master plan
Legislative developments
Application for hemp plant permits
IP considerations
Comment

Introduction

The Department of Agriculture, Land Reform and Rural Development (DALRRD) presented its cannabis master plan to Parliament at the end of August 2021, detailing how cannabis could be incorporated into South Africa’s business sector as part of the government’s ongoing drive towards legalisation and commercialisation. It is estimated that the potential size of the cannabis industry in South Africa is about 28 billion rand, and that up to 25,000 jobs could be created through the development of this industry. A lucrative cannabis industry in South Africa should also serve to attract foreign investment into South Africa, and build local businesses and the export market for South African cannabis products.

Cannabis master plan

However, DALRRD has indicated that a number of issues first need to be addressed – including regulations, the distribution of seeds and education initiatives – and has set out a number of pillars on which to build the plan:

• developing a new regulatory framework for both hemp and marijuana;
• developing a sustainable seed supply system, which will include:
  • compulsory registration;
  • certification schemes;
  • import and export control systems;
  • variety control and listing; and
  • seed testing;
• supporting research and development programmes for the South African cannabis industry;
• mobilisation and supporting farmers to participate in the cannabis value chains;
• developing new domestic and export markets for the South African cannabis industry;
• supporting a wide range of suppliers, including indigenous growers and sellers, to participate in the cannabis value chains for sustainable growth and development of the industry;
• supporting the growth and development of the manufacturing sector for cannabis products;
• providing a framework on education and training matters in support of the cannabis industry; and
• implementing information and awareness programmes.

The master plan is currently under discussion at the National Economic Development and Labour Council.

Legislative developments

Although hemp and marijuana both belong to the species Cannabis sativa, the growth and use of marijuana varieties with tetrahydrocannabinol (THC) levels of more than 0.2% are regulated separately from those with levels below this, and are subject to the provisions of the Medicines and Related Substances Act and the Drugs and Drugs Trafficking Act. Legislation relating to the use, possession and cultivation of cannabis that has THC levels greater than 0.2% by an adult for personal (ie, recreational) use is already under development. The Cannabis for Private Purposes Bill, which was tabled in Parliament in September 2020, is aimed at giving effect to a Constitutional Court judgment which held that certain provisions of the Drugs and Drug Trafficking Act 1992 and Medicines and Related Substances Control Act 1965 are unconstitutional and which provided Parliament 24 months to correct.

Application for hemp plant permits

Linked to the master plan, the minister of DALRRD has recently announced the opening of an application process for hemp plant permits as of 29 October 2021. This follows the declaration of hemp as an agricultural crop under the South African Plant Improvement Act, which provides for import and export control of certain plants and propagating material, aimed at the maintenance of the quality of these plants and propagating material for agricultural and industrial purposes.

IP considerations

It will soon be possible to obtain a plant breeders’ right in South Africa for declared varieties of Cannabis sativa that meet the requirements for a plant breeders’ right. However, further amendment of the regulations, including the plant breeders’ rights regulations, is also necessary, for example in regard to the provision of a certificate for hemp plants certifying that the propagating material of hemp varieties intended for cultivation for agricultural and industrial purposes has a low THC content, not exceeding 0.2%. It remains to be seen whether marijuana varieties that have THC levels greater than 0.2% will also be declared as a prescribed plant in terms of the Plant Breeders’ Rights Act, and if so, what additional regulation might be implemented in respect of such varieties.

Within the trademark context, there are existing updated Guidelines on the Examination of Trademark Applications that relate to cannabis. According to these guidelines, cannabis-related trademark applications will be accepted, on condition that the applicant undertakes that the products comply with the standards set by the Minister of Health. Non-compliance with these standards would render the sale of the product and its trademark application(s) contrary to law. It is likely that additional updates will be required to the trademark guidelines once the regulatory framework for hemp and marijuana have been finalised in terms of the cannabis master plan.

Comment

There is now global awareness of the benefits of cannabis products based both on existing traditional knowledge and use, and exciting new innovations in the space. This provides a great opportunity to leverage the South African climate, existing South African growers and sellers and traditional knowledge relating to cannabis cultivation and use. However, there is a need to act not only responsibly and equitably in regard to regulation of this space, but also swiftly, so that South Africa is not left behind advances in the rest of the world.

For further information on this topic please contact Joanne van Harmelen at Edward Nathan Sonnenbergs Inc by telephone (+27 21 410 2500) or email ([email protected]). The Edward Nathan Sonnenbergs Incwebsite can be accessed at www.ensafrica.com.