Latest news with #CannabisforPrivatePurposesAct
Daily Maverick
5 days ago
- Business
- Daily Maverick
Cannabis Expo shows how private sector is rolling in face of hazy government policy
The Cannabis Expo underlined the energy of private businesses that are forging ahead with investment, sales and job creation in the face of dazed and confused government policy that appears to have been crafted over a bong. Pink Floyd's 'Another Brick in the Wall' blared from the DJ's stage and the sweet aroma of cannabis hung in the crisp autumn air at 10.50 on a Saturday morning. On its second of three days, the Cannabis Expo was in full swing at the Sandton Convention Centre, which bent its rules to allow for a 'smoking' section outside, which was mostly a toking section. Cannabis consumers are generally a laid-back bunch, but the expo underlined the energy of private businesses that are forging ahead with investment, sales and job creation in the face of dazed and confused government policy that appears to have been crafted over a bong. There were more than 100 exhibitors from South Africa and abroad, showcasing — and hawking — everything from edibles to rolling gadgets to water bongs to plant fertilisers. On the main stage, panels discussed subjects such as 'Women & Weed: Wellness, Empowerment and The Female Body', 'Potential Cannabis Commercialisation Benefits', and 'How to Choose The Right Cannabis Product for You'. The times they are a'changin', and tellingly, Farmer's Weekly had a stand. Cannabis is, after all, grown, and if the government could grasp this low-hanging fruit, the agricultural sector could reap a bountiful harvest. But the surging commercial sector for cannabis products is unfolding beneath a haze of legal and regulatory uncertainty. This genie was freed from the bottle by the landmark Constitutional Court decision in 2018 that, in effect, legalised the recreational use of cannabis — as an adult South African, it is your constitutional right to consume cannabis. In May 2024, the Cannabis for Private Purposes Act gave the green light for adults to consume, cultivate and possess cannabis for private use — but it leaves the cannabis commercialisation on display in Sandton this past weekend in the dark. One factor that undermines efforts to get a clear and straightforward policy is the lack of a single industry body to represent commercial cannabis interests. 'The industry itself is not represented. There is not a single industry body that represents every facet of the cannabis industry. This makes it virtually impossible to make representation on behalf of the industry,' advocate Simi Pillay-van Graan, the CEO of Trikar Enterprise Solutions, told Daily Maverick on the sidelines of the expo. That is a clarion call for a Cannabis Council to take up the cudgels. What this means Billions of rands in investment and tax revenue are going up in smoke because of government — read ANC — inertia on what should be a straightforward policy. If you are an adult who consumes cannabis and buys from one of the many retail outlets that are springing up all over the show, the vast majority of your purchases are technically illegal. Buying such products with your card also means that South Africa's banks are involved in illicit sales. Crafting policy to allow for the effective commercialisation of a sector that is already forging ahead is crucial. Brett Pollack, a lawyer who heads Harambe Solutions, told Daily Maverick that the industry was '… moving along ahead of government without the laws in place. So right now we are in a liminal space. We don't have a commercial framework, which is exactly what we need to build an economy out of this.' But an economy — one that is not yet subject to sin taxes for THC consumption — is indeed growing in the shade of perplexing policy. And things are rolling along, in some cases quite literally. At the stand for Pretoria-based Aaptwak Foundation & Club — basically, a cannabis club — Walter Pretorius displayed his skills in the fine art of speed rolling. The rules are simple: the paper can be pre-licked with a filter (if you choose) and everything prepared beforehand. It just has to be smokeable to qualify as complete. He was clearly a practised hand. On his rolling platform, this correspondent watched Pretorius three times over the course of the morning. His first go was a warm-up that took more than six seconds to complete — think of Usain Bolt warming up for the 100m dash. The third time I witnessed Pretorius in action (see video), it took him 3.52 seconds to roll a joint. If you blinked, you might have missed it. Walter also displayed an 80g monster joint that was longer than most of the trout this angling correspondent has caught in a lifetime of fishing. Presumably, that would have taken a little longer than 3.52 seconds to roll. By contrast, government policy on this front is moving at a snail's pace. It is another brick in a wall of what should be a window of transparency with the sunlight shining on a field of dreams. DM
Daily Maverick
22-04-2025
- Business
- Daily Maverick
Loaded for Bear: It's a fiscal sin that Treasury has no sin tax on cannabis products
A cannabis sin tax could conceivably remove or reduce the perceived need to raise VAT by 0.5 percentage points. In the 2022/23 fiscal year, Canada's federal government collected more revenue from the sale of legal cannabis products than it did from beer and wine – a first since the legalisation of recreational pot for retail sales in 2018. As a Canadian, trust me, that is saying something. To wit, federal excise duties on cannabis products that year amounted to CA$894.6-million (R12-billion), slightly exceeding the CA$887.7-million raised from beer and wine sales. And that does not include the revenue that flowed to provincial governments from pot, beer and wine. In the same fiscal year in South Africa, National Treasury reaped R45.1-billion from alcohol taxes. Cannabis was – and remains – the missing link on the sin tax front in South Africa, and Treasury is missing out. 'Cannabis products are not yet part of excisable products, meaning they are not liable to health taxes (i.e. so-called sin taxes),' Treasury's media unit told me via email in response to my queries on the matter. 'The legislative framework for cannabis is still broadly limited to medicinal use or 'private use' and has not yet attained commercial status for possible application of excise duties.' As I recently noted in this column, pot policy in South Africa remains shrouded in a purple haze of uncertainty. This was thrown into sharp relief last month when Health Minister Aaron Motsoaledi banned the sale of edible cannabis products and then did an abrupt U-turn. But the majority of pot products being sold openly in shops across the country – edible or smokeable – are technically illegal in the first place, which explains why they are not yet classified as 'excisable'. As a consumer of such products, I can attest to the fact that the shops that sell cannabis-infused goodies appear, for the most part, to be paying VAT, as you get a receipt and card machines are used. It's not a 'cash only, wink wink, nudge nudge' kind of business. Such transactions all go through banks, so South Africa's banking sector is also complicit in the illicit sale of cannabis. This genie was freed from the bong by the landmark Constitutional Court decision in 2018 that in effect legalised the recreational use of cannabis. In May 2024, the Cannabis for Private Purposes Act gave the green light for adults to consume, cultivate and possess cannabis for private use. So, the rough foundations are in place for Treasury – which clearly needs every rand it can lay its hands on – to impose health or sin taxes on cannabis products. How much could it raise? That's hard to say. But conceivably, it could remove or reduce the perceived need to raise VAT by 0.5 percentage points. I have not seen an official estimate on the number of bud shops in South Africa, but they have sprouted all over the place. While such outlets are still outnumbered by bottle stores, it is clearly a business sector in a growth phase and is generating revenue from sales that could be subjected to health taxes. I mean, it's just a no-brainer. That the ANC is unable to pluck this low-hanging fruit is testimony to its general inability to craft coherent policy. It has so many competing interests – not to mention cadres coveting a piece of the pie for themselves – that many of the 'policies' that emerge resemble a stoner's epiphany. So, we have ridiculous situations such as the health minister doing an about-turn on the sale of a product that was being sold illegally for the most part and that should be subject to a health tax but is not because the legislative framework has not been extended to a vibrant commercial sector. In a nutshell If cannabis was subjected to a sin tax, the government could ease the tax burden elsewhere such as on VAT. The owners of such shops and their customers are – trust me on this – clearly not complaining. Imagine if you ran a bottle store and your booze was suddenly exempt from six taxes. You would have a liquidity boost of note. But it is astonishing that this cash-strapped government has not worked this out yet. And, at least some cannabis consumers would not mind paying a bit more for their dagga if it meant they did not have to pay an extra 0.5 percentage points for almost everything else they purchased. DM
