It has been almost four years since the Constitutional Court ruled that South Africans have the right to consume cannabis in the privacy of their own homes, effectively decriminalising the personal use of cannabis. Since then there have been important milestones that have enabled the emergence of South Africa’s fledgling cannabis industry.
In 2019 cannabidiol (CBD) was officially rescheduled a level 4 substance, meaning that all CBD containing preparations were rescheduled and fully legal. In June 2021, the much anticipated Cannabis Master Plan was unveiled detailing how cannabis can be incorporated into South Africa’s business sector as part of government’s ongoing drive towards legalisation and commercialisation. Government has good reason to want to focus on this industry, the Department of Agriculture, Land Reform and Rural Development estimates that the cannabis industry is worth an estimated R28 billion in South Africa, and could create between 10,000 – 25,000 jobs across the sector.
There has however been some frustrations along the way as the enabling legislation has not been forthcoming and the pace of change has been slower than anticipated. However, from the outset Goodleaf had a clear sense of the opportunity and acted quickly, launching their CBD wellness and lifestyle brand within a year of the Constitutional Court ruling. In 2019 Goodleaf opened South Africa’s first premium CBD store in the heart of Cape Town’s city centre. Two years on and they have three physical stores and a 30-strong premium product line, which includes oils, skincare topicals, sparkling flavoured water, natural vapes and powder sachets. The brand’s product range is available online and in major retailers across South Africa including Pick ‘n Pay, Spar, Checkers, Wellness Warehouse, Woolworths and Poetry.
From the start Goodleaf’s intention was to create a South African grown global cannabis brand. In less than 4 years Goodleaf Wellness has gone from a budding Startup to firmly establishing themselves as Africa’s leading vertically integrated cannabis operator, combining high quality, low-cost cultivation and production with a world class brand and distribution across South Africa, UK and Europe.
Europe is widely considered as the biggest market in the world for cannabis exports and Prohibition Partners estimate that the European cannabis market will be worth €403.4m (R7bn) by the end of 2021. They anticipate that this market will grow at a compound annual growth rate (CAGR) of 67.4% from 2021 to reach €3.2 billion by 2025. Further, the global CBD skincare market was set to surge to $959m by 2024 to represent 10% of the total global skincare market. This had also attracted us to Europe.
That said, the CBD industry is highly regulated with complex distribution networks and, while Goodleaf is excited about the international expansion opportunity, they will be adopting a very targeted approach to these new territories. Their products will soon be available in the United Kingdom through goodleaf.com, Amazon and select stores. They are delighted to have reached this momentous milestone in just four years.
So how did Goodleaf get to this point and what do South African entrepreneurs need to do next…
There is no doubt the opportunity is there. Demand for cannabis products, and other plant-based wellness and beauty alternatives, will continue to grow as consumers become increasingly aware of the potential benefits of these products for their health and wellbeing.
Goodleaf has strong ties to Canada which provided access to thought leadership and capital. The brand saw a big opportunity for South Africa given the country’s abundant sunshine and low cost production. But there are many countries in the world with sunshine and low production costs, so what else makes SA worthy of developing world-class cannabis brands?
South Africa has an incredibly rich heritage of medicinal plants, think rooibos, moringa, marula, baobab and Kalahari melon. The soothing, moisturising and anti-inflammatory capacities of these plants echo those properties in CBD – making the combination a particularly powerful, organic product for skin vitality, which creates a compelling selling proposition. All Goodleaf products, other than CBD oil, are infused with these African botanicals.
We have seen amazing strides from Lesotho and positive support from government. Lesotho has attracted significant international investment, which has seen the creation of world-class cultivation facilities that meet consumer demands for transparency and traceability. Last year Goodleaf merged with Highland’s Investments, formerly Canopy Growth Africa, which was part of the world’s largest cannabis company. Goodleaf has a state-of-the-art ISO 22000 certified cultivation facility, this means the brand is able to provide a truly seed-to-sale offering.
When the founders started Goodleaf they realised that they would need significant capital in order to execute the vision, which was to create a world class vertically integrated brand. Raising this capital allowed Goodleaf to hire great people. Cape Town is blessed to have some of the best creative talent globally.
As the cannabis industry enters this exciting new phase, it is crucial that the sector does not lose the opportunity to create value right here in South Africa. We must endeavour to not become another sector where Africa provides the raw product but the real value is created in Europe or North America. We have what it takes, let’s embrace it and not be afraid to act quickly, decisively and with the confidence that this is South Africa’s opportunity not to be missed.
Article credited to Goodleaf Wellness: http://www.goodleaf.com