The big turnaround for South African entrepreneurs came when the Department of Health issued an update to the regulations around cannabis in May 2019, which essentially removed some stringent restrictions on certain components of this versatile plant.
The cannabis plant comprises two main compounds – Tetrahydrocannabinol (THC) and Cannabidiol (CBD). THC is considered to be the psychoactive component of cannabis (this is the stuff that makes you high), whereas CBD is not associated with psychoactive outcomes. The removal of the restrictions saw CDB being removed from a schedule 7 drug to a schedule 4 medicine in accordance with the Medicinal Act.
In recent years, evidence has emerged that cannabis may have some medicinal benefits for conditions where other medicines have failed. Sections 21 and 22A (9) (a)(i) of the Medicines Act state that medical practitioners can apply for permission to access and prescribe unregistered medicines, when intended to treat their patients. Cannabis products intended for medicinal purposes may be made available, in exceptional circumstances, to specific patients under medical supervision.
Since then, a range of profitable business opportunities has opened up for those daring enough to tap into this niche market. Is the cannabis industry really a profitable business, or a passing fad? If the recent Coffee and Chocolate Expo held at the TicketPro Dome in July 2019 is to go by, the cannabis business is growing at a rapid rate in South Africa. From CBD infused sweets, cupcakes and very delicious tea, to facial products and anti-anxiety treatments, cannabis seems to be gaining momentum and a more organic solution to chronic ailments and this was in full display at the expo, where most retailers have incorporated some element of CBD oil into their products.
One person who has taken full advantage of this growing market and reaping the rewards thereof is Jason Mfusi, owner of The Tosh Coffee Shop franchise, situated in the heart of Klerksdorp central business district. The charming hideout, aptly named after the late reggae singer Peter Tosh, follows a business model that is unique to the South African business landscape.
With The Tosh, Mfusi aims to not only create a safe space for those who have been prescribed cannabis for their ailments by their medical practitioners, but he also provides coffee and confectionaries infused with CBD oil with the promise of promoting good health and non-invasive treatment of chronic conditions. The big difference between a normal dispensary and what Mfusi has done with his coffee shop business, is in the experience offered.
The Tosh aims to promote holistic living and he has incorporated talks and social events into the model with the sole purpose of raising awareness and educating people on the benefits of cannabis when used in accordance with the Medicinal Act.
“Many people have fallen victim to low grades of cannabis use over the years due to there not being proper standard measuring tools available to test or verify the quality of products, be it recreationally or self-made home medicinal uses. We were convinced that quality is key in providing any kind of service or product in relation to cannabis as there were no previous benchmarks set in our country or continent,” he said.
According to Mfusi, The Tosh measures its financial success in terms of increased market share and operational viability of the current business model. With an overall local market outlook of 81 billion rands this could be a market opportunity worth exploring.