3 out of 89 start cannabis production
The Cannabis Regulatory Authority (CRA) says despite licensing about 89 firms to venture into medicinal cannabis and industrial hemp production, only three firms have started cultivating the crop.
The three firms are Invegrow Limited, CPG Investment and the Mchinji Cannabis Cooperative.
CRA registrar Ketulo Salipira said the development has come about due to delayed preparation by firms to set up irrigation facilities while others, especially cooperatives, are waiting for the rainy season to begin cultivation.
He said: “The licences have one year lifespan subject to renewal and we expect that within the period, the licensees will have produced the crop as planned.
“The industry is a complicated one and new in this country, we are just setting it up. However, we expect those who have already started producing like Invegrow, they will start exporting between January and February next year when the economy will start benefiting from the industry.”
CRA licensed 48 firms for medicinal cannabis and 35 firms for industrial hemp production while six were licensed for research purposes on the crop varieties.
Farmers Union of Malawi (FUM) chief executive officer Jacob Nyirongo said cannabis has emerged as an alternative crop to tobacco, but said there is need for government commitment to ensure that the value chain takes an inclusive process.
Nyirongo said: “It’s a new crop and there are challenges. The conditions that farmers are supposed to meet in order to grow the crop are quite difficult to meet.
“It requires public investment in terms of extension services, training, advisory services and financing, without this, we will see farmers being excluded.”
Licence fees to cultivate and sell as well as the licence to process is pegged at $10 000 (about K7.4 million) for medicinal cannabis and licence fees to cultivate and sell industrial hemp is at $2 000 (about K1.4 million).
On the other hand, a licence to process industrial hemp is pegged at $5 000 (about K3.7 million).
Other requirements include that farmers should present a business plan to the CRA and should have readily identified markets upon application for production.
In his reaction, National Working Group on Trade Policy chairperson Frederick Changaya, who is also managing director of Applecore Grain & Milling Limited, said government should support production of industrial and medicinal cannabis and ensure farmers are diversifying use of land, saying its value diminishes over time leading to diminishing returns.
Earlier, Minister of Agriculture Lobin Lowe said concerns over limited capacity in cannabis businesses by farmers, extension services, weak contract farming arrangements, existence of cannabis markets and seemingly high licence fees will be tackled.
Invegrow director Nebert Nyirenda said the they have started hemp cultivation under greenhouses to produce flowers for extracts or premium grade flowers for export.
He said their greenhouses occupy nearly 10 000 square meter of space and the factory factory space of nearly 1 200 square meters which is already completed and connected to 3 phase power and that processing equipment is being procured.
