It’s staggering to think that forecasters have predicted that by 2025 the global cannabis industry is expected to reach $146 billion, with the total market value of the South African cannabis industry raking in about $1.8 billion. These are the numbers being lobbied around and South Africa’s forward-thinking stance towards the 5-pointed leaf sets it up nicely to become a major player in the international market.

Since its legalisation at the end of 2018, the cannabis industry has proven to be an emerging market, giving South Africa the opportunity to run with the big dogs in this exciting new growth sector. Tito Mboweni even went so far as to say that policy changes in the industry can very well result in a potential source of revenue for SA in his Budget Speech.

With Statistics SA recently revealing that unemployment is not on the decline, it certainly is an opportune time to unlock the economic benefits, as well as the resulting job creation opportunities, that this industry presents. According to the New Frontier Data report the annual cannabis consumption rate in Africa is 11.4% while the global average is only 6% which bodes well for one of their Sustainable Development Goals which is to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”. The cannabis industry has the potential to create work opportunities for both low-skilled and high-skilled workers, it said, due to the fact that cannabis businesses will require management staff, administrative staff, manufacturing staff, agricultural operations and retail operations. In the United States, 321 744 jobs were created in the cannabis industry; and 35% were in retail operations.

So, with all the above in mind, the question at the forefront of every investors mind is whether or not to invest in the South African cannabis industry?

The collective word on the street is yes. If you’re looking to invest on the ground floor of one of the potentially largest markets globally, now’s the perfect time. Many companies are jumping on the cannabis bandwagon, one of which is CanbiGold, a South African holding company that has invested into several companies across the cannabis value chain and is offering early stage investors preferential share blocks at R500 000 per block. These are convertible at a 3 to 1 ratio once CanbiGold is listed. In Canada the listed cannabis sector has a market capitalisation of more than R500 billion. CanbiGold hopes to list on the Canadian Stock Exchange in the next 18 months to two years and possible a secondary listing on the ZAR X, a South African stock exchange. This is only one example of the investment opportunities that are budding across the sector.

Be wary of getting caught high and dry

As exciting as this whole new world of cannabis investment is, it’s important to not get caught up in the hype and invest without thinking. Right now, the buyers of cannabis shares are mesmerised by the potentially bright future that the landscape presents. Up until now, there hasn’t been any public cannabis related listing on the Johannesburg Stock Exchange (JSE), yet. But that is set to change any day now. One of the biggest companies on the JSE by market capitalisation, Anheuser Busch is invested in the marijuana industry, and just like alcohol, the odds are that cannabis will sell, sending shares skyrocketing. But we do believe in the old adage of what goes up must come down, so maybe it might be pertinent to keep an eye on the market and see what happens as the legislation around the product changes. After all, you wouldn’t want to see your investment going up in smoke, would you? 

OPINION PIECE FROM CM TRADINGCONTRIBUTOR: DANIEL KIBEL, FOUNDER AND DIRECTOR CM TRADING

Sources

• http://www.capetalk.co.za/articles/338910/how-dagga-could-become-a-cash-cow-for-south-africa-s-economy
• https://www.dailymaverick.co.za/article/2019-05-24-cannabis-can-create-jobs-and-grow-the-economy-new-report-argues/
• https://www.bizcommunity.com/Article/196/547/192479.html
• https://www.thesouthafrican.com/news/cannabis-industry-welcomed-with-open-arms-by-city-of-cape-town/
• https://businesstech.co.za/news/business/323689/south-africa-is-on-the-cusp-of-its-own-booming-and-legal-cannabis-industry/
• https://www.businessinsider.co.za/prohibition-partners-report-on-cannabis-in-africa-raises-irrigation-and-hydroponics-concerns-2019-3
• https://www.iol.co.za/business-report/economy/a-considered-approach-to-cannabis-investment-26708473

Telling your mom you’re going to the CBD has an sinister new meaning from today (Friday 24 May 2019) after the latest victory in Dagga Wars... Cannabidiol (CBD), a compound extracted from cannabis that is found in everyday items such as skin creams, body oils and even beer, is suddenly the new buzzword in South Africa after the legal status of CBD got the green light on Friday.

The long and the short of it is that certain “medicinal” dagga products – Cannabidiol, or CBD, or dagga oil, to be exact – may now be sold without prescription. CBD is accepted as not being psychoactive. The oils containing this element are also NOT habit-forming and CBD does not pose any dangerous side-effect as long as the daily dose does not exceed 20 milligrams.

Also, the minister of health, Aaron Motsoaledi, announced that marketers are not allowed to claim their products Can cure or treat any medical condition. However, it is widely accepted that cannabidiol has an extremely positive affect on people suffering from anxiety and sleeplessness to chronic pain from arthritis. Apparently, it even helps with seizures.

CBD is immediately available from Vondel Premium (PTY) Ltd., an online concern based in Gauteng (see www.vondel.co.za). Vondel.co.za hosts an array of resources – from an intricate look into the medicinal benefits of CBD to the curing process of cannabis. “CBD products are notoriously expensive across the globe,” says co-founder Rian Kotze. “Vondel aims to limit margins in order to maintain pricing that is fair and more easily accessible to the general public. This is beneficial not only to the general public but might also seem appealing to interested investors looking to pair up with an early stage market disruptor.”

Products can be ordered online at www.vondel.co.za (payments are processed by PayPal) and delivery will take between 4 – 6 working days. This will soon reduce to 2-day deliveries as Vondel plans its own logistics solutions. According to co-founder and LGBT activist Jeandre Verster, Vondel is currently preparing for Series-A funding from potential Angel Investors. The company hopes to launch its first retail location by the end of the year, as well as develop their own range of CBD and related Cannabis Pharmaceuticals in preparation for full legalization coming 2020.

Interested investors can make contact via This email address is being protected from spambots. You need JavaScript enabled to view it. Vondel also boasts a rather impressive Charity Policy, dedicating a staggering 20% of nett profit to Parkinson’s and Elder Relief organizations. ENDS Issued by www.vondel.co.za. Visit the website for more information.

AfricArena, Silicon Cape and Wesgro host expert discussion and release research indicating funding raised by African startups to increase by 100%+, exceeding $1 billion for the first time.

Tuesday, 30 October, Cape Town – In the wake of the SA Investment Conference that took place last week, AfricArena, Wesgro and Silicon Cape hosted a press conference at the InvestSA One Stop Shop in Cape Town, making public new partnerships for the conference and discussing the role conferences and accelerators like AfricArena play in attracting investment to the continent.

Partech Ventures’ latest annual funding report shows that venture capital funding in 2017 reached $560 million, recording 53% year on year growth. South Africa, Kenya and Nigeria dominate with 6% of total funding. Francophone Africa is accelerating with 14% of the deal transactions and financial inclusion (off-grid tech, fintech and insuretech) representing 45% of deals.

The track record shows the trend is that African tech entrepreneurs are raising more and more funding. Yet, the amount of investment going to African tech startups represents less than $50c per capita whilst in Europe the investment is $50 per capita in the USA $150. Currently, less than 1% of global tech investment is into Africa whereas on the global scene, in 2017 the USA attracted $74 billion, Asia $71 billion and Europe nearly $18 billion.

“If we are to create the next generation of successful entrepreneurs competing at a global scale – clearly the challenge remains as an input and output measure to increase the level of capita that African startups attract,” states Christophe Viarnaud, CEO of AfricArena and Methys. ““It is predicted that in 2050 and 2100, there will be more than 50 cities with more than one million people on the African continent, and the majority of the most highly populated cities in the world will be in Africa. This is a very important factor in terms of being a fundamental underlying trend which is going to drive increasing investment in Africa, therefore we foresee the investment in African tech startups to exceed the $10 billion annual mark in the next decade.”

Based on internal research conducted in 2018, AfricArena, Silicon Cape and Wesgro expect the funding raised by African startups to increase by 100%+, exceeding $1 billion for the first time and achieve $1 dollar per capita, positioning Africa as the fastest growing area in the world.

“Another interesting thing is the emphasis we put on taking our startups to the bigger stages outside of the continent,” adds Danai Musandu, Investment Associate, Goodwell Investments BV, “You always find more people rushing to go to Silicon Valley to go see where the big stage and the content is. But we need to have a change of perspective and a change of attitude, where people will say ‘We’re going to Africa, where the big stage of the future is’. The biggest barrier is our perspective and we need to change that perspective.”

AfricArena is a pan-African ecosystem accelerator whose mission is to help African startups access market and capital. The primary outcome measure is investment deals done around the event.

AfricArena 2018 Announcements

Over 70 start ups from over 30 countries will attend, competing in 11 open innovation challenges

In partnership with We Think Code, AfricArena will run a hackathon on a mobility challenge for the City of Cape Town

EM Lyon, a world-ranked business school, joins as academic partner and will stream AfricArena live on its Casablanca, Lyon and Singapore campuses

Over 100 investors from US, Europe, Africa will attend or follow on the live streaming of the pitch sessionsAfricArena announced partnership with Deep Tech platform ‘Hello Tomorrow’ and a Deep Tech Africa challenge that will take place on Day 2 of AfricArena.

Silicon Cape members to receive early bird special of 50% off AfricArena tickets 

EM Lyon is an international business school priding themselves in “making entrepreneurs for Africa”. They capitalize on the worldwide-recognized experience and quality of their programs and offer both students and corporations content that is tailored to their context and to their problems. EM Lyon is fully in line with their signature "early maker": a school that tries, investigates and innovates far ahead of others.

Hello Tomorrow organises mentorship programs and a series of events around the world, as well as educating and consulting relevant stakeholders on emergence of deep technologies with the platform fast becoming a key reference in deeptech innovation and entrepreneurship.

Sarah Pedroza, Managing Director of Hello Tomorrow, states: “Deeptech innovation happening today knows no borders. But the opportunities and resources to catalyze these solutions are unevenly distributed. We need to give better tools to deeptech entrepreneurs in ecosystems that are booming, connecting them to a global network of industry leaders, investors and policy makers in order to bring their concepts to market. We’re excited to partner with AfricArena, joining their flagship event in one of the biggest tech hubs in Africa, which is a great opportunity to bring key stakeholders together.”

Finalists for the internationally sponsored challenges were also announced:

VINCE ENERGIES CHALLENGE – How to make energy more accessible in Africa thanks to energy efficiency solutions, energy flows optimization blockchain and/or AI - Rensource (Nigeria), BIG POT – Nigeria, Oniriq – Senegal

SAINT-GOBAIN CHALLENGE – A solution to upgrade professionals’ skills across Africa - Syafunda (South Africa), The Student Hub (South Africa), Ceed Learning (South Africa)

VIVATECH CHALLENGE – How AI can help generate a self-sustaining growth in the AgriTech industry - Agrocenta (Kenya), Homefarm (South Africa), Aerobotics (South Africa)AfricArena will take place on 15 & 16 November.

More information available at www.africarena2018.com

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For more information on AfricArena or this press release, please contact:

Mika Stanvliet | This email address is being protected from spambots. You need JavaScript enabled to view it. | 081 534 6237 

About AfricArena:

Celebrated as the largest tech ecosystem accelerator on the African continent, last year’s edition of AfricArena saw more than 80 startups presenting to over 100 investors with 25 countries being represented and over $2M worth of deals done. The conference serves as a platform for the continent’s best startups and innovators to showcase their world-class talent in front of an audience of both local and international investors. AfricArena is the ultimate deal-flow platform, bringing investors and startups together in one central location.

The challenges run by AfricArena are sponsored by Vinci Energies, AirFrance, Engie, Sanofi, Leroy Merlin, the City of Cape Town and RCS.

The conference is anchored and endorsed by corporate sponsors and partners La French Tech, Silicon Cape, Wesgro, SEDA, and will be covered by several media such as Techcrunch, Les Echos, Maddyness, Fast Company and many others.