Experts say South Africa’s hemp industry needs policy clarity, markets, and capital

South Africa’s fledgling hemp sector continues to grapple with foundational challenges nearly three years after the government issued the first commercial cultivation permits, according to experts speaking at a recent industry webinar. Despite growing optimism, the industry remains far from establishing a viable value chain.

In a recent webinar hosted by the Mpumalanga Green Cluster Agency, a sustainability and innovation initiative that promotes green economic development in South Africa’s Mpumalanga province, project representative Jan Alberts acknowledged that high input costs, limited infrastructure, and poor seed adaptability continue to hinder hemp production.

Slow progress

“Although the industry has had a slow start, we’re beginning to better understand what is required for growth,” Alberts said.

Siphe Zantsi, agricultural economist at the Agricultural Research Council (ARC), said that while South Africa has more than 1,000 licensed hemp producers, fewer than 30% are active, attributing the low participation rate to the limited availability of certified seed, a cumbersome cultivar registration process, and a lack of access to credit.

“Financial institutions still see hemp as a risky crop that has yet to prove its commercial potential,” he said.

Policy, market gaps

Industry figures argue that progress will remain slow until policymakers provide clear, consistent support. Phivo Artemides, sustainability specialist at Hempo Sapiens, said that South Africa could learn from Europe, where hemp is eligible for subsidies under the EU’s Common Agricultural Policy. “Policies of this kind help farmers maintain stability and encourage long-term investment,” he said.

The lack of downstream buyers and transparent contracting has further discouraged growers, according to Zantsi. “We need reliable markets with clear agreements between producers and processors,” he said, noting that even successful trials have struggled to transition into full-scale operations.

Regulatory turbulence

Recent regulatory uncertainty has added to the sector’s instability. Earlier this year, South African hemp stakeholders faced confusion over a government directive that effectively banned hemp-derived food and CBD products. The Department of Health reversed the measure in March 2025 after industry backlash, pledging broader consultation on future rules. Still, the episode underscored how fragile investor confidence remains.

Despite these obstacles, collaboration between researchers and local growers continues. The ARC and universities are testing cultivars suited to South African conditions and experimenting with sustainable irrigation methods. One notable project, led by Sboniso Magwaza, a PhD candidate at the University of Pretoria, explores the use of mine-impacted water for hemp irrigation in Mpumalanga—an approach that could expand cultivation while addressing environmental challenges.

‘Natural advantages’

Provincial governments are also beginning to position hemp within trade and export strategies. In June, officials in KwaZulu-Natal announced plans to explore BRICS-linked export channels, including potential trade with China.

Stakeholders agree that South Africa’s hemp industry is entering a critical phase. Without stronger policy alignment, infrastructure investment, and secure offtake agreements, most hemp producers may continue to operate below potential. Still, advocates like Artemides remain cautiously optimistic: “If we can stabilize the market and learn from international examples, South Africa has all the natural advantages to succeed.”