Development of Lesotho’s medical cannabis industry has stagnated while neighboring countries’ that came after it have seemingly eclipsed it.
Lesotho Express spoke to the secretary general of the Phekoane (Medical Cannabis) Industry Association and Maluti Green Med’s chief communications officer, Refiloe Matekane on the industry developments.
LE: Please give us a brief background about the Phekoane Industry Association and what it aims to achieve?
RM: Phekoane Industry Association is an association of medicinal cannabis operators; cultivators, manufacturers, suppliers, and those that deal with testing cannabis products. In order for one to be a member, they need to have a valid license and proof that the company is operational in Lesotho.
The association is registered under the Societies Act and currently, there are 10 active members.
The main purpose of the association is to advance the medical cannabis industry in Lesotho by working together with the Ministry of Health as the Regulator to address the challenges within.
The Phekoane Industry Association has worked closely with the Ministry of Health in formulating the industry Regulations (Drugs of Abuse Regulations, 2019) which regulate the medical cannabis industry in Lesotho. The Association plays a critical advisory role to the Ministry on issues concerning the medical cannabis Industry in Lesotho.
In 2019, the association accompanied the then Minister of Health to a meeting in Vienna Austria with the International Narcotics Control Board (INCB).
The Phekoane Industry Association also firmly encourages its member operators to engage in significant corporate investment programs in the communities they operate in (scholarships, agricultural projects, health facilities, sports development, cannabis cultivation programs with off-takes by the big operators etc).
What is also of priority to the Phekoane Industry Association is also to help Basotho cultivators to become an integral part of the industry, by creating programs where the big multinational operators can work closely with the local Basotho Cultivators.
LE: Lesotho was the first African state to issue a production license for medical cannabis in 2017. What progress has the country made in developing the cannabis industry since then?
RM: Lesotho remains at the forefront of the cannabis industry in sub -Saharan Africa. Over M1 billion has been deployed by licensees and hundreds of jobs created with many temporary labor and ancillary opportunities also being created.
Several companies have attained Good Agricultural and Collection Practice (GACP) certification, and the first company recently achieved European Union Good Manufacturing Practices (EuGMP) status allowing Medical Cannabis to be exported into Europe.
The infrastructure, expertise and practices required for the production of medicine are intense and take time to be established.
Lesotho has attracted a number of multinational cannabis companies to set up and operate in Lesotho, and locally owned companies are now also starting to grow in numbers. The Lesotho Drugs Abuse Regulations of 2019 are also of good international standards and good in regulating the industry, though implementation of the Regulations has always been somehow lacking.
LE: How many companies have been licensed to grow Medical Cannabis to date?
RM: The actual official information is not available from the Ministry of Health but around 144 licenses have been issued so far, many given to Basotho locals with license fees waivered until a time when a licensee is operational and can pay the fees.
However most locals are not doing anything to start their operations because they are waiting for investors to sell the licenses to and it’s not going to happen, hoja ba qala ho lema (they better start planting).
Best is always to have a plan, start by securing an off-take so that one can produce with some of the big operators with extraction plants or for cannabis flower with international buyers. Learn the types of material the buyers need and grow based on that. Look for good strains in Lesotho and start growing them under nets or simple greenhouses or in the open.
Work with the old cannabis growers to produce quality product. If one starts to grow quality product, the big companies will take notice and will start to approach them with partnerships of sorts, and that means growth for such company.
There are a lot of unemployed horticulture graduates who can help the many licensees to grow quality product. Don’t just stand there doing nothing with a license in your hand, JUST DO IT!
LE: The government has previously expressed concerns on the lack of progress made by license holders and even threatened to revoke them. What is your take on this?
RM: The medicine (including cannabis) industry is highly regulated and requires sophisticated resources, and these take time to establish. It is not as simple as just planting seeds and selling the produce. A great deal of progress has been made by many of the licensees and we are confident that Lesotho and other African countries will emerge as leaders in the global medical cannabis industry in the years to come.
LE: How many licensed companies are actually growing Medical Cannabis?
RM: We estimate there could be ten such companies.
LE: What are the major challenges license holders are facing in the industry?
RM: The production of cannabis for medicine is capital intensive and this is a major barrier to entry. Not having a domestic market is another factor as products need to adhere to international specifications in order to be allowed into these markets.
Implementation of the Drugs of Abuse Regulations of 2019 by the Ministry of Health has been a great problem as a secretariat that is supposed to regulate the industry has not been set up yet. But the new Minister of Health together with the chairman of the now active Lesotho Narcotic Bureau (Mr Bahlakoana Shelile) are working non-stop to make sure the Secretariat is up and running and the industry well regulated.
The Phekoane Industry Association is working hand in hand with the Ministry of Health and the Narcotics Bureau to ensure the industry is well regulated.
The government also has to actively encourage the formal industry to embrace the indigenous Basotho growers who have been growing and dealing in cannabis for many years, provide them with licenses and find new markets for them to sell their now legal production. There were talks that the German government through some of its cannabis companies desired to sign a huge off-take with Lesotho and buy from local growers who would provide quality product.
The government must facilitate such large off-takes for local growers and develop formal programs to teach them about the standards required for medical cannabis which are different from growing cannabis for recreational use.
LE: You indicated that lack of capital investment is one of the major constraints in the industry. What is being done to address this?
RM: This is certainly a challenge for current licensees as well as those aiming at entering. Cultivating and manufacturing medical grade cannabis, active pharmaceutical ingredients (API) and medicines is a capital intense business. Companies require insights, expertise, and robust business and financial plans in order to raise the capital required.
But also I feel government together with the Phekoane Industry Association must find ways of incorporating Basotho growers into the mainstream economy and industry. I believe there are ways the big operators and the local growers can work together for the benefit of all and for job creation. We shall not stop until we find a way for local growers to benefit from this great lucrative industry.
LE: High entry requirements for the industry have kept locals out the business currently enjoyed by foreign investors. What needs to be done to level the playing field to increase local participation?
RM: Many Basotho business people are in fact shareholders in the current licenses. Many have also devoted their own capital and resources into their operations with their sights set on the long term benefits associated with the industry. Maluti Green Med (MGM) is one such example and is currently owned by majority of Basotho.
The cannabis market is diverse and many opportunities have lower barriers to entry than the production of APIs and medicine. For example, hemp cultivation and processing opens a plethora of opportunities from Hemp derived cannabinoid to the various industrial applications associate with Hemp.
MGM is in the process of engaging government to extend opportunities to communities via satellite cultivation programs. Cannabis is still considered an illicit drug with the potential for abuse and is regulated on a local and international level. What is important is to focus on the less threatening and regulated elements of the industry (such as hemp) to increase participation.
It is also conceivable that co-operation structures can be established where cultivation of cannabis can be extended to the average farmer; the biomass can then go through quality control and extraction for various industrial, cosmetic and therapeutic products.
LE: There have been concerns that the current laws regulating the industry are not enough to fast-track development of the industry. What is your comment on this?
RM: Lesotho’s legal infrastructure (with emphasis on medicine) is to a great extent in line with other progressive countries’ around the world. Access programs for local patients are required to extend the medical benefits of the industry to the greater population, and based on current draft amendments to Drugs of Abuse Act, this may not be very far off.
LE: With the medical cannabis production strictly meant for export purposes, what challenges does this provision pose?
RM: Domestic markets are important for many reasons. The chief concern should be that patients and consumers who could greatly benefit from cannabis medicines and products are not able to access these. Cannabis has been used as a herbal medicine around the world for thousands of years and has been known for its benefits in western medicines for decades now.
Registered drugs such as Dronabinol (Marinol) have been used in the west to treat the symptoms of HIV/AIDS since the 90’s and in the past three decades, cannabis has demonstrated the ability to treat many indications ranging from pain, sleep and appetite disorders to having serious impact on more life-threatening illnesses like Cancer, Lupus and HIV/AIDS.
The research is ever expanding but there is no doubt, both the licensees and average Mosotho will benefit tremendously once laws are passed that provide access to patients.
LE: Your organization, Maluti Green Med recently completed its fourth season of cultivating cannabis under license. Please tell us about its operations.
RM: Maluti Green Med (Pty) Limited was founded in 2017 and has set up its operations in Butha Buthe/Leribe Lesotho. Our company produces biomass for extraction purposes as well as various extracts which have been sold into South Africa and international markets. The company is 51 percent Basotho owned and has now completed its fouth season of cultivating cannabis under license. The company is professionally valued at a few hundreds of millions of Maluti currently, and we are currently building a new (EuGMP) certified facilities which will cost us around M50 million. The facilities will be completed by end of the year and will give opportunity for MGM to supply products into the European Market.
We are currently exporting to South Africa, Australia and Hong Kong. MGM is one of the key suppliers of CBD into South Africa. We work closely with Ntate Sam Matekane’s Verve Dynamics to supply different products into these markets.
With a very strong experienced team led by CEO and Plant Genetics Engineer Dr. Murunwa Makwarela PhD, Maluti Green Med is poised to become one of Lesotho’s success stories in the Medical cannabis industry.
LE: Your company also produces local strains of cannabis. What are the prospects of exporting local strains as opposed to the imported strains?
RM: The cannabis space is evolving at a rapid pace and with that, comes increased prospects for Lesotho’s Landrace Cannabis Genetics. Cannabis breeders from around the world have integrated African Cannabis genetics into their breeding programs since about the 90’s. Some of the most popular cannabis genetics used for recreational as well as medical purposes have African lineage, for example Durban Poison is world renowned for its tetrahydrocannabivarin (THCV) content and mood enhancing properties.
Unfortunately the genetics that were uninterrupted for hundreds (if not thousands) of years are under threat. Black market growers have brought in ‘strains’ that yield more weight or a higher chemical profile and these strains, being cultivated in an unregulated manner, have began to dilute the local gene pool. We have seen this in our own observations of local genetics.
Lesotho genetics do not have particularly high concentrations of THC or CBD which are currently the 2 Phyto Cannabinoids in greatest demand by the medicines industry, however the cannabis industry is evolving at a rapid pace and there are hundreds of other Cannabinoids, Terpenes, flavonoids and other chemicals that are present in cannabis that are gaining traction in the scientific community and will be of commercial value in the near future.
At Maluti, we believe that there will be a demand for appellation products (appellation of origin), this means that the Lesotho genetics need to be researched and protected.
