Zimbabwe’s earnings from cannabis exports could outstrip those of tobacco by almost three times, according to local officials, reports Bloomberg.
Last year, the southern African nation legalized cultivation of cannabis for medicinal use. Since announcing rules for growing cannabis in September, the government has issued 44 licenses. Zimbabwe neighbor Malawi decriminalized cannabis earlier this year.
Treasury spokesman Clive Mphambela expects sales to reach $1.25 billion in 2021. By comparison, Zimbabwe earned $444 million from the 2020 marketing season that closed in August, according to the Tobacco Industry and Marketing Board.
John Robertson, an independent economist based in Harare, said the projections were ambitious. “It’s a massive overestimate and ignores that cannabis is grown in many markets outside of Zimbabwe,” he told Bloomberg.
“It’s sold in grams, not in kilograms or tons, so there will be disappointment,” Robertson said. “The only enthusiasm will be from producers, but massive supply globally will depress prices.”
South Africa, Malawi, Zambia and Lesotho have also legalized medicinal cannabis.
In his budget statement on Nov. 26, Finance Minister Mthuli Ncube said cannabis production for medicinal purposes has “immense potential” to generate export receipts and tax revenues. A so-called cannabis levy will be introduced next year, in line with export values, Ncube said. Taxes of as much as 20 percent will be applied on oils, bulk extracts and dried cannabis flowers.
Growers, most of whom are locals with international partners, can produce $40 million to $46 million worth of cannabis a month, underpinning Treasury’s “very conservative” estimates, Mphambela said.