What production of medical cannabis means for the Rwandan economy

Some know it as cannabis, while others know it as marijuana or weed, especially because it has been trendy in pop-culture music and because it has been immortalized in western films.

Whatever you call it, cannabis is the world’s most popular drug and is the highest value therapeutic crop known at the moment, despite being illegal in many parts of the world.

It wasn’t until Monday, October 12, that a cabinet meeting approved guidelines that allow the growing of cannabis in Rwanda, which drew mixed opinions from people.

Cannabis is a multi-billion dollar industry and it’s believed to be the world’s most valuable cash crop from the absolute value perspective.

One study, which analysed data from the UN Food and Agriculture Organisation as well as UN World Drug reports, estimated cannabis to be valued at $47.7 million per square kilometer.

Rwanda could be a new entrant into an industry that is already lucrative.

“The cabinet approved regulatory guidelines on cultivating, processing and export of therapeutic crops,” minutes from the cabinet meeting held on Monday reads in part.

According to the Minister of Health Dr. Daniel Ngamije, the country will now allow the growing of cannabis, but it will be exclusively for export.

“This will not give room for those who abuse it. The law that punishes drug abuse is in place and it will continue to be applied as usual,” he told the national broadcaster.

This was reinforced by Rwanda Development Board which said in a statement that they have already approved guidelines providing framework for investing in the production and processing of medical cannabis for export

According to the statement, RDB will introduce a special export levy to incentive cannabis value addition.

"Medical cannabis produced in Rwanda will be solely for export markets," reads the statement.

According to the World Health Organisation, cannabis is by far the most widely cultivated, trafficked and abused illicit drug. Half of all drug seizures worldwide are cannabis seizures.

The geographical spread of those seizures is also global, covering practically every country of the world.

About 147 million people, 2.5 per cent of the world population, consume cannabis compared with 0.2 per cent consuming cocaine and 0.2 per cent consuming opiates.

Why is Rwanda legalizing it?

Rwanda hopes to reap big from the economic opportunities of growing Cannabis for medical purposes, it says.

Although it is widely abused, it has several medical applications and evidence shows that it can be used to make several drugs such as Sativex, which comes as a nasal or oral spray, and has been approved in many countries for treating spasticity.

Cannabis is also used to make Dronabinol, another drug used to treat nausea and vomiting caused by chemotherapy in people who have already taken other medications to treat this type of nausea and vomiting without good results.

Dronabinol is also used to treat loss of appetite and weight loss in people who have acquired immunodeficiency syndrome (AIDS), according to existing scientific literature.

According to a study conducted by Grand View Research, the medical segment held the leading revenue share of 71.0 per cent in 2019, owing to the growing adoption of cannabis as a pharmaceutical product for treating severe medical conditions, such as cancer, arthritis, and Parkinson’s disease and Alzheimer.

Moreover, increasing need for pain management therapies along with the growing disease burden of chronic pain among elders is expected to boost the product demand.

The government also sees the cannabis industry as a strategic sector that will generate jobs and create business for communities through cultivation, production and processing zones.

Aloysie Manishimwe, a Rwandan researcher in medicinal plants, doesn’t necessarily believe Rwanda’s decision to open up the cannabis industry is a bad move.

“I don’t think it’s a bad move since it comes to serve healthcare needs. Already there are many countries that have used cannabis for medicinal purposes,” she told The New Times.

However, she insists the government has set itself a big task especially when it comes to having strong regulations in place to make sure that they protect people against abuse.

“Already drug abuse, specifically cannabis is rampant among young people in Rwanda. The task will be upon the government to have strong law enforcement,” she noted.

Manishimwe argues that it is equally important for the government to have strong oversight over investors who will be awarded tenders so they don’t disguise themselves behind relaxed rules to promote the already complex drug industry.

Rwanda Development Board highlighted that guidelines approved provide for “strict security measures designed to prevent illicit diversion or use of the product,” among other requirements.

Beyond Rwanda

A Netflix documentary, The Business of Drugs, which was released this year shed light on the lucrative industry, highlighting California as the largest producer of cannabis in the world estimated at 14 million pounds.

It is followed by Guyana at 2 million pounds, Sweden at 0.4 million pounds, and Thailand at 0.015 million pounds, according to Richard Ormond, a top cannabis law expert in the United States.

Cannabis is allowed for medical and recreational use in many parts of the United States although it is illegal at the federal level. It is also legal in the Netherlands, Uruguay, Canada, Peru, Spain, Israel, and Afghanistan, among others.

Africa has not been left.

More than 10,000 tons of cannabis are produced on the continent each year, according to a UN survey, which advocates believe could be worth billions of dollars in a rapidly expanding global market for legal weed.

This year, Malawi became the latest African country to legalise the growing, selling and exporting of cannabis.

In Zambia, Lesotho, South Africa, Zimbabwe, Morocco, Swaziland, and Ghana, cannabis use is allowed for use in one way or another.

The global legal marijuana market size is expected to reach $73.6 billion by 2027, according to Grand View Research.

It is anticipated to expand at a compound annual growth rate of 18.1 per cent during the forecast period.

Increasing legalization of cannabis for medical as well as adult-use is expected to promote growth, according to the report