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BusinessEthiopia’s cannabis potential valued at USD 10 billion

Ethiopia’s cannabis potential valued at USD 10 billion

Hemp fabric could revolutionize Ethiopia’s textile

The African Regional Hemp & Cannabis Report, 2019 industry outlook, a study by New Frontier Data, a Washington based research institute, indicated that cannabis, which is a genus of flowering plants in the family of Cannabaceae, recognized for its use in medical or recreational purposes, potential in Ethiopia has a market potential of USD 9.8 billion, standing second in the continent only following Nigeria’s USD 15.3 billion industry.

The study that valued the global legal and illicit cannabis market at USD 344.4 billion, showed that Africa’s share from this global market stands at 11 percent valued at USD 37.7 billion. The study also showed that there are estimated 263 million cannabis consumers globally among which a third or 83 million are located in Africa. Ethiopia’s share stands at 7.1 million consumers, standing second to Nigeria’s 20.1 million consumers.

The “report covers 13 African nations which alone encompasses more than 565.4 million people, and of which, nearly 42.8 million are estimated to use cannabis at least annually. As this report further details, based on the study of consumption rates and volume, we estimate Africa’s overall market to account for 11 percent of the total global cannabis market,” the report indicated.

While, according to the report, global cannabis consumption rate stands at 6 percent, Africa’s consumption rate is at 11.4 percent, almost double than the global rate.

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The report further claims that, “The continent’s growth presents opportunities for both medical cannabis and industrial hemp (a strain of the Cannabis sativa plant species that is grown specifically for industrial use). Hemp is a source of fiber and oilseed being grown in more than 30 nations today. 

Due to the confusion between industrial hemp and cannabis marijuana, which is based on the visual similarities of widely differentiated varieties of the cannabis plants, the use and circulation of the Hemps as well has been limited across the world. By definition, industrial hemp is high in fiber and low in active tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana that makes some cannabis varieties a valued drug.

The plant and the industries surrounding it can support several of the UN’s Sustainable Development Goals (SDGs), including those that are of highest priorities for African citizens, and some of the low-tech, low-cost, accessible applications of industrial hemp can be quickly activated to support the health and growth of Africa in the coming decades.”

While the market estimate stands at USD 9.8 billion, current estimated cannabis consumer spending market value in Ethiopia is USD 9.8 million, the study indicates.

In addition, it further indicates that cannabis could help Ethiopia achieve its targets especially in the textile sector if it gives attention to industrial hemp than cotton plantation.

“The textile and garment industries are rapidly growing sectors in Ethiopia’s economy, but a common bottleneck in the supply chain has been its cotton supply, as Ethiopia currently does not cultivate enough cotton to supply its textile manufacturers, necessitating cotton importation. The government has launched the National Cotton Development Strategy with the aim of becoming Africa’s top cotton producer by the 2030s in order to supply the garment and textile industries. However, cotton cultivation requires a considerable amount of water, and the variability in Ethiopia’s seasonal and annual rainfall could affect yields,” the Report details.

“Locally sourced hemp fabrics may be a viable supplement to Ethiopia’s cotton textile and garment industries. Hemp cultivation requires about a quarter of the amount of water than that of producing cotton, and hemp can be planted much more densely, resulting in higher yields,” the report points out.

While it is not legal either to plant or consume cannabis in Ethiopia, for any purposes, the study indicates that it is freely planted in many parts of the country, “notably in the Shashamane area, which was settled by Rastafari immigrants during the reign of King Haile Selassie I.”

There has never been a single cannabis investment in Ethiopia and efforts to establish one in the Amhara regional state resulted in a public outcry and cancellation of the plan by an Ethiopian and Canadian JV Africana Cannabis Holdings.

The Minister of Health Amir Aman (MD) then twitted that, “The Ministry of Health’s position regarding the growing of cannabis for Medicinal purposes in Ethiopia has neither been recognized nor sought after. And no regulatory approval was given. Requests for such investments have been and will continue to be denied.”

The investment commissioner, Abebe Abebayehu, also reiterated that the government will not issue an investment license for cannabis in Ethiopia.

According to a study by the World Health Organization where an Ethiopian sits at the helm, found out that, “recent evidence from animal and human studies shows that its use could have some therapeutic value for seizures due to epilepsy and related conditions such as Dravet syndrome.”

But, whether for medical or other uses, Ethiopia is shunning away any requests of investment in the sector together with its USD 10 billion revenue potential.

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