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Green gold: cannabis has the potential to be a moneyspinner for Zimbabwe However, he believes that many significant


improvements to Zimbabwe’s investment cli- mate over the past fewyears—such as the with- drawal of the indigenous ownership require- ments, the compensation to white farmers for redistributed land and many other initiatives — have not drawn more positive investment attention to the country.


Broader reformsneeded Mr Emery says that if Zimbabwe believes it can offer incentives to business without massive political, social and economic reforms, it will get what it pays for: a bunch of unscrupulous investors tied to the ruling party, Zanu-PF, and allowed to do what they want regarding stand- ards, certifications and progress. Mr Rhodes adds that with a good climate,


highly skilled but inexpensive agricultural labour, and rich soils, Zimbabwe is positioned to be a bottom-quartile cost producer of a com- pliant product. But the demand for medicinal cannabis in the markets that Zimbabwe can supply is unfortunately still quite small, as there are many countries competing for access to thesemarkets. Despite the boundless enthusiasm that


accompanied medicinal cannabis globally in 2017/2018, and projections of significant reforms and demand growth, legalisation has been slower than expected. Instead, there has been strict regulation and little growth in many countries that have legalised its use. Mr Rhodes says the biggest challenge to


August/September 2021 www.fDiIntelligence.com


Zimbabwean cannabis companies is to secure reliable and sustainable off-takers for their product. Local cultivators cannot access the US market owing to its Federal prohibition, and the Canadian market has understandably implemented mechanisms to protect its own industry.


“Zimbabwean licence holders will, however,


need to compete against well-capitalised inter- national groups that are able to withstand long periods of losses. Ultimately, market forces will prevail and lowest cost-compliant producers will secure market share,” he says. A licence fee for medical cannabis costs


$57,250, including value-added tax for five years. Authorities think the licensing regime is the cheapest in the region. Investor optimism—amark of the first days


of the post-RobertMugabe era—hascompletely vanished. According to the UN Conference on TradeandDevelopment2020World Investment Report, foreign direct investment (FDI) inflows to Zimbabwe amounted to $349m in 2017, then reached to $745m in 2018, only to fall drasti- cally to $280m in 2019. Over the past decade, the country has attracted less than $600m per year on average in FDI. Plagued by this decline, and a long depend-


ence on gold and tobacco as the biggest for- eign currency earners, Zimbabwe is looking to diversify its export earnings. Authorities think that cannabis could be the new gold — or bet- ter yet, leapfrog tobacco as the country’s best cash crop.■


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