The Government of Malawi has introduced licence fees for the cultivation of medicinal/ industrial Cannabis, but some Malawians are unhappy

If there is one example of a country whose people are so engaged in it’s Political and Democratic process, but also so easily enraged that at the slightest whim they’ll publicly criticise any decision from their government – when such is deemed wrong or unfair, look no further than Malawi.

Recently the Tonse Alliance government of Lazarus Chakwera gazzeted cannabis licence fees for the cultivation of industrial or medicinal hemp (cultivation, storage, distribution & selling), as part of it’s commitment to implement the legalization of cannabis cultivation and processing (following a bill which Malawi’s parliament passed in February 2020), and take advantage of the huge opportunities that exist within the sector.

However the decision has sparked a huge national debate, with some Malawians complaining angrily that the fees are too high and unaffordable for the average Malawian farmer, whereas others disagree with this complaint and are saying that the fees present an opportunity for groups of farmers to work together in cooperatives, managing larger and more efficient commercial farms, instead of the archetypical small subsistence farms common in Malawi.

Among the complaints being made is also the assertion that since the fees are beyond the affordability of ordinary Malawian farmers, it will in fact be those with deep pockets and foreign investor companies who will ultimately come to dominate the market, creating another monopoly that is controlled by a select few, and which is beyond the reach of ordinary Malawians.

The government has missed an opportunity to empower farmers in the villages – some of whom have been cultivating cannabis illegally in hidden farms for years, who would have otherwise been legitimised had the licence fees been affordable.

The government has missed an opportunity to empower farmers in the villages – some of whom have been cultivating cannabis illegally in hidden farms for years, who would have otherwise been legitimised had the licence fees been affordable. – one person told me.

Sameer Suleman, chairperson of the Parliamentary committee on Agriculture, described the cannabis licence fees as a deliberate move to prevent Malawians from benefiting from hemp farming.

A Malawian tobacco farmer

It’s unfortunate that many Malawians cannot afford the licence fees for the cultivation of medicinal / herbal cannabis, but it is not surprising seeing Malawi’s weak economic standing on the global stage. It is also true that several large industries in Malawi (Rubber, Coffee, Tobacco & Sugar to name a few examples) have come to be dominated by deep-pocketed individuals or well-resourced foreign companies, some of whom demand cheap labour and low tariffs on the raw materials they export. For this reason, my sympathies lie squarely with those who are calling on the government to do more to help Malawian farmers, the great majority of whom would struggle to raise $10,000.

One way of achieving this would be a Cannabis Cultivation & Processing Loan Scheme that would be extended to a group of farmers, say a minimum of 3 farmers who get together to collectively cultivate the crop. The way it would work is that a ‘Commune‘ of 3 or more farmers would get together and register their interest for a licence with the Cannabis Regulatory Authority, including providing details of the size of the land that is to be used, it’s location(s) and what crop(s) are normally grown on it.

The government would then record these details and after a verification / inspection process, would issue the licence, stipulating that the licence cannot be transferred / sold to a party other than those to whom it has been issued; that only the farmers named in the commune can use that licence.

The farmers would then be assisted with technical know-how, training, equipment (Fencing, solar panels, irrigation equipment, etc.), or other essential inputs that are required for the optimal cultivation of the crop. All this would be part of the loan. A small collateral would probably be required, although such would need to be means-tested, in that poorer farmers should be exempt.

A Cattle auction

Once the crop is ready, an Auction House or stock exchange operating under the auspices of the Cannabis Regulatory Authority could be established that deals with marketing various grades of the crop to buyers, both local and international, both physically and online. The licensing fees (or a part thereof) for the licence issued to each commune, and other capital costs, would then be deducted at this stage, or over several years.

I believe such an approach would lessen the financial burden of raising the licence fees, and capital costs, on impoverished farmers, and would ensure that Malawians are not unfairly prejudiced by their economic circumstances.

I think this would be a better model of taking advantage of the opportunities in the sector, while not excluding Malawian farmers, however, an alternative approach could be the use of public private partnerships.

But to be fair on the government of Malawi, this sector is being seen as one way which can help them balance the country’s books. When Tobacco sales (Malawi’s largest source of export revenues) have been declining (they were down 31% recently) and the country’s economy has been negatively impacted by COVID-19, a fresh in-demand crop with established international markets presents a rare opportunity.

Our view as regulator is that if we get honest investors, the hemp industry can supplement export revenues from tobacco, and in some cases, surpass it. But it will not immediately replace tobacco” said one Boniface Kadzamira, the Board chair of the Cannabis Regulatory Authority.

So I don’t necessarily think the licence fees should be slashed by too much. As a compromise, maybe an explicit distinction needs to be made between “Private applicants” and “Corporate applicants”? Done this way, the licence fees for corporate applicants can actually be increased to say $25,000, helping subsidize the private applicants.

Malawi among other things is also famed for its recreational Cannabis sativa strain known as “Malawi Gold” , which is extremely hardy, and according to a World Bank report is among “the best and finest” marijuana strains in the world.