A farm in Stellenbosch has been granted the first Western Cape licence to start growing dagga.
The cannabis company Felbridge, which will produce dagga on a farm near Stellenbosch, has been granted a licence by the South African Health Products Regulatory Authority.
The application process started in October 2017, and required police clearances, site plans and detailed company information. Felbridge also needed an agreement from overseas buyers for its produce, says the company's Leslie Zetler.
South Africa hasn't yet issued licences to local manufacturers of dagga products, but four other companies have already received cultivation licences in other parts of the country, including in Upington and Durban
Felbridge is converting a sweet pepper plantation, including a large greenhouse, into a dagga plant, and is currently securing seeds from Spain. This is subject to approval from the department of agriculture, it hasn't started growing the cannabis yet.
It received a licence to grow 14 000 square metres, but will take a phased approach, says Zetler. First, 150 square metres will be cultivated to test the produce. When it is satisfied with the produce, 5 000 square metres, mostly located in a greenhouse, will be developed.
Zetler expects a yield of four to five crops a year. He said that the company invested "quite a bit" into securing the dagga plantation.
The commercial dagga industry received a massive boost by the Constitutional Court's ruling last year that personal use of dagga is no longer a crime. Earlier this year, Cannabidiol (CBD), a compound derived from dagga, was removed from South Africa's list of highly-controlled drugs, and it is now officially available on prescription.
According to one report, the South African domestic market for cannabis and related products - excluding consumer CBD products, will be worth around R27bn by 2023.
The estimated cost of a setting up a facility and preparing an application will cost aspirant dagga cultivators between R3m and R5m, according to a report by Landbouweekblad.
Felbridge is majority owned by members of the Zetler family, which is well-known strawberry producers. A prominent member of the family, farmer Jeffrey Zetler, was killed last year during a robbery.