One of the hottest trends happening in the US is the growth of marijuana startups. Many states in the US have been legalizing the medical and recreational use of the popular “weed” drug. Last year, a company called Jane Technologies which describes itself as the “Shopify for weed”, raised $100 Million in a Series C round.
Other marijuana startups are also raising funds as the stigmatization against weed slowly dissolves in the US.
In Ghana, it’s a different story. Marijuana use is still illegal and comes with jail time and fines if you’re found in possession of it.
But is Ghana missing out on potential revenue from the popular weed plant? Will the legalization of weed for both health and recreational use open up the path for marijuana startups to flourish in the country?
Current State of Marijuana Legislation In Ghana
According to the Narcotic Drugs (Control, Enforcement, And Sanctions) Law, there are penalties against “The manufacture, cultivation, exportation, importation, possession, injection, smoking, sniffing etc “ without lawful authority” or “without a license” or “without lawful excuse”.
Simply put, you can not import, possess or sell marijuana without a license given by the government.
However, the government passed a new law last year called the “Narcotics Control Commission Bill” which allows the use and cultivation of cannabis for medical and industrial uses — but only the variety that is better known as hemp.
The new law converts the prison term for drug possession for personal use into a fine of between 200-500 penalty units (translating to GHC 2,400 – 6,000).
That all translates that Ghana makes it legal to grow hemp for medicinal use but growing and selling it for recreational use is still illegal.
For example, in the US state of Arizona, taxes on marijuana sales managed to rake in $217.5 million according to the state’s Department of Revenue.
Although this new law has been welcomed by many including the Hemp Association of Ghana, many want to see the government make further strides by making marijuana recreational.
Revenue Opportunity For Government
The Local government in Ghana is currently trying to find ways of making revenue to recover from the COVID pandemic and cover budgets in its 2022 budget. This month, the government passed a controversial “E-Levy” bill that places a 1.5% tax on mobile money transfers.
But the government may be missing out on the regulation and taxation of marijuana for recreational use. If the government could find a way to legalize and tax businesses and startups that deal in marijuana production and sales, there could be a potential revenue windfall.
For example, in the US state of Arizona, taxes on marijuana sales managed to rake in $217.5 million according to the state’s Department of Revenue.
A firm in Germany estimates that if Germany legalizes recreational cannabis, it projects sales of about $2 billion to $4 billion each year for marijuana companies. A tax on those sales could bring lots of revenue to the German government.
How Would A Marijuana Startup Work In Ghana?
If a law was introduced to legalize the recreational use of marijuana, how would a weed startup work in Ghana?
Well, they could use a strategy like Flowhub. Startups could establish a weed dispensary with POS systems for the sale of marijuana. They could also introduce e-commerce stores where users could purchase online and use local delivery services for home deliveries.
Weed startups would all have to register and be given special licenses before they can operate. The government could then regulate the market and tax these companies for its new revenue stream.
Unfortunately, the stigma against marijuana still exists in Ghana. Although the passage of the new Narcotics Bills is welcome, there could be more done to grow the market. Making the medical use of marijuana legal could see companies emerge and contribute to the sale of weed for chronic pains and health improvements.
There are many studies showing that marijuana isn’t as addicting and there are many health benefits associated with it. But just like cigarettes, regulation is needed to make sure it doesn’t get abused.
Could we see legalisation of the weed product this year or in the years to come? It’s hard to say. But Ghana shouldn’t be left out of the marijuana market. The US and Europe are already taking the lead. It’s not too late to join the bangwagon.
Great piece. I think an issue worth considering is the culture of accountability in Ghana. Should a law be passed to legalize the recreational use of marijuana, will we as a country be able to develop and sustain system of regulation to protect consumers? I believe recreational use doesn’t mean usage without brakes and unregulated commerce in the name of raking in revenue. Therefore a government which will eventually legalize consumption will also have to bear the duty of ensuring that wholesome products are out there from suppliers/producers and consumers will be protected. Half the solution may be to incorporate a licensing regime where only authorized suppliers operate subject to maybe biannual renewal. Accountability and regulation will indeed be key.