GreenCape, in partnership with the City of Cape Town, has published a new series of industry briefs that highlight opportunities for investment in the hemp and cannabis value chain in South Africa, with a focus on Cape Town.
Key insights [Industry brief 2/3 – Opportunities for cannabis in Cape Town’s textiles value chain]:
- Globally, the cannabis sector is growing, currently valued at $51.28 billion in 2023.
- In South Africa, recent policy and regulatory changes create an enabling environment that is opening up local opportunities for investment and job creation within the sector. In his State of the Nation address, President Cyril Ramaphosa indicated the sector could be worth R406 billion by 2026.
- In Cape Town, and more broadly in South Africa, one of the key opportunities for investment in the sector, lie within the textiles value chain.
- Hemp can be used as a substitute raw material in textiles, replacing less sustainable plant fibres such as cotton.
- There are opportunities to invest in the primary production of hemp, which generates more revenue per hectare than other plant fibres, and can be sold to local or international markets.
- There are also opportunities to invest in the mid-stream processing and spinning capacity of hemp textiles. There is a growing demand for locally-sourced hemp textiles from retailers
Cape Town is well-positioned to become a hemp textile processing hub. It is already home to a number of hemp apparel businesses and most head offices of major national clothing retailers, enabling a vertically integrated value chain. - As the hemp sector is nascent in South Africa, it faces a number of barriers. Primary producers face unclear local markets and off-takers, while processors are hesitant to invest without consistency of supply and volumes (that unlock economies of scale).
- To reduce these barriers, investors in the primary production of hemp fibres, can initially focus on export markets, until South Africa has scaled up investment in hemp fibre processing.
To read the full industry brief, please click on the PDF download button above. To read to the other industry briefs, click on their respective links below.
CCT_Smart Agri 1_Cannabis in pharmaceutical industry brief
CCT_Smart Agri 3_Hemp in construction materials value chain industry brief
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1/3 Pharmaceutical
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2/3 Textiles
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3/3 Construction
