Finance and Economic Development Minister Professor Mthuli Ncube told Parliament on Thursday that the export of medical cannabis has the potential to generate US$1.25 billion through taxes.
Presenting the National budget, the minister said that the government is set to introduce a tax on the export of medical cannabis to tap into this market.
Professor Ncube proposed to legislators a Cannabis Levy of up to 15 per cent on cannabis-related exports.
Cannabis (mbanje/imbanje) production has immense potential to generate export receipts and tax revenues. The potential value of cannabis exports for medicinal purposes is estimated at about US$1.25 billion for the year 2021.
I, therefore, propose to introduce a Cannabis Levy, chargeable on the value of exports, at the following varied rates of tax that correspond to the level of processing: 10 per cent on the export sales value of finished packaged medicinal cannabis oils that are ready for resale, 15 per cent on the export sales values of bulk extracted medicinal cannabis oils that require further processing and/ or packaging and 20 per cent on the export sales value of dried medicinal cannabis flowers, he said.
The Government gazetted the legal framework for cannabis production through Statutory Instrument 62 of 2018 (Dangerous Drugs — Production of Cannabis for Medicinal and Scientific Use Regulations).
In the process, Zimbabwe became the only second country in Africa to legalize mbanje for medicinal purposes.
According to the SI, producers of cannabis must be licensed by the Minister of Health and Child Care and the licence costs upwards of US$40 000.
However, cannabis use for recreational purposes remains an offence.
Prior to the new law, people found growing cannabis in Zimbabwe were liable to a jail term of up to 12-years.
The global total cannabis market (regulated and illicit) is estimated to be $344 billion USD. The top five regional markets are:
- Asia ($132.9 billion)
- North America ($85.6 billion)
- Europe ($68.5 billion)
- Africa ($37.3 billion)
- Latin America ($9.8 billion).
There are an estimated 1.2 billion people worldwide suffering from medical conditions for which cannabis has shown to be of therapeutic value. Adoption of medical cannabis treatment, by even a small proportion of that population, will create a massive market.