A proposed cannabis export scheme could eventually bring as much as $1.25 billion (~€1 billion) to Zimbabwe’s treasury per year, finance officials have said.
“Cannabis production has immense potential to generate export receipts and tax revenues,” Finance and Economic Development Minister Mthuli Ncube said as he recently presented his 2021 national budget in Zimbabwe’s parliament.
The revenue estimate is based on a plan that would set export taxes in three categories: Finished packaged medicinal cannabis oils that are ready for resale would be taxed at 10%; bulk extracted oils that require further processing and/or packaging would pay a 15% export sales tax; and dried medicinal cannabis flowers would be taxed at 20% under Ncube’s proposal.
Zimbabwe harvested its first crop of legally cultivated industrial hemp in February 2019 after decriminalizing cannabis growing in 2018. Regulations to guide the industry were released in October of this year.
Zimbabwe’s cannabis legislation governs farming, processing, procurement, distribution, possession, sale and transportation under statutes that guide dangerous drugs and medicinal and scientific products. Producers of cannabis must be licensed by the Ministry of Health and Child Care. Cannabis use for recreational purposes remains illegal in Zimbabwe.
37 licenses granted
Five-year licenses are available in three categories: for farming, research & breeding, and merchandising, under strict government control. Thirty-seven licenses, which are limited to Zimbabwean citizens and legal residents, have already been approved. A policy change announced earlier this year lets investors hold 100% ownership of medicinal cannabis licenses.
Only government sanctioned hemp cultivars may be grown in Zimbabwe, but special permission may be granted for non-approved cultivars under research licensing.
The Zimbabwean government has said the advancement of its cannabis program is in part a response to the decline in demand for cash crops, including tobacco, which historically has been a leading export. Tobacco farming accounted for 11% of Zimbabwe’s GDP in 2017, employing 3 million workers in the nation, population 16 million.