Zimbabwe targets US$1.25bn mbanje exports

ZIMBABWE expects to realise up to US$1.25 billion export earnings from medical cannabis production with Treasury on Thursday proposing to introduce a new cannabis tax to widen the revenue base.

Zimbabwe began harvesting its first crop of legally cultivated industrial hemp in February this year after it decriminalised cannabis growing in 2018 to tap into the multi-billion-dollar industry.

About 37 approved investors have shown interest in producing cannabis for medicinal or scientific purposes. These get licences valid for up to five years, and have to produce the crop under strict monitoring.

“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,” said Finance and Economic Development Minister Professor Mthuli Ncube while presenting his 2021 National Budget in Parliament.

In recognition of the immense benefits that can accrue to the country from cannabis exports, the Government promulgated legislation to govern the production, procurement, distribution, possession, sale, provision and transportation of the crop.

“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 percent on the export sales value of finished packaged medicinal cannabis oils that are ready for resale, 15 percent on the export sales values of bulk extracted medicinal cannabis oils that require further processing and/ or packaging and 20 percent on the export sales value of dried medicinal cannabis flowers,” said Prof Ncube.

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).

According to the SI, producers of cannabis must be licensed by the Minister of Health and Child Care. However, cannabis use for recreational purposes remains an offence.

Last year, the Zimbabwe Industrial Hemp Trust (ZIHT) planted five varieties of European industrial cannabis on a 10-hectare plot at Harare Central Prison.

Preliminary results showed that of the five varieties planted, only two performed well, with poor rains and high temperatures being blamed. The results also showed that the crops grew and budded quicker than anticipated.

Source – chronicle