CANNABIS CULTURE – Clever cannabis entrepreneurs across Africa are steaming ahead with niche trends like cannabis software and canna-infused drinks — now they look to cash-in in 2021.
For eagle-eyed Africa cannabis investors/observers, here are top niche trends to grab onto.
Cannabis software, a potential money-maker is an often over-looked startup sector that could potentially reap benefits for niche investors.
In South Africa, and elsewhere on the continent, local info-tech startups appear to be slow to the action when it comes to massive opportunities presented by cannabis-software.
“Cannabis-software via apps is critical to sell seeds digitally, register weed farms online, or store weed court cases for scholars to reference 50 years from now. The money opportunities are endless,” says Carter Mavhiza, an independent accountant in Johannesburg, South Africa.
“So far, local startups here in South Africa are slow to the feast. Premium researched, localized cannabis data could be sold for lucrative prices if placed behind a paywall. Look at millions using the European Researchgate database. Why not have same pay-walled African cannabis database?”
A look at South Africa and Africa´s messy cannabis data littered all over the place, shows that foreign data startups like BioTrack of Florida, are moving at speed to scoop, extract and synchronize Africa´s cannabis data for future selling to investors, researchers and even government policy makers.
“Cannabis software, this is a hot niche market that just sitting there across Africa, underexploited,” adds Mr. Mavhiza. “Like Bitcoin we may someday soon see online only African cannabis stocks-exchanges, sort of, run by traders and citizens with no government input? Imagine the profits for pace setters who are scooping and storing Africa cannabis data right now.´
The global CBD Skin Care Market is valued at 221.2 million $US and is projected to reach 831.9 million $USD by the end of 2026,” according to MarketIntelligenceData.com.
This is another market not yet critically taken off across Africa’s cannabis sector.
The Western CBD Skin Care Market is hot but saturated with fierce competition. Not so in Africa. For example, in Zimbabwe, a country that legalized cannabis in 2019, there is “not yet a single CBD skin care retail shop or production factory,” says Audrey Simango, a food science scholar at the Harare Institute of Technology in Zimbabwe. “CBD Skincare is low hanging but extremely lucrative fruit waiting to be picked by clever investors who can rush into the African market right now,” Simango says.
To underscore how wide open the Africa CBD skincare market is — in South Africa only two corporations, Goodleaf and Alchemy Elixzar are prominent in a market that by 2023 could be worth $1,7 billion according to a Prohibition Partners report.
“If there was an opportunity to stand atop a hill and shout – get in – that opportunity is CBD skincare products trade,” explains Carter Mavhiza, an independent accountant. “It´s just a clear profit, low competition sector right now.”
The opportunities in CBD skin care in Africa are so varied and even contain niches-inside-niches. For example, in South Africa, GoodLeaf is combining nutritional benefits of CBD and hemp seed oil with various other oils derived from African botanicals – including Roobois tea plant, Marula fruit, Myrrh incense – to produce organic beauty care products for various types of skins.
“Apart from generic CBD skincare products, organic is also a growth sub-sector within an already ripe African CBD skincare market. The possibilities are just endless, and competition still low,” adds Audrey Simango the food science scholar.
When legalization of cannabis gained momentum across Africa in 2019, drinks were some of the possibilities growers and traders hardly imagined. “I remember when weed was legalized in South Africa, business talk was merely restricted to plowing fields of cannabis and harvesting,” adds Mavhiza.
“Everybody was so focused on just the smoking aspect. Very little was explored about upscaling the end product to make drinks, until now.”
Cannabis-infused drinks are another hot take sector of the market that are already rolling in earnings for early pacesetters in Africa. Hemp seed extract, and pure spring water, is roaring in awards and profits for one CNS Beverage and Food, a South African maker of the popular cannabis-energy-drink beverage.
Durban Poison, a 4% alcohol content beer that infuses hemp oils to give itself a leafy, salty taste has grabbed global limelight for South Africa.
Yet, again, as with CBD skincare the market for canna-infused drinks is vast and largely underexplored across Africa, unlike say Europe and Canada where competition is fierce.
“Across Africa it´s only South Africa that´s making serious attempts to produce dagga beer, CBD coffee, CBD and hemp-oil infused dog food or dagga-soft serve ice cream. In the rest of the continent such novelty products are still unknowns and the idea of dagga infused yoghurt condemned,” laughs Audrey Simango, a food science scholar.
For a sharp eyed investor or startup this sector presents an opportunity to relatively run unopposed. For instance, From The Bakery, a dog biscuit company in South Africa is selling CBD oil and hemp infused dog treats for up to $8. For the price, pet lovers get 15 biscuits which each contain 5mg of CBD.
“As Africa´s middle-class citizens continue to blossom these are the hidden yet highly lucrative cannabis sub-sectors that startups with good listening skills are going to exploit. Not everybody must be a weed farmer or harvester to make good money,” says Carter Mavhiza.
“Marijuana in flower baskets, I think to be fair everywhere globally this quite a new and uncharted territory, a risqué idea,” says Ida Schonenfield, director of the lobby South Africa Florists Alliance. “But this is such a dare-do business niche that´s going to become the norm especially for florists that mix organic weed leaf and organic flowers. 20 of our florist members are already flirting with weed in flower baskets and we would like to believe we are pace-setters.”
Smoke-able hemp, smoke-able CBD flower delivered with traditional flower baskets, this is potentially thrilling delivery startup/florist economy in the near-future.
“The pandemic has inspired us to think of new novelty ways to re-arrange the gifts economy. What a better way than, like Uber-food delivery, we create traditional flower-and-marijuana gift baskets for the work-from-home economy that is going to last for many years to come?” Says Schonenfield.
In African nations where cannabis is legal — “delivering cannabis mixed with traditional flowers via online orders, could result in a grey area where beauty and smoking are hard to distinguish,” says Gerald Vasco, an attorney who represented cannabis sellers in the high court of South Africa ahead of legalization.
“But here is the thing from the grapevine: a few small CBD flower sellers her in South Africa are already partnering with select traditional florists to courier to doorsteps flower-weed-mixed gift baskets to disabled, and the work-from-home customers. Transactions happen smoothly online.”
For eagle-eyed African cannabis startups in 2021, it looks like the quest for profit will move into niche areas rather than simply growing and harvesting marijuana.