Zimbabwe has just announced a new government initiative to finance the country’s ‘green industry’. The country’s new ‘Green Industry Fund’ will provide up to $20 million in funding to help the development of ‘green industries’ – which will probably involve cannabis production in Zimbabwe.

Zimbabwe is in the process of identifying and attracting foreign cannabis investors to help finance the country’s agriculture and construction sectors. The country has launched what it calls a green industry fund to attract investors for medical marijuana and the industry, which is widely regarded as one of the least developed in the region.

The government of Zimbabwe has started a new industrial policy that will incentivize foreign investors to set up greenhouses in the country. The policy, called the Green Industry Fund, is designed to attract investors into the marijuana industry. Already, Kariba is the only area in Zimbabwe where the marijuana industry is legal, and it is the only place where there are cannabis plantations. The policy, however, is open to a broad range of industries, from vegetables to meat to dairy, all of which could eventually grow in Zimbabwe.. Read more about cbd stocks to watch and let us know what you think.

The Zimbabwean government has created one of the most interesting and potentially popular cannabis-related financial instruments in the world. Namely the Green Fund, which is backed by key government agencies and which the government hopes will be used to fund cannabis-related projects.

What is even more remarkable is that Zida’s proposed fund, the government’s one-stop shop for local and foreign investors, is a complete reversal from the agency’s policy, which is only a year old. Zida was founded to streamline the investment process in Zimbabwe in order to somehow attract economic development aid to the country.

This initiative is a testament to the potential of cannabis in Africa, and medicinal cannabis is an increasingly hot topic for green investment, especially in developing countries, wherever they may be.

In Zimbabwe, the government expects revenues from cannabis exports to exceed (by a factor of three) those from tobacco exports in the near future. Tobacco, before cannabis, was Zimbabwe’s most valuable export crop. Between September and November last year, the government issued 44 permits and total revenue for companies in this area is expected to reach $1.25 billion this year.

From a global perspective, this is also a good time. The spring and summer have been very green in terms of reform. The Zimbabwean government’s decision also came just a month before Morocco decided to legalize medical cannabis and Portugal began talks on an alternative market for adult use in Europe.

Cannabis reform along the Belt and Road Initiative ?

Cannabis is not a new crop to Africa. In fact, many African countries have been trading in it for decades (see Morocco). But the standardization of factory operations offers new opportunities for emerging economies that lack both the development and investment to drive them. One of the biggest challenges facing budding cannabis entrepreneurs in Zimbabwe and beyond is the problem of accessing capital. Apart from the difficulty of finding investors (even foreign ones), the cost of money (even to get a loan to expand an existing business) in the country is much higher than what most people in western, developed countries are used to.

The regulated cannabis industry is nothing more than a fundraising industry.

Therefore, Chinese money currently being used to improve connections between southern economies, including infrastructure such as roads, could also find its way into the cannabis industry – long before such reform or cultivation is generally allowed in the country. Or before Western investors developed the industry well beyond its infancy.

African investment funds and European interest in the region

According to a study by High Times, there are several green, not to mention cannabis, fundraising initiatives currently underway in Africa – including cryptocurrencies. However, in a shocking move for investors in the sector, the South African government is planning to phase out a special tax deduction called Section 12J – essentially a tax refund for funds invested in specially licensed venture capital funds used by early investors to fund cannabis businesses. The new Zimbabwean fund may in fact have been set up to take the place of the South African investment fund, which has been disbanded.

Several European family offices have investments in Africa. Most large Canadian companies have also been early investors in cannabis experiments in Lesotho and South Africa.

These projects are starting to pay off – but many early projects are finding out that they need to spend extra money on export certification (especially to Europe). For this reason, the South-South market (including exports within Africa, if not to Israel and Australia) is likely to account for the lion’s share of African exports (for the time being) – although some companies from South Africa and Lesotho have successfully penetrated European markets.

The future of cannabis in Zimbabwe and beyond

Lesotho became the first African country to legalize cannabis (2017). Since then, Zimbabwe, South Africa, Malawi, Eswatini, Zambia, Uganda, Rwanda and Ghana have begun some form of reform. The continent is ideal for growing cannabis outdoors, starting with its position on the globe and the amount of sun it receives.

As policymakers consider alternatives to destructive crops (such as tobacco), the future of African cannabis production looks bright. In the short term, the lack of compliance in other countries (e.g. Europe) is just one of many barriers to the development of the industry here (at least for exports to the EU).

However, as cannabis becomes more normal – even in Africa – it is clear that the plant can have a significant impact on economic development, whether for medicinal use or the production of cannabis-based materials for construction and other applications.

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