Cannabis requires K30m investment per hectare

United States Cannabis Association (Usca) has said farmers need K30 million per hectare to grow the crop.

The company’s director of operations Oliver Ndhlovu said this in Mzimba last weekend when the company inspected some fields to verify some information given by companies and cooperatives for the production of cannabis.

He said farmers can expect to earn about K187 million from that investment.

The production money includes K8.8 million for about 20 000 seedlings and a greenhouse that costs about K15 million.

Ndhlovu, who said they were also assessing the preparedness of the farmers to grow the crop, added that the cooperatives need to satisfy certain conditions that include having a buyer, which in this case is Usca, and to be awarded licences.

He said: “Malawi only enacted the cannabis production and legalisation law in 2020. This is the second year running and the crop will be the first. So, statistically, the cost analysis for Malawi is not very clear, we are borrowing from other countries.

“Roughly, we would say if somebody wants to produce a good quality crop, it should be about K25 million to K30 million per hectare. We are talking about the seed, the greenhouses, labour and cultivation.”

In a separate interview, United Organic Producers Cooperative chairperson Paul Chongwe said the coming of Usca has assured them of a ready market for cannabis, adding they are hoping for better livelihoods.

He said: “Since the industry is new, we hope the figures that we are getting from other countries will be a benchmark for Malawi as well.”

Earlier, Minister of Agriculture Lobin Lowe said concerns over limited capacity in cannabis business, extension services, weak contract farming arrangements, existence of cannabis markets and seemingly high licence fees will be tackled.

A licence to cultivate, sell and process medicinal cannabis is pegged at $10 000 (about K8.2 million) while a licence to cultivate and sell industrial hemp is pegged at $2 000 (about K1.6 million).

On the other hand, a licence to process industrial hemp is pegged at $5 000 (about K3.7 million).