What topics does this cannabis study cover?

This study covers research on: THC.

Where was this research published?

Published in The International journal on drug policy on June 28, 2026.

THC

How global cannabis markets are creating barriers for small-scale producers

Value capture in the emerging medical cannabis global value chain: insights from South Africa.

The International journal on drug policy • June 28, 2026 • Moderately Relevant

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AI Summary

South Africa is emerging as a major producer in the global medical cannabis supply chain, but new research reveals significant economic barriers that could undermine inclusive development opportunities. A study of 34 stakeholders in the medical cannabis industry found that cultivators face intense regulatory complexity, high entry barriers, and demanding quality standards that require both pharmaceutical rigor and artisanal aesthetic qualities. These challenges create a competitive landscape where smaller producers struggle to maintain profitability while meeting increasingly stringent market demands.

The research highlights a fundamental tension in medical cannabis economics: while the industry is marketed as an opportunity for small-scale farmers in the Global South, the actual barriers to participation are prohibitively high. Cultivators must make major capital investments and develop advanced technical capabilities to compete globally, yet face price volatility and "race to the bottom" competition that threatens long-term viability. Without significant policy support, many small producers risk being squeezed out of the value chain or relegated to commoditized production with minimal profit margins.

For consumers and advocates interested in medical cannabis, these findings underscore an important economic reality: the structure of global cannabis markets may not naturally benefit smaller producers or developing nations as often promised. This suggests that sustainable and equitable medical cannabis industries require deliberate policy interventions—including regulatory harmonization, market protection mechanisms, and capacity-building support—rather than relying on market forces alone to create inclusive economic opportunity.

📄 Original Abstract

A global value chain (GVC)-an international network linking producers and consumers through multiple intermediaries-has rapidly emerged in recent years to connect geographically dispersed cultivators and consumers of legal medical cannabis. This is commonly presented as an important new economic development opportunity for low- and middle-income countries with favourable agro-ecological conditions. This paper analyses the growth of the legal medical cannabis GVC in South Africa, a major emerging supplier, focusing on how chain governance and power relations shape processes of inclusion, exclusion, and value capture. The paper draws on 34 semi-structured interviews conducted between 2021 and 2024 with a range of stakeholders in the medical cannabis GVC, including cultivators, brokers, consultants, and civil society. Interviews were analysed using Nvivo with a hybrid coding strategy. Interviews reveal that cultivators face intersecting challenges: regulatory complexity, increasingly intense competition, bargaining power imbalances, and a demanding series of quality conventions in which the sensory and aesthetic qualities of an artisanal product must be combined with pharmaceutical rigour. Barriers to entry are high, and costly upgrading processes are necessary to avoid falling into a commoditisation trap as easily-replaceable suppliers of a generic good, subject to 'race to the bottom' competition and price volatility. These challenges undermine aspirations for medical cannabis exports to serve as an inclusive economic development opportunity for small-scale cultivators in the Global South. GVC participation requires major capital expenditures and advanced capabilities. Overcoming these challenges would require significant policy support.