The report was published by the Localisation Support Fund in partnership with the Industrial Development Corporation and the Department of Trade, Industry and Competition. It suggests hemp could help expand manufacturing, boost exports and support climate friendly industries across the country.
Researchers estimate the sector could grow to R40 billion, or roughly $2.5 billion, within the next 15 years.
Industry advocates say hemp’s versatility makes it particularly valuable. The plant can be used for a wide range of products, from high nutrition foods to sustainable construction materials.
Irshaad Kathrada, chief executive of the Localisation Support Fund, said nearly every part of the plant has commercial value, but the sector will only reach its potential with clear policy support and investment.
Global demand for hemp products is rising quickly. The market is projected to grow from $10 billion in 2025 to $37 billion by 2032, creating new opportunities for emerging producers.
South Africa could benefit from its geography. The country’s diverse climate zones allow hemp to be cultivated in multiple regions, while established industries such as textiles, automotive manufacturing, food processing and paper production could incorporate hemp based materials into their supply chains.
Authorities have already begun issuing cultivation permits. Since 2022, about 1,725 permits have been granted covering around 29,000 hectares, mainly in Gauteng, KwaZulu Natal and the Eastern Cape.
However, the report highlights several challenges that could slow progress. One of the biggest gaps is the lack of large scale processing facilities needed to convert hemp into fibre, grain products and other industrial materials. Without this infrastructure, farmers struggle to access commercial markets.
Regulatory fragmentation has also created uncertainty for investors.
Despite these challenges, several industries could adopt hemp products quickly. Plant based foods such as hemp milk, flour and cooking oils are expected to lead early demand, along with personal care products made from hempseed oil.
Industrial uses could follow. Hemp fibres can be used to produce biodegradable packaging, technical fabrics, paper products and construction materials such as hempcrete and insulation. In the building sector, hemp hurds, the woody core of the stalk, could become a key raw material for low carbon construction.
The report concludes that developing the industry will require cooperation between government and the private sector. This includes financing for processing facilities, support for early stage companies and business models that connect farmers, processors and manufacturers.
Supporters say the research also helps clarify regulatory discussions around hemp and cannabis. For policymakers and investors, it presents industrial hemp not just as a crop but as a potential pillar of South Africa’s future green and industrial development.
Photo by ChrisSteer from Getty Images Signature
