Mapping pathways to an inclusive and competitive cannabis industry in South Africa through systems thinking and systems dynamics modelling.

Abstract

South Africa's cannabis sector is undergoing a pivotal transformation, guided by the National Cannabis Master Plan (NCMP), which aims to promote inclusive growth, rural development, and commercial competitiveness. However, despite progressive policy intentions, implementation has remained fragmented and exclusionary, particularly for smallholder, rural, and traditional cultivators. This study applies a systems thinking and system dynamics modelling approach to critically assess the effectiveness of cannabis-related policies and simulate alternative reform pathways. Drawing on policy document analysis and comparative international experience, the research identifies structural barriers such as centralized licensing, limited financial access, and weak institutional coordination as key barriers to equitable participation. A dynamic model was developed to test five policy scenarios over ten years, measuring their impact on smallholder participation and legal cultivation area. The results demonstrate that reforms such as decentralised licensing, access-to-finance, and cooperative support yield significantly higher levels of inclusion and production compared to the status quo. Specifically, decentralised licensing yields 1249 smallholder participants by Year 10, compared to only 1051 under the status quo, while access-to-finance reform yields 1304 participants and export facilitation yields 1161 participants, with the latter producing comparatively stronger gains in cultivated area than in broad-based participation. Conversely, without reform, both participation and legal cultivation area remain largely stagnant. The findings underscore the need for coherent, multi-level governance and a shift from aspirational policy to operational reform. Systems-based approaches offer a valuable framework for identifying leverage points, anticipating trade-offs, and designing policies that balance inclusion with competitiveness. The study concludes that meaningful transformation of South Africa's cannabis sector requires coordinated, evidence-based interventions that actively integrate historically marginalized producers into the formal economy.