Uganda has reportedly drafted a strict legislative framework that will govern the country’s nascent medical marijuana cultivation industry.

A draft copy of the guidelines seen by PML Daily suggests that applicants will be required to demonstrate that they have at least $5 million in available capital. They must also have a bank guarantee of around $1 million, along with tax clearance certificates from the Uganda Revenue Authority, a valid trading license, evidence of value addition to cannabis and audited accounts.

Consumption of cannabis is illegal in Uganda, where it is known as bhang. However, the government appears keen to cash in on export opportunities as demand grows for low-cost medical marijuana in markets like Europe and North America.

A firm called Industrial Hemp (U) Ltd. has been permitted to grow medical cannabis as part of a trial scheme, while Israeli firm Together (TASE: TGDR) has previously announced plans to open a cannabis cultivation facility in Uganda. Hundreds of companies have applied for a licence.

Minister of Health Dr. Jane Ruth Aceng is apparently now working on guidelines that will shape a broader cultivation industry there. They stipulate that facilities must not be located near schools, hospitals and residential areas, according to PML Daily.

The Ugandan Cabinet is due to meet today to discuss the draft guidelines and thrash out the final legislative framework. The proposals from Aceng state that the guidelines are intended to prevent the abuse of growing licences.

Aceng and her team have spent months locked in consultations in an effort to understand the economic benefits of cannabis, its medical value based on scientifically proven evidence, including the challenges of regulation so that we can formulate a way forward.

New Frontier estimates that Africa’s total addressable cannabis market is worth $37.3 billion, as the continent accounts for one-third of the world’s marijuana consumers. Founder Giadha Aguirre de Carcer believes that Africa could be better positioned than Canada and Colombia to provide Europe with a cost-effective supply of cannabis.

Lesotho became the first African nation to legalize medical cannabis in 2017, while South Africa also has a budding medical marijuana scene after it was legalized in 2018.

However, it remains illegal in the majority of the continent and Uganda has the potential to take a leading position if it unveils a competitive market.

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