Please ensure Javascript is enabled for purposes of website accessibility

Malawi Legalizes Medical Marijuana

By David Jagielski - Updated Mar 2, 2020 at 11:02AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It follows in the footsteps of four other African countries that have loosened restrictions on cannabis.

Marijuana legalization continues to advance around the world: Malawi's parliament passed a bill last week that will permit the cultivation and sale of cannabis for medicinal use or to process the hemp fibers for industrial use. 

Malawi joins four other African countries that have loosened laws relating to cannabis: Zimbabwe, Zambia, South Africa, and Lesotho. Lawmakers are hoping that cannabis cultivation can provide an economic boost to Malawi, one of the world's poorest countries.

Boniface Kadzamira, a former member of parliament who in 2015 pushed for legalizing hemp, sees this as a great opportunity for the country of 19 million people: "It is my strong view that cannabis will in the long run replace tobacco to become our major cash crop -- that will contribute hugely to the GDP." 

Cannabis plant.

Image source: Getty Images.

Malawi could be a new target for North American cannabis companies

One cannabis company that has already made inroads in Africa is Canadian producer Aphria (APHA). In 2018, it entered into a joint venture with Verve Group, which in turn acquired a majority stake in Verve Dynamics, a medical marijuana producer in Lesotho. 

Among Aphria's goals in expanding into Africa was to bring down its costs. At the time of the deal, then-CEO Vic Neufeld noted, "Verve is poised to become one of the lowest-cost producers of medical cannabis extracts in the world." 

Aphria's strong international presence has been key to its growth. In its most recent quarter, CC Pharma, which generates distribution revenue for Aphria in Germany, contributed 86.4 million Canadian dollars in sales -- more than 71% of the company's total net revenue of CA$120.1 million. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Aphria Stock Quote
Aphria
APHA

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
323%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.