KKOG Rwanda’s Production of 25,000 kg of Cannabis for Export Leaves Kenyans Salivating, But Where is the Market?
The recent announcement that King Kong Organics (KKOG) Rwanda is nearing the completion of its cannabis production facility in Musanze has generated significant buzz, particularly in Kenya. Considering the enticing figures quoted — like the potential to generate $10 million per hectare — have left many Kenyans dreaming of similar possibilities, even though cannabis remains illegal in the country. President Ruto, of Kenya, has in the recent past gained global notoriety for overtaxing Kenyans to raise local revenues. Consequently, the idea of legalizing cannabis as an alternative revenue source has resonated with many. By legalizing and taxing cannabis, the president could potentially alleviate the heavy tax burden currently placed on the public, the Rwandan story suggests.
However, a closer look at the details raises several questions that need answers.
Is the Market Ready for Such Massive Production?
KKOG Rwanda claims to be the first company to secure a five-year license to cultivate and produce cannabis for medicinal purposes in the country. Production is set to begin on a five-hectare facility in Musanze in September. The company has ambitiously projected a yield of 5,000 kg per hectare, with each hectare raking in up to $1 million; multiply by the five hectares since RDB has allegedly allocated 5 hectares to each investor.
Rwanda legalized medicinal cannabis in 2021, but the infrastructure to support a domestic market is still lacking. While the global cannabis market is indeed expanding, the actual pathways for African cannabis to enter these markets are fraught with regulatory hurdles and stiff competition from established producers in North America and Europe.
The $10 Million Per Hectare is Indeed Feasible
The promise of $10 million per hectare is what has many Kenyans salivating, especially given the current economic pressures at home. But while the numbers might technically be feasible — assuming a greenhouse covering one hectare, with 28,000 plants yielding 60 grams per plant over four harvest cycles, totaling 6,720 kg — the key issue remains: where will all this cannabis go?
Rwanda’s “Visit Rwanda” brand might attract initial interest, hats off to President Kagame who has done a lot to market the Rwanda brand overseas. However, securing off-take agreements or export contracts in such a nascent industry is a different ball game. The global cannabis market, particularly for medicinal products, is heavily regulated. Without clear export agreements or guaranteed markets, these impressive production figures might remain just that — figures.
KKOG’s Presence in Africa: Fact or Fiction?
KKOG has touted its operations across five African countries: Rwanda, Zimbabwe, Malawi, the Democratic Republic of Congo (DRC), and South Africa. However, a closer examination reveals discrepancies. DRC, for instance, has not legalized cannabis in any form, making KKOG’s claims of operations there questionable. In Malawi and Zimbabwe, while there is some progress toward cannabis production, significant challenges remain, and large-scale operations are still far from established.
The Devil is in the Details — and the Black Market
Producing 5,000 kg of cannabis is a considerable achievement, but as always, the devil is in the details. Without a robust domestic market or clear export pathways, one must ask: where will all this cannabis go?
One uncomfortable possibility is that a portion of this production could find its way into the black market. The global cannabis black market remains vast and lucrative, and without stringent controls, the risk of diversion is real. This raises ethical and legal concerns, particularly for a country like Rwanda, which has strict laws governing the use and sale of recreational cannabis.
A Cautionary Tale for Kenya
As Kenyans look across the border with envy, it’s essential to temper expectations with a dose of reality. While the idea of generating $10 million per hectare from cannabis is undoubtedly appealing, the practicalities of achieving such returns are complex and uncertain. For now, Rwanda’s cannabis ambitions remain a story to watch — but one that should be approached with cautious optimism rather than unbridled enthusiasm. The potential for some of this production to end up on the black market only adds another layer of complexity to an already challenging situation.
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Anguka nayo!
