Medicinal Cannabis
Print/Download Page As PDF
Invest in Lesotho’s
Medicinal Cannabis Sector
Africa’s Pioneer in GMP-Compliant, Export-Ready Medicinal Cannabis Production. Lesotho stands as Africa’s pioneering nation in medicinal cannabis, offering a proven regulatory framework and optimal growing conditions for high-return cultivation and processing.
Introduction
With the global medicinal cannabis market projected to exceed USD 57bn by 2028, Lesotho’s unique combination of high-altitude climate, established export pathways, and cost-competitive operations positions it as the continent’s premier production hub. Significant investment opportunities deliver exceptional returns through strategic access to lucrative international markets.
Lesotho presents a compelling investment opportunity in the high-value global medicinal cannabis supply chain, focusing on EU-GMP certified cultivation and processing for regulated international markets. The nation’s pioneering legal framework and ideal growing conditions create strategic advantages for investors capitalizing on expanding global demand for pharmaceutical-grade cannabis products.
Strengths &
Opportunities
Regulatory Leadership
First-Mover Advantage:
Africa’s first legal medicinal cannabis framework established in 2017.
Established Licensing:
Clear pathway through Lesotho Narcotics Bureau with Ministry of Health oversight.
International Compliance: Signatory to UN conventions facilitating global trade.
Production Excellence
Optimal Conditions:
High-altitude terrain (2000m+) with intense sunlight, cool temperatures, and low humidity.
Year-Round Cultivation:
Multiple harvest cycles maximizing facility utilization.
Quality Infrastructure:
GMP-compliant facilities with independent analytical laboratories.
Economic Advantages
Cost Leadership:
60-70% lower production costs than North American equivalents.
Competitive Labor:
Skilled workforce at competitive wage rates.
Fiscal Benefits:
10% corporate tax rate on commercial farming.
Key Medicinal Cannabis Target Markets & Import Data (2023)
LESOTHO’S COMPETITIVE POSITION
Lesotho has established a formidable position in global medicinal cannabis, with annual exports estimated at USD 15-20m (2023). The export portfolio shows strategic diversification with dried flower (65%) as market entry, complemented by higher-value extracts (25%) and foundational seed exports (10%). Market reach spans multiple continents through established EU channels, consistent Canadian access, and growing Asian market presence.
Global Market Dynamics
North American Expansion:
The United States’ 38 medical cannabis programs create diverse import channels requiring state-specific compliance, while Canada’s established import framework welcomes quality alternatives under Health Canada’s rigorous oversight. Both markets show growing demand for GMP-certified imports where Lesotho’s established quality systems provide competitive advantages.
European & Asia-Pacific Growth:
Germany’s market expansion under Section 72 AMG requirements and Australia’s 22% YoY growth under TGA oversight provide immediate opportunities, supported by regulatory alignment between international quality standards that facilitates market diversification for Lesotho’s GMP-compliant producers.
Strategic Expansion
Immediate:
Target North American supply partnerships meeting state-specific requirements and clinical trial materials.
Long-term:
Establish European pharmaceutical integration under EU-GMP frameworks and technology transfer.
Vision:
Become Africa’s premier GMP-certified export hub leadership with multi-market compliance capabilities.
Incentives
10% corporate tax rate on commercial farming.
25% standard corporate tax rate.
Training:
• Cost of Lesotho citizens allowable at 125% for tax purposes
Withholding tax:
• 10% on service contracts with non-residents
• 25% on dividends distributed from income by resident companies to non-resident shareholders
• No withholding tax on dividends distributed to Lesotho residents VAT.
• 15% on goods and services sold in Lesotho
0% on direct exports Risk guarantees:
• Partial credit guarantee through the LNDC
• Tailor-made, agriculture-specific loan through the Post Bank of Lesotho
Specific incentives for the horticulture sector:
• Access to a Sesotho language technical training manual for local workers in on-farm and crop management
• Access to demonstration and crop pilot plots
• Facilitation support to identify and mobilize village level farmer engagement
• Access to technical data on historical crop performance
Support from the LNDC includes:
• Serviced industrial and commercial sites at competitive rentals
• Provision of industrial and commercial buildings at competitive rentals
• Financial assistance on a selective basis
• Investment facilitation services
• Assistance with permits and licenses
• Assistance with company registration
• Assistance with industrial relations issues
• Appraisal of investment projects
• Assistance with preparation of project briefs for the Environment Impact Assessment (EIA) Certification
List of investment opportunities
Core Operations:
GMP-Compliant Cultivation:
Climate-controlled greenhouses (5-20 hectare scale).
Primary Processing:
Drying, trimming, and packaging facilities.
Quality Assurance:
HPLC/testing laboratories for cannabinoid profiling.
Target Markets:
Canadian and European medical programs
Value Addition:
Extraction Technology:
CO₂ and ethanol systems for oils and distillates
Product Development:
Tinctures, capsules, and sublingual formulations
Market Expansion:
US state programs and Australian TGA-regulated market.
Advanced Manufacturing:
Finished Products:
GMP-certified final dose formulations.
Research Innovation:
Proprietary cultivars and delivery technologies
Global Partnerships:
EU and North American distribution alliances
SDGs alignment
The project aligns with Sustainable Development Goals 3, 8, 9 and 12.
Example of a site for growing and processing medicinal cannabis.
Financial Analysis
TOTAL INVESTMENT
A total investment of approximately:
USD 4.6m
comprising fixed assets of USD 2.8m, pre-production expenditure of USD 816k and initial working capital of USD 1.03m, will be required for the establishment of the Medicinal Cannabis enterprise. The graphs below illustrate a financially viable operation with the enterprise expected to generate a profit throughout its operational life.
Whereas the opportunity generates a positive NPV and IRR, the initial investment cost of the project, although acceptable, is only expected to be fully recovered in year 11. The investment opportunity nevertheless responds favourably to the Country`s developmental objectives through its positive socio-economic impact in terms of employment creation, economic agglomeration and potential forex earning opportunities.
The enterprise’s annual net profit after tax increases from approximately:
USD 456k
in year 1 to approximately:
USD 830k
in year 10.
Similarly, the projected cash flows of the envisaged project indicate that it will generate positive net cash flows throughout the 10-year operational period.
Financial Analysis
Example of site for medicinal cannabis is made.
Medicinal cannabis.
NOTE
This is a mid-sized sized facility focused on processing medicinal cannabis into CBD oils and flower drying for export to EU and SACU markets. The facility has a production capacity of 5,000 kg dried flower equivalent annually. The financial analysis of the Medicinal Cannabis investment opportunity is computed over a ten year period. Revenue and expenditure projections are in line with industry growth prospects and market potential and have been informed by and benchmarked against industry standards and norms. In addition, assumptions relating to inflation; depreciation and salvage value; and company tax have been worked out based on the existing laws and directives of the country. The figures above represent high level estimates as of October 2025 and are not derived from a full feasibility study. Investors are advised to conduct their own due diligence.
Disclaimer
This web page provides a strategic overview. All financial figures are based on a high-level investment opportunity model and should be used as an indicator of potential only. Investors are strongly encouraged to conduct independent due diligence and a full feasibility study with the support of the LNDC to validate all assumptions under current market conditions.