In 2013, Moroccan social media showed signs of optimism towards its economic future as cannabis — one of its oldest, albeit clandestine agricultural exports — was legalised in countries around the world. Uruguay led the trend as it became the first modern state to legalise recreational cannabis. Many others followed suit, including the likes of Canada and 21 states in the US, while dozens of other countries authorised the use of cannabis for medical purposes. 

As the use of cannabis was legalised (or at least depenalised) across the West, Morocco’s Authenticity and Modernity opposition political party urged the government to licence and regulate the cultivation of cannabis. 

Although that proposal did not bear fruit, the country eventually legalised the medical and industrial use of cannabis in May 2021. A few months later, the Moroccan parliament legalised cultivation and production for medical, industrial and export purposes, while production and consumption for recreational use remain illegal. 

The establishment of the National Agency for the Regulation of Cannabis Activities followed suit. To date, the body has issued 35 production licences. 

According to the UN’s Office on Drugs and Crime (UNODC), Morocco produced more than 36,000 tonnes of cannabis in 2017. By comparison, Mexico — the primary source of marijuana for the US — produced just 5000 tonnes. The World Drug Report 2022 found that Morocco was the leading country of origin for cannabis seized at international borders worldwide between 2016 and 2020. 

Given Morocco’s high production and established informal supply links into Europe, many in the country view the new legislation as a lucrative economic opportunity. However, regulating a sector made of thousands of small farmers and middle-men that has long worked in the shadows may be easier said than done. 

The challenges of medical marijuana 

As it stands, the majority of Moroccan cannabis is grown in the Rif mountains, to the north of the country. According to the UNODC, 47,000 acres of this area were used to cultivate cannabis in 2021. 

A 2022 report by CannaReporter, a Portugal-based newspaper covering cannabis-related news, estimates that between 300,000 and 400,000 families are involved in production on the Rif, with 40% of the of five million inhabitants in the area directly dependent on cultivation. 

In March 2022, the government identified three eligible areas for legal cultivation — Al Hoceima, Chefchaouen and Tétouan — all located in the northern Rif region where illicit production is concentrated. 

According to state news agency, MAP, it was estimated that farmers could receive up to 12% of the overall value of the final transaction, while they receive only 4% on the black market. 

While the maths seems good on paper, local farmers will have to deal with the reality of  high barriers of entry into the formal value chain of medical marijuana, owing to the strict guidelines required for pharmaceutical production. 

“If I’m a farmer growing cannabis (illicitly) in Morocco now, I just need a field and to be able to cultivate it,” comments Damon Booth, owner of Maltese cannabis production and research company, Melabis. “Of course, I’ll have to do temperature control and humidity control, but there’s no set standard. 

“But if it needs to be pharmaceutical grade — even a specific screw in the greenhouse needs to be Good Manufacturing Practice (GMP) approved. That’s where the problem is going to lie — the farmers won’t have the capital to do that, and the government won’t do it for them. It’s a massive expenditure. In Malta, at present, you’re running up to around Ä10m for a facility that is fully GMP standard.” 

Disrupting existing supply chains

In addition to the high cost of entry, a lack of trust between farmers in the historically marginalised Rif region and government may throw up another a barrier to entry. 

The region has typically received little attention from the government over the years. In 2016, malcontent burst out in one of Morocco’s biggest mass protests after a fishmonger died in a confrontation with local authorities. 

“There is uncertainty about the extent to which farmers and local communities in the north will adhere to and participate within the legal system,” says Raouf Farrah, senior analyst at the Global Initiative against Transnational Organized Crime.

“On the one hand, these communities have been working with traffickers who control the supply chain and are often members of their own communities living abroad. On the other, there is a big mistrust between the northern population and the state. It has been a very marginalised region over the last few decades.

“Given this, I think it will be big pharma companies and international investors with lots of resources who will control the commercialisation of cannabis. Farmers will just sell raw products to them — this is not a model that benefits communities,” he continues. 

The role of multinationals 

The development of the cannabis industry elsewhere provides insight into the dynamics that a legalisation triggers. 

“What we can see in other contexts, such as Canada and the US, is that cannabis has been taken over by big industry,” says Ghada Waly, executive director of the UNODC, adding that there are few small farmers in the cannabis industry in these countries. 

Foreign investors have announced a total of 128 projects worth $6.5bn in total investment in the production of legal cannabis since 2016, when the first such project was tracked by foreign investment monitor fDi Markets. The US stands out as the biggest investment destination for legal cannabis producers, followed by Colombia and Canada. 

“When cannabis becomes legal, you see that the price goes down. With more big industries getting into the market, the price will fall. What we have seen where it has been legalised, the benefits go to big companies,” says Ms Waly. 

Given the high cost of setting up the infrastructure for medical production, it is likely that larger corporations will play a big role in incorporating farmers into the licit supply chain.

Looking ahead 

With such barriers, legal production remains an elusive opportunity for the small-scale farmers that form the bulk of Morocco’s cannabis producers. 

“To think that this will make Morocco rich is a romantic idea,” says Ms Waly. “If you legalise something, the market changes.

“It is wrong to think that if you change regulation, markets will remain the same. The dynamics and price will change, new players will emerge. You are not solving the problem for small farmers that need more profits or livelihood sources.”

At the same time, the reform gives Morocco and rural communities a chance to engage with the value chain of a fast-growing industry. In this vein, public support and investment may close that capital gap, as well as the trust gap needed for small Moroccan producers in the Rif mountains to really benefit from the new legislation. If nothing changes, they will have little incentive to turn over a new leaf.

This article first appeared in the February/March 2023 print edition of fDi Intelligence.