South Africa hemp market could reach R40bn by 2040

South Africa’s hemp market could expand rapidly over the next 15 years, with a new industrialisation study projecting the sector to grow into a multi-billion-rand economic segment.

A new study on industrial hemp development in South Africa projects strong long-term expansion, reflecting growing interest in alternative crops, bio-based materials and new manufacturing value chains. The research, released by the Department of Trade, Industry and Competition and supported by public institutions, indicates that the hemp market could expand significantly as policy frameworks and investment strategies mature.

The report, developed through collaboration with the Localisation Support Fund alongside the Presidency of South Africa and the Industrial Development Corporation, estimates that the domestic hemp industry could grow from roughly R7.3 billion in 2025 to around R40.4 billion by 2040. Analysts say this trajectory reflects both rising global demand for hemp-based products and the increasing integration of hemp into multiple industrial sectors.

Industrial diversification potential

Industrial hemp is increasingly viewed as a versatile crop with applications across manufacturing, construction, textiles, food processing and health products. As a result, policymakers see the sector as a potential contributor to industrial diversification and rural economic development.

The study highlights that hemp fibres can support domestic textile production and sustainable construction materials. Meanwhile, hemp seed products could strengthen value chains in food processing and nutritional products. Therefore, the sector’s growth could stimulate multiple manufacturing segments while expanding agricultural output.

In addition, the crop’s relatively low water requirements and soil regeneration properties align with broader sustainability objectives promoted by institutions such as the World Bank. These environmental attributes reinforce the crop’s relevance within emerging green-economy strategies.

Policy support and investment outlook

South Africa has gradually eased regulatory restrictions on hemp cultivation over recent years. This shift reflects a broader effort to unlock agricultural innovation while supporting new export opportunities and local manufacturing.

The Industrial Development Corporation has also signalled interest in supporting industrial value chains linked to hemp processing. According to analysts, investment in processing facilities, fibre production and product manufacturing will be critical to capturing the sector’s projected growth.

Moreover, international demand trends may further support expansion. Markets across Asia are increasingly exploring plant-based materials and sustainable textiles. As a result, African producers could find opportunities in export markets where demand for bio-based inputs continues to increase.

Regional institutions including the Southern African Development Community are also promoting agricultural value-addition and industrial processing. Within this context, hemp industrialisation could complement broader regional efforts to deepen agro-industrial supply chains.

While the sector remains at an early stage, the study suggests that a coordinated policy approach, combined with targeted investment and farmer participation, could enable South Africa’s hemp market to evolve into a significant contributor to industrial growth over the coming decades.

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