The small African nation of Lesotho could soon be home to a giant medical cannabis operation – but questions over cheap labour hang over the plans.
When Andreas Met started telling people he was leaving the west coast of United States to try and develop the world’s biggest medical cannabis farm in Lesotho, Africa, he got one of two responses: ‘wow, that’s really cool, man’ or ‘oh, that’s really dangerous’.
“I’m an American and Americans are pretty ignorant, right, so let’s just start there,” he says, “most people don’t even know there’s a place called Lesotho”.
Well, there is a place called Lesotho, or the Kingdom of Lesotho to be more precise.
If you have heard of it, there’s still a good chance you’re pronouncing it wrong – it’s pronounced ‘luh-soo-too’.
It is the world’s largest enclaved country, surrounded on all sides by South Africa. It gained its independence from the UK in 1966 and is home to around two million people.
Almost half of those two million people live in poverty. Close to a quarter of all adults test positive for HIV and the average life expectancy is somewhere in the mid-fifties.
It has a GDP of $2.3bn (one seventieth of the state of Oregon, where Halo was founded), ranks 83rd out of 179 countries for corruption, hovers near the bottom of the table in the United Nation’s human development index – and in 2017 it also just so happened to become the first African country to legalise the cultivation of medical cannabis.
In July, Met’s company Halo Collective – which has been growing cannabis in the US since 2015 – acquired Lesothian firm Bophelo Biosciences and Wellness in a $5.6m dollar move.
Their money got them a foothold in another continent and an impressive executive addition in the form of its founder, leading African businesswoman Louisa Mojela, who was born in Johannesburg to Lesothian parents and has developed a reputation as one of the continents most influential female entrepreneurs.
It got them something else too: A pre-approved nine year licence to cultivate and export an eventual 200 hectares of medical cannabis.
Not only is that the largest farm ever approved in Lesotho, it could be the largest in the world.
It’s hard to get exact numbers on the size of farms globally, especially those which are only part developed and have the potential to expand, but to put 200 hectares into context, in 2018 the BBC reported from a cannabis farm in British Columbia, Canada, which at the time was described as the ‘largest of its kind in the world’. That was a little over four hectares.
Another under development by Asterion Cannabis near the Australian city of Toowoomba has also been described as the largest of its kind in the world. That one will be 75 hectares.
If you’re struggling to visualise what 200 hectares looks like, picture London’s Hyde Park. That’s 140 hectares.
“What’s really appealing to me about this amazing opportunity is to create the world’s largest cannabis grow ever seen and hopefully for a long time the largest grow [in the world]” Met tells me giddily over video call from South Africa.
“Our ultimate goal in my head, and this is four or five years down the road, is 200 hectares of nice cannabis blowing in the wind, as far as the eye can see, cannabis growing everywhere. That’s what turns me on.”
There’s still a long way to go. They’re a quarter of the way to the initial part of the licence, a five hectare farm which will serve as a nursery for the eventual mega-operation.
But the signs are good. Of the dozen or so strains they grew at their site most recently, more than half had THC levels above 20%, the high potency required for the production of medical cannabis treatments.
With a government enthusiastically backing the cannabis industry and more than 200 days of sunshine a year, Lesotho looks like a good investment.
Consultancy firm Prohibition Partners forecast the global market for cannabis will be worth a staggering $103.9bn by 2024, fuelled primarily by medical usage.
It’s hard to put a number on the future value of a crop, especially at an uncertain time for the world economy and with most developed countries still a long way from fully embracing medical cannabis – but you don’t need to be Warren Buffet to see that the potential returns from 200 hectares worth of high grade plant could be eye-watering.
But it’s that hypothetical payday that might give you pause to consider the ethics of exporting production to a country where, as Andreas puts it, ‘the labour costs are a fraction of what they are in the US’.
In an industry with its roots in the idealistic 1960s and keen to shout about its progressive values, an operation benefitting from cheap labour and with the potential to become extremely lucrative is bound to raise a few eyebrows.
Andreas has heard all the criticisms before – not least from his ‘daughter’s friends at university’ – and jumps at the chance to refute them.
He said: “My comment back is we’re [in Lesotho] to grow in a great environment. The unemployment rate in this village, I’ll make a guess, is 40-50%…the best people in Lesotho who get degrees as teachers end up leaving to go to South Africa to work as nannies.
“There’s an entire movement of people from Lesotho to where the jobs are and what I say is that we are creating an environment and a place where people can have generations of employment, be much better off than they were and learn a skillset that can compete with anyone else on the planet and I can only see that as a good thing.
“It’s a win-win in my opinion. I think about this kind of stuff all the time and I know that what I’m saying is factual and true and real.”
He’s enthusiastic about his workforce, which numbers up to 100 and is drawn from ‘subsistence farmers and shepherds’.
“They are hungry to learn and they are very hard workers, they’re very committed”, he tells me, adding “they’re never late, they always stay on time, some come in after work to work”.
Met and Mojela tell me how they are 90% of the way to achieving certification under international agricultural standards and how they will invest in the region (when the takeover was announced, they pledged 10% of pre-tax profits to community causes). Met also runs outreach programmes aiming reduce gender-based violence.
The pair say they are inundated with job applications from local policemen, border guards and bank workers who have heard about the good wages and conditions at the site. Andreas calls it a ‘very safe, very positive work environment’, a model of ‘how you would like to run a very nice company anywhere else in the world’.
But when I ask them how much they pay their staff, they stonewall.
Mojela said: “I don’t think that is necessary, I wouldn’t want to disclose that, we also have competitors in Lesotho, this is propietary information we should not necessarily disclose. All I can tell you is that we pay our employees very well.”
The most they’ll tell me is that they pay ‘far above’ government regulated minimum wage.
One online source puts a minimum monthly salary for an employee with less than a year of service at 1,620 Loti – or around $120 US dollars a month. In Jackson County where Halo began its growing operations, the minimum wage is $12 an hour.
The maths is pretty straightforward: Ten hours of labour in Oregon costs the same as a month in Lesotho (not accounting for the amount above the basic rate Bophelo is paying).
Mojela says that no one is ‘being taken advantage of’, adding ‘the more foreign investment that comes into Lesotho the better it will be for the economy’.
Met tells me how he’s committed to raising the life standards of his employees and their communities but is also open about the hard-headed rationale about growing overseas.
“My perspective is that the US is very bad place to do cannabis business because of poor tax treatment”, he says.
“You have very unfavourable tax conditions, you have a federal government that is not exactly friendly to cannabis, some people would describe as hostile.”
You can tell he’s heard these misgivings before. Mojela brushes them off, less concerned with the optics and thinking only of the potential economic growth the industry could bring. But it seems more personal for Met, like he’s had the conversation with himself many times before.
Even so, he’s bullish: “I hear very few negative comments about our activities and what we’re trying to do here, and the people I do have comments from are people who are a little bit ignorant or misguided – ‘you’re exporting the labour force, you’re destroying the village by bringing capitalism to them’. That’s just bogus, right?
“Everyone else is extremely positive. Many people want to come and visit and experience it and I encourage people to do that.”
If the Halo-Bophelo partnership get the next few years right, it has the potential to be transformative for both companies and a boon for Lesotho. Met goes as far to say as they could wind up being the largest employer in the small country.
“The reason I’m in Lesotho is to teach people everything we know about how to do business and how to succeed,” he says, grinning and rocking on his seat.
“One day we’ll be cast away and discarded – and that will be a great day.”