Financial services provider Fedgroup has added alternative asset cannabinoid hemp to its agricultural investment options, allowing investors to tap into a growing market expected to be worth $20 billion by 2028.
It says investors can invest in a hemp plant for R1 000 and earn an annual profit of between 12% and 14% over a three-year investment period. There are 9,100 units available on the company’s investment platform.
Hemp plants are harvested once a year between March and May, and investors can expect their returns around August, the company says.
Hemp contains less than 0.2% of tetrahydrocannabinol (THC), the substance primarily responsible for the psychoactive effects associated with cannabis and said to have medicinal properties. It is often used in health products.
“This investment will [help] farmers to take advantage of the significant economic opportunities this crop provides, but will also play a critical role in job creation and skills development,” said Warren Winchester, GM of ventures at Fedgroup.
Hemp joins six other alternative assets in Fedgroup’s impact farming portfolio, the others being solar panels, lettuce stacks, beehives, macadamia trees, blueberry bushes and morning glory trees.
The group says its decision to add hemp to its portfolio was informed by the country’s fast-growing CBD (cannabidiol) market as well as its export potential.
According to a Fedgroup statement, the global CBD market was valued at $4 billion in 2021 and is expected to reach $20 billion by 2028.
“South Africa is perfectly poised to take advantage of the international CBD market, not only for local production but also for export. The South African government is also active in promoting the growth of the industry.”