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Army busts medical cannabis smuggling racket

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…53 bags seized before reaching SA destination.

Bereng Mpaki

THE Lesotho Defence Force (LDF) says it recently busted a medical cannabis smuggling operation by a licensed local producer.

An officer in the LDF public affairs office, Lance Corporal Pule Maseela, said they intercepted and recovered 53 bags of medical cannabis destined for South Africa via Butha-Buthe.

Lance Corporal Maseela said preliminary investigations by the military intelligence (MI) showed that the cannabis had originated from one of the licensed local producers. He said the investigations pointed to the likelihood of tax avoidance by cannabis producers as the reason for smuggling medical cannabis.

“Members of the 11 Infantry Battalion at the Phoku army post in Butha-Buthe on 13 January (2021) intercepted 53 bags of medical cannabis as they were being smuggled to South Africa,” Lance Corporal Maseela said in a statement.

“The cannabis was from one of the local production companies. The LDF’s military intelligence (MI) had received a tip-off about the planned illegal exportation of the cannabis to a South African farmer along the national boundary in Butha-Buthe.

“The army also managed to apprehend a 23-year old male suspect when he was about to hand over the cannabis to a South African man who owns a farm on the other side of the boundary near the Mohakare River.

“The MI’s preliminary investigations have established that cannabis smuggling is done by the producers to avoid paying tax.”

However, the Sunday Express also understands that some cannabis being grown purportedly for medicinal purposes is in fact being smuggled to South Africa and being sold on the lucrative black market for dagga for recreational use.

Lance Corporal Maseela said Captain Boiketsiso Fonane, the army officer who commanded the operation to intercept the cannabis, acted after receiving a tip off from the MI.

He said in the aftermath of the successful intercept and seize operation, Captain Fonane had been inundated with calls from an anonymous individual offering him a M150 000 bribe to facilitate the release of the contraband.

Another LDF officer, Captain Sakeng Lekola, told this publication the matter has since been handed over to the police to get to the bottom of the smuggling scourge which threatens to scupper Lesotho’s hopes of realising economic growth through the production of the lucrative cannabis crop.

Police spokesperson Senior Superintendent Mpiti Mopeli yesterday asked for more time to consult before he could comment on the matter. He had not commented on the issue at the time of going to print last night.

Pheello Mphana, the Lesotho Revenue Authority (LRA) ’s public relations manager said they had heard about the smuggling operation which had been foiled by the army.

He said although it was difficult to ascertain the nature of the losses, the smuggling of any product was bound to reduce the country’s tax earnings since contraband was never declared for tax purposes.

The smuggling racket is the latest in the series of problems dodging the medical cannabis industry which was touted as a panacea to Lesotho’s economic woes when the country legalised the production of cannabis for medical purposes in 2017.

As the first African country to legalise the growing of medical cannabis, it appeared that Lesotho was on course to reap the rewards. But the country still has a long way to ensure the viability of the industry in light of revelations by the former Health Minister Nkaku Kabi that only four out of 140 licensees had actually gone into production last year.

At the time, Mr Kabi said there were locals who got licences for free in the 2017/18 financial year but they failed to begin production. He said others had even failed to pay the M350 000 licence renewal fees.

“People have complained that cannabis licences should not be given to foreigners but should instead be given to the poor locals.

“However, it is not possible (to give licences to poor locals) because it is all about the capacity to utilise the licences. You must have the capacity to set up production facilities that cost millions of maloti. If I am unable to afford such a facility, then I must be willing to go to the bank to borrow some money or be willing to be employed by those who can afford it. We should not blackmail investors by complaining that they are being favoured when in fact we know that we cannot afford to utilise the licences,” said Mr Kabi who is now Water minister.

The forthright minister also warned that unless licensees began operations, Lesotho would lose out to other African countries like Zimbabwe, Zambia and Malawi who had also joined the “cannabis craze”.

Apart from the failure by most licensees to start operations, the industry has also been blighted by the outbreak of the Covid-19 pandemic in 2020 which slowed down business and prevented companies from raising capital on the international markets to fund their operations.

Last March, leading local medical cannabis producer MG Health, formerly known as Medigrow Lesotho, retrenched 72 workers citing cashflow challenges due to the outbreak of the Covid-19 pandemic.

The company said it was unable to secure investment due to the pandemic which has slowed down business and caused significant declines in stock markets around the world.

The retrenchment of the 72 workers represented a huge reduction of the company’s workforce considering that another 24 workers were fired for going on strike in September 2019. The country now only has 271 workers. This means that the biggest player in the sector has now lost about a third of its original workforce.

The beleaguered firm is also locked in a dispute with Marakabei villagers who are accusing it of paying them as little as M84 per month each for land the company leased to set up its production facilities.

Villagers employed by the company allege MG Health had reneged on promises to pay them at least M4000 each per month.

The locals say the below market compensation rates for their land and the woefully inadequate wages have left them worse off than they were when they used their land to grow their own crops.

MG Health acquired about 66 land parcels from individual landholders to set up its multi-million investment in the Marakabei area. The leases are for 20 years.

In exchange for leasing their land to the company, the landholders get an annual compensation depending on the size of their plots. However, the villagers who initially agreed to the compensation rates have performed an about-turn and are now claiming that the company pays them M0, 82 per square metre of land and this is not enough.

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