Is Wajackoyah too high on Cannabis math?

Roots Party presidential aspirant George Wajackoyah and his running mate Justina Wamae say the root cause of Kenya’s problems is corruption and debt.

And one of the key solutions, they say, is to legalise the growing of Cannabis Sativa for commercial and medical purposes. 

They claim Kenya can clear Sh9 trillion debt in 12 to 15 months using proceeds from the plant. But can Cannabis proceeds get this high?

Claim 1: Kenya can repay Sh9 trillion debt in a year using marijuana sales

Kenya’s public debt stood at Sh8.47 trillion by the end of April 2022. Roots Party presidential candidate George Wajackoyah says it can be cleared within a year if, for instance, the entire Nyeri county is put under commercial marijuana crop.

Nyeri County is about 583,415 acres. Wajackoya says a single harvest would fetch $45 billion (Sh5.3 trillion). That means an acre of marijuana can earn Sh9.08 million.

Wajackoya adds that marijuana matures within four to six months, meaning it can be harvested twice annually. 

That would amount to Sh10.6 trillion in a year — enough to clear the Sh8.47 trillion debt.

First, Wajackoyah assumes that there is no cost tied to that production. He is silent on how much farmers would get and how much would reach the government for debt payment. 

However, his deputy, Ms Justina Wamae, said during Tuesday's deputy presidential candidates debate that 100,000 young people will be targeted in a year, each earning Sh2.8 million. 

Countries, where cannabis has been legalised, have not reported such outsized returns despite many allowing its medicinal and recreational consumption.

In Colorado, which was the first US state to legalise medical and retail marijuana, the collective sales for eight years and five months (between January 2014 and May 2022) was $45.86 billion (Sh5.4 trillion)— almost the same as what Prof Wajackoyah wants to get in under six months.

In terms of tax revenue, Colorado has only earned $9.2 billion or Sh1.09 trillion in that period, according to data published by the Colorado Department of Revenue.

In 2021, Colorado’s sales revenue from Marijuana was $12.2 billion or Sh1.45 trillion. From this, tax revenue was $2.02 billion or Sh239 billion. 

Colorado has a 15 per cent wholesale and retail excise tax on marijuana. Recreational marijuana is exempted from general sales tax.

 Wajackoyah is yet to disclose the level of taxation that would generate Sh9 trillion for the government while also pumping money into the pockets of farmers.

The value of Africa’s legal cannabis market could be at least $7.1 billion (Sh841 billion) across nine key African countries by 2023, according to the African Cannabis Report from industry analysts Prohibition Partners. 

The Prohibition Partners report puts the global sales of marijuana, including medical and recreational, at $37.4 billion (Sh4.43 trillion) and projects that it could hit $102 billion (Sh12.1 billion) by 2026.

The multiple reports on actual sales and projected sales indicate that raising Sh9 trillion in a year could mean Kenya’s Cannabis production and sales being more than what the US and Africa are raising currently and 74 per cent of what the world is expected to earn from the plant in 2026. 

We, therefore, rate Prof Wajackoya’s math on marijuana revenue as incorrect and based on exaggerated figures. 

Claim 2. Last year (2021) alone Canada earned US$487 billion (Sh57.7 trillion) from marijuana

Wajackoya said this in a recent TV interview. Data from Statistics Canada, which provides monthly cannabis retail trade sales by province and territory, says otherwise.

According to the data, sales amounted to CA$3.835 billion or Sh352.8 billion with the best month being December. 

According to a Deloitte Canada report made public in February 2022, since Canada legalised recreational cannabis in 2018, the industry has contributed $43.5 billion or Sh5.16 trillion to the country’s GDP.

We, therefore, rate Prof Wajackoyah’s claim as incorrect. 

Claim 3: If the entire Nyeri County is put under Cannabis cultivation, residents will earn Sh4.6 trillion per harvest. 

That’s Sh9.2 trillion in a year given that Prof Wajackoyah plans two harvests a year. 

In the US, 37 states and Washington DC have enacted laws legalising medical marijuana. About 18 states and Washington DC have also legalised marijuana for recreational purposes.

Yet, legal sales of marijuana are expected to top $33 billion (Sh3.9 trillion) by the end of 2022, according to a study by MJBiz— a leading business-to-business cannabis industry resource.

The estimated medicinal cannabis market value for Africa by 2023 is just $0.8 billion (Sh94 billion), according to African Cannabis Report from Prohibition Partners. 

Yet, medicinal cannabis is the target of Prof Wajackoyah. His running mate, Ms Wamae, emphasises this. 

It will be a high mountain for Prof Wajackoyah to climb and achieve this marijuana dream even if he collects everything from the farmers.

We rate this claim as exaggerated.