MARIJUANATION

BACKGROUND

In partnership with five of your friends, you have decided to set up a company, creatively named

MarijuaNation (Pty), to invest in commercial medicinal cannabis growing and processing in

Gauteng.

This enterprise has been inspired by the announcements by the Gauteng Provincial Government

(GPG) that it is looking for interested parties to submit business partnership proposals as part of

the GPG's new cannabis industrialisation plan. The GPG intends to support the cultivation,

processing and distribution of cannabis at an industrial scale in the province in order to "unlock

economic opportunities and job creation". It will support any companies that would like to invest

by:

(i) Providing part of the funding needed (up to 40%);

(ii) Offering leases on state-owned previous mining lands which needs to be rehabilitated, to

grow the cannabis;

(iii) In partnership with the Department of Agriculture, Forestry and Fisheries (DAFF), and

Department of Health (DoH) amend the existing legislation to allow for the sale of legal

cannabis;

(iv) Supporting them in their application to the South African Health Products Regulation

Authority (SAHPRA) for a cultivation licence (these are mandatory and are normally

granted for 5 years)

(v) Provide access to any proposed domestic and export markets that the investor may

identify;

(vi) Developing quality assurance and certification standards; and

(vii) Developing partnerships with universities and research institutions to help develop

commercially viable cannabis plants.

The companies must submit viable business plans, and be able to prove that they will create

economic opportunities and jobs through their activities.

The primary use of the cannabis grown in the province will be for medicinal purposes, and the

products must not be sold recreationally. While there are no regulations to guide the use of

cannabis for medicinal purposes, and there are no standards for the types of medicinal products

that are derived from cannabis, the GPG and DAFF are hopeful that these will be in place by the

end of the next year, 2023.

MarijuaNation has therefore decided to set up a pilot project to invest in growing, processing and

selling refined cannabis projects for medicinal purposes. In preparation you have already

identified 50 acres of suitable land that was previously used for mining in Gauteng and have

secured the lease on this land for one year.

SCOPE OF THE PROJECT

You have defined the scope of the project as follows:

(i) Project objectives:

To grow, harvest and process cannabis for medicinal purposes and thereafter to sell it to

customers in domestic and export markets

(ii) Project activities:

a. Prepare the land and plant quality cannabis plants from local and international

sources,

b. Harvest and process the cannabis to get tetrahydrocannabinol (THC), the refined

end product

c. Identify medicinal products containing THC that can be profitably marketed to

customers in domestic and export markets, including health beverages and herbal

products

d. Manufacture and sell the identified products in the target markets, with the help of

GPG

e. Write the outcomes of the above activities out as a case study and if the venture

proves profitable, apply for funding to expand the project.

(iii) Project duration:

The project may start immediately, and you estimate that:

a. Ground preparation will take one month,

b. The growing period for the plants will be 6 months,

c. Market research can take place concurrently with the growing of the plants, for six

months

d. Harvesting and production will take a further two months

e. Within three months from the end of production all stocks of the product you have

developed will be sold out.

(iv) Project deliverables:

a. Developed approved medicinal products containing THC

b. The profitable sale of all the products to customers to be identified

c. Proof of job creation or economic opportunities created amongst the local

community, and

d. A case study report to apply for further funding

REQUIRED

In order to provide you with a part funding the GPG has requested you to, amongst other

requirements, develop a risk management plan in which you should:

1. Identify and explain the top ten potential risks associated with this project, in your view. (40 marks)

2. Using a risk assessment matrix, analyse the identified risks. (30 marks)

3. Develop a risk response matrix to outline how you would deal with each of the risks. (30 marks)

Important:

Please highlight any assumptions you make in the development of the risk plan

As this is a relatively clear-cut project, there is no need to restate the project scope or

objectives in the write-up to the risk plan

[Total: 100 marks]