Beyond the smoke of marijuana George Wajackoyah math not adding up

Roots Party leader, Prof. George Wajackoyah, is taken through bhang ranches as he make a tour in the US on July 15, 2022. [Courtesy]

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

And one of the key solutions, they insist, is to legalise the growing of marijuana for commercial and medical purposes.

Kenya can repay its nearly Sh9 trillion debt in 12 to 15 months using the proceeds of marijuana

The country’s public debt stood at Sh8.47 trillion by end of April. Prof Wajackoyah says this can be paid off within a year if, for instance, the entire Nyeri County is put under commercial marijuana.

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

Prof Wajackoya says that marijuana matures in four to six months, meaning it is possible to have two harvest seasons in a year.

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

First, Prof 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 government for debt payment.

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

Countries, where marijuana has been legalised, have not reported such outsized returns despite many allowing 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 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 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 percent wholesale and retail excise tax on marijuana. Recreational marijuana is exempted from general sales tax.

Prof Wajackoyah is yet to disclose the level of taxation that would generate Sh9 trillion for government while also pumping money in 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 that of 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 marijuana production and sales being more than what US and Africa is raising currently and 74 percent 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.

Canada last year (2021) alone got US$487 billion (Sh57.7 trillion) out of marijuana

Mr Wajackoya stated 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. 

If the entire Nyeri County is put under marijuana 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.