Innovation and Technology in Medicinal Cannabis and Hemp Value Chains: Opportunities and Perception Challenges for SME Development in Botswana

Abstract

Botswana has not yet begun the process of legalizing medicinal cannabis and industrial hemp production, but it has the potential to do so which would create opportunities while also posing significant regulatory, financial, and technological challenges. As of now, there is no formal market and all the current activities are conducted through informal structures, including traditional societies such as healers, Rastafari communities, and unregistered trading groups. Lack of regulatory frameworks and formally established market structures pose a barrier to SMEs and this calls for technological advancements to enable formalization and inclusive participation in the economy. This study aims to determine how the application of emerging technologies such as AI smart farming and blockchain technology in the supply chain can help in the growth of the industry while at the same time addressing issues of regulation and perception. A more detailed economic impact analysis has been incorporated to provide insights into potential revenue generation and job creation in Botswana. A mixed methods approach is used in this study where structured surveys are used in conjunction with multiple linear regression analysis to assess the SMEs’ market entry potential. The results of the study show that legal framework, technology use, public’s perception, and funding availability are important determinants of the SMEs’ participation in this industry. Comparison of case studies of South Africa, Lesotho, and Ghana offers lessons on policy models that Botswana should adopt in its industry framework. These findings shed light on the importance of having well-defined policy regulations, SME and startup funding opportunities, and technological tools to encourage the growth of the industry. The study aims to add to the existing literature on entrepreneurship, digital transformation, and economic diversification in Africa and offers a framework for Botswana to build a sustainable, technology-enabled medicinal cannabis and hemp industry.