Cannabis in Nigeria: Risk, reform, and revenue

Cannabis remains one of the most stigmatized substances globally.

It is often associated with mental health disorders, addictions, criminal activity, and social delinquency.

These associations, whether factual or exaggerated, have driven decades of prohibition across countries like Nigeria.

But as scientific research advances and global markets evolve, a new narrative is emerging—one that challenges the deeply ingrained perception of cannabis as purely a societal threat.

This article does not pretend to ignore the potential dangers of cannabis misuse or overuse. It, however, makes a nuanced argument: ‘Could Nigeria, plagued by persistent budget deficits and faltering oil revenues, rethink its stance?’  

The global legal marijuana market, valued at $30billion in 2024, is projected to soar to $212billion by 2035, growing at a staggering CAGR of 19.41%. Thus, could Nigeria, purportedly the world’s third-largest consumer of cannabis, tap into this momentum to plug budgetary gaps?

More Than Just a High: Medical and Industrial Use Cases 

Modern cannabis has far evolved from its recreational stereotype. It is increasingly being used for:

• Chronic pain management as a safer alternative to opioids
• Mental disorders, including anxiety and PTSD
• Cancer care, helping to reduce nausea and stimulate appetite
• Treatment of epilepsy, particularly in pediatric cases
• Therapeutic oils, edibles, and topical creams for inflammatory diseases

Pharmaceutical companies worldwide are now incorporating cannabinoids into drug formulations, creating a whole new class of medical therapies that could benefit Nigeria’s growing population of chronic pain, mental health, and cancer patients, but to mention a few.

Furthermore, industrial applications of hemp — a cannabis variant — include, but are not limited to: textiles, biodegradable plastics, building materials, and even biofuel. These secondary sectors could unlock additional economic value and employment opportunities, particularly in Nigeria’s less affluent rural areas.

Global Lessons: Legalization and Revenue Streams 

Across North America and parts of Europe, cannabis legalization has brought billions in government revenue. Cannabis is legalized in 24 of the 50 US states. Since 2014, Cannabis has generated more than $20 billion in tax revenue for these American states, with $4billion collected in 2023 alone.

These revenues have been used to fund:

• Public education
• Substance abuse treatment
• Infrastructure projects
• Social equity initiatives
• Law enforcement training, to mention a few.

Canada and Germany are also leading examples, showcasing the stabilizing effect of regulation, both economically and socially. In Colorado and California, cannabis taxes also support housing initiatives, hospitals, and public health campaigns, making Cannabis regulation and taxation a multi-dimensional fiscal tool, particularly in trying economic times.

Nigeria: A Quiet Giant in Cannabis Production 

Though cannabis is still outlawed in Nigeria, it is grown and traded illegally on a massive scale. Estimates suggest that over 1.1 million tons of cannabis are produced, imported, or trafficked annually in Nigeria. Yet, a quarter or less is ever seized.

Despite the tireless efforts of agencies like NDLEA, EFCC, and even the Nigerian Police, enforcement remains porous. Bribery and corruption allow some deep–pocketed players to operate unchecked, diverting potential public revenue into private pockets.

Nigeria also ranks as one of the top global consumers, with over 5% of the population (≥11million) reportedly using cannabis in different shapes or forms. The country’s prominence in the cannabis trade surged during the economic chaos of the 1980s ‘SAP’ reform era. Reduced public spending, rising poverty, and weakening state oversight made cannabis farming an economic lifeline for many, especially farmers.

Budget Deficits and Missed Opportunities 

According to research by Statista.com, Nigeria’s budgetary deficit is projected to worsen by -1.3% between 2024 and 2030. Oil revenue instability, production shortfalls, and global overproduction (especially by the U.S. and OPEC+) continue to undercut Nigeria’s national budget. With GDP growth stagnating near 3% of late, alternative and more creative revenue channels seem desperately needed.

Burning illegal cannabis farms, as currently practiced by Nigerian law enforcement, only worsens environmental degradation and contributes to further ozone depletion, also destroying arable land, polluting the atmosphere with toxic smoke, and further alienating farmers from meaningful economic participation in the Nigerian agricultural renaissance ecosystem. Meanwhile, the illegal market still thrives, regardless of the many seizures and arrests.

The Economics of Legalization: A $5 Million Yearly Opportunity 

At a supposed street value of N15,000/kilogram (~$10), Nigeria’s illegal cannabis trade is worth over $11 billion annually (based on 1.1mil tons). If just a fraction of this market were legalized and taxed at 30%, the Nigerian government could thus conservatively earn $5 million yearly in direct tax revenues alone.

Beyond taxation, legalization could generate income through:

• Registered Growers: Licensed under monitored regional associations with annual governmental dues and production quotas.
• Pharmaceutical Companies: Create a new supply chain for treating cancer (~2% population prevalence), osteoarthritis (~21%), mental illness (~25%), etc.
• Medical Tourism: CBD–based treatments could help Nigeria recapture a portion of the +$1billion lost annually to foreign medical travel.
• Entertainment Venues: Registration of willing nightclubs and recreational centers would formalize the already existing demand in such centers.
• Tourism Boost: Controlled legalization could mirror the success and forex attraction seen in cannabis-friendly destinations abroad.
• Export Opportunities: Nigeria could, under international standards, export cannabis-derived products to medical markets abroad, further strengthening forex reserves and bolstering our agro–export sector.

Guardrails: Implementing Smart Controls 

To avoid societal risks, however, Nigeria would certainly need an ironclad framework:

• Prohibition in schools and all educational institutions
• Registered & Regulated growth, sales, or use in residential areas
• Bans on use in public spaces, streets, and around minors
• Restriction from hospital premises and around nursing mothers
• Enforcement of strict production quotas and geographical growing zones
• Mandatory product testing and traceability to prevent abuse and contamination

These measures, innocuous as they might seem, would no doubt ensure safety while allowing the economic and therapeutic benefits of legalization to flourish, responsibly.

A Modest Step with Meaningful Impact 

I do not feign to claim cannabis legalization is a silver bullet for Nigeria’s economic challenges. But in a country struggling with persistent fiscal deficits, a weakening Naira, and faltering oil exports, even $5million a year in new, traceable revenue would most certainly go a long way in the long run.

Moreover, a structured legalization model would re–channel a shadow economy into a regulated framework, improving transparency, job creation, and community welfare.

With sound regulation and community reinvestment, cannabis could be transformed from a liability into a sustainable asset — not only economically, but also socially and environmentally.

The question, then, is not whether Nigeria can legalize cannabis. The question is: Can we afford not to?

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