(Bloomberg) -- On a cedar-lined dusty track in the north of Morocco, visitors are greeted by a pungent whiff of cannabis and the loud tapping sound of workers busy extracting hashish.

It’s cashing in time in the village of Tamadit, tucked 4,000 feet high on the slopes of the Rif mountains. The narcotic pollen is beaten out of the sun-dried plant and turned into compact blocks of resin for a customer arriving that day. The dope will then be sold on domestically or shipped to buyers with deeper pockets in Europe a short hop across the Mediterranean Sea.

The historically restive region is the backbone of what makes Morocco the world’s biggest exporter of hashish. It’s also one the authorities largely turned a blind eye to over the years, not least because of the Rif’s rugged isolation. But now they want to make it legal and monetize it — that’s if they can persuade locals who have been involved in the business for generations.

With the global boom in using the drug for medical rather than recreational purposes, the government 400 kilometers (250 miles) away in Rabat pushed through legislation that allows an area almost nine times the size of Manhattan to grow marijuana for pharmaceutical and industrial processing rather than to extract resin for pot smokers.

But the first of many hurdles is to overcome opposition from the Rif farmers who are suspicious of politicians and their motives — and loyal to the kind of customer they say has sustained their villages for generations.

“The drug baron is the cornerstone of the community,” said Mohamed Bousemath, a 27-year-old farmer in Tamadit, a six-foot-high pile of dried cannabis plants neatly stacked in his tin-roofed house. “When the state was not shouldering its responsibility towards this region, the drug baron was taking care of us by buying the crop every year.”

Cannabis production and consumption has been illegal in Morocco since 1974, though the country was the only predominantly Muslim nation to back the removal of the drug from the UN’s list of dangerous substances two years ago.

Rif, meanwhile, has been a hotbed of unrest, most recently mass protests that started in October 2016 after the death of a fishmonger and were only quashed eight months later. A report last year by King Mohammed VI’s Economic, Social and Environment Council blamed the underground cannabis economy for stifling the region. It recommended legalizing the drug as part of an integrated strategy that would ultimately eradicate the farming of cannabis for hashish.

The governing coalition, led by parties aligned with the powerful monarchy, wants to move with the times and come good on that. It’s identified a fertile region for development as it tries to raise money for an increase in spending on health care and social welfare after the pandemic exposed the country’s vulnerabilities.

The area involved is 50,000 hectares, or 500 square kilometers (193 square miles) in three northern provinces. That’s 70% of the total coverage of cannabis crops across Morocco. Plots average half a hectare, providing sustenance for hundreds of thousands of people, according to the latest official data.

Bousemath and other farmers are concerned the legalization is going to harm their business by locating planting in plains that are better connected to the rest of the country. They also don’t like the scrutiny, especially when a chunk of their plantations are located in the wild or on land for which they don’t have title deeds.

“What about the number of authorities involved in this legalization process?” said Mohamed Mrabet, a cannabis farmer in his 70s in Issaguen, a town in the Ketama region adjacent to Rif. “It’s too much intrusion,” he said, keeping his hands warm under a wooly hat inside a café. “They want to control us.”

The government effort is focused on carrot rather than stick, said Mohamed El-Guerrouj, who heads the newly created state agency regulating the legal use of cannabis.

The legalization drive will boost a shrinking and meager share of cash farmers get from their cultivation and protect the environment, particularly water resources, he said. It would lift the region out of isolation by locating new jobs in what would become a national industry.

It’s an “extraordinary opportunity” for farmers, El-Guerrouj said at his near empty office in Rabat this month, adding that they are being asked to participate rather than being compelled. His agency is responsible for licensing farmers cooperatives and companies, regulating imports of cannabis inputs and seeds and deploying inspectors.

“This is a lucrative market so the farmer must get the bigger share of the profit and get rid of the middlemen,” he said “Like any economic system, there will be an ascending curve, we can’t hit the ceiling immediately. It’s going to come, little by little.”

The law is in place for the planting of legal cannabis from next spring, he said, but critics say the legislation — introduced last year — was rushed. There are no fresh projections for production, revenue or the number of farmers signing up. The Interior Ministry’s bill said the switch to legal cannabis would increase income from the business by around a third by 2028. 

The trade is also highly competitive, with family members in Rif often running up against each other, according to Khalid Mouna, a prominent researcher in Morocco’s cannabis economy. It will be hard to rally a majority of cannabis farmers into cooperatives that will produce legal cannabis plants, he said.

“The cannabis economy by definition is based on exploitation and domination of the drug barons and also based on strong individual competition between producers,” said Mouna. “We built our legalization on a logic of collective work which is not part of the Moroccan cannabis modus operandi. You are pushing them out of a comfort zone.”

Even if the government succeeds in getting farmers on board, it’s another thing to capture a significant share of the medical cannabis trade, according to Khalid Tinasti, a research associate at the Swiss-based Centre on Conflict, Development and Peacebuilding.

However dominant the country is in hashish — at one point, reports suggested Morocco supplied about 70% of the drug in Europe — it will face huge competition from the likes of Thailand, Uruguay and Rwanda, he said.

Income from cannabis farming in Morocco has also been declining after a glut was exacerbated by the Covid-19 pandemic. It was €325 million ($346 million) in 2020 versus a street value of 8.1 billion euros, according to the Interior Ministry’s most recent data. That’s down by a third since the early 2000s.

Prices are recovering, not least because of the knock-on effect of the legalization, said Adardak Charif, an activist and researcher from Al Hoceima, the Rif province where the mass protests took place. The price of raw and dried cannabis plant has risen more than 50% while hashish has doubled, he said.

“This legalization opens a new chapter — it’s not bad from a macro perspective,” said Charif. “But legalization as it is wont solve our chronic social and economic problems, development will. If the region develops, it won’t need neither legal nor illegal cannabis.”

Old habits die hard, though. In Issaguen, Mrabet took up cannabis farming from his ancestors in the 1960s. The town at the time was a haven for Western tourists and hippies seeking out the Moroccan strain of cannabis, known as Beldia, which was grown in the rocky terrain of the region. It was those visitors who taught Moroccan farmers how to extract the resin.

He reminisced fondly about those days. “Look at me: I don’t even have proper shoes now,” he said. “The only thing we have going for us here is cannabis and our proximity to Europe. That legalization is not for us: Businesses can’t even locate jobs here. Have you seen the state of the roads, the infrastructure?” 

About 40 miles away, Bousemath points to how things have not changed much around his village since he was born. He said pregnant women still face a two-hour road journey to reach the nearest hospital.

The region is reliant on a network of Mercedes 207 vans, imported as second hand mostly from Germany and the Netherlands. They are used for everything from ferrying hashish to delivering food and passengers, dominating traffic on the narrow and rough roads connecting Issaguen and Bousemath’s district to the rest of Morocco.

“There is nothing here,” said Bousemath. “The drug lord is more honest and more humane than those peddling fake humanitarianism.”


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