Asian forerunner – Thailand – legalized the use of medical cannabis in February 2019, opening the door for many other Asian countries to follow suit in decriminalizing the plant. This has, of course, had investors prick up their ears in anticipation of the possible investment opportunities on the continent.
Historically, Asian countries have enforced excessively strict punishment for possession, distribution, and consumption of cannabis in any of its forms. Most notably, the Philippines war on drugs and the plight of many foreign citizens who were incarcerated in Thai jails, highlight the past intolerance for the plant. However, with whisperings of Thai legislation softening their laws and ultimately legalizing cannabis, the attitudes of many other Asia localized countries have also begun to soften.
According to market research company Grand View Research, globally marijuana in its legalized form, including recreational usage, generated a staggering $13.8 billion (estimated) in 2018 alone. By 2025, this is expected to reach $66.3 billion.
After numerous studies over the years, cannabis was broken down into two components; CBD which is the non-hallucinogenic compound which is sold in various forms for administration, including oils, tinctures, and buds and THC which is the psychotropic property of the plant that has widely given cannabis a bad reputation. THC is, in fact, still illegal in most countries. However, some reports originating from Europe suggest that both CBD and THC are applied in various medicinal practices to treat a host of ailments.
Recently, countries that have legalized CBD, including Australia, Germany, and Israel, have paved the way for Asian countries to join the growing global community of medicinal cannabis legalization. With Bangkok and Seoul being the leaders in plant health care alternative therapies throughout 2018, Thailand eventually put their plans in place in February the following year. Not only did they legalize the use of medical cannabis but unveiled their impressive first legal cannabis greenhouse. It was, however, South Korea that won the legalization race by becoming the first East Asian country to legalize medical marijuana in November 2018. This was done with the specific goal in mind of alternative treatment options for sufferers of epilepsy and other severe chronic pain issues. Japan followed in November when she gave the go-ahead for clinical trials on Epidiolex, a CBD based oral tincture that is used in treating epileptic patients. Then, in late June 2019, the Health Minister of Malaysia issued a controversial statement stating that the legalization of medicinal cannabis would be a “game-changer”.
With the softening of these countries in mind, it must still be mentioned that most Asian countries are not on board with the legalization of Cannabis. Even with this in mind, reports from Prohibition Partners estimate that Asia’s cannabis market could be a $5.8 billion industry by 2024. And with an elderly population of 33.1% and 17.8% respectively, Japan and China seriously need to rethink their income earning strategies. By 2020, Japan alone will need to budget $2.7 trillion to support their elderly. This means that China and Japan have had no choice but to warm up to the idea of getting on board with the medical marijuana industry. China is heavily involved in growing nearly half of the world’s legal hemp. Hanma Investment Group was the first Chinese company to be permitted to extract CBD from its plants. The company currently exports 90% of its products. Opinions in China are slowly changing towards CBD, seeing the plant more as a medicinal alternative and less of a drug. Because of this, legalization is expected soon.
It’s not all sunshine and roses, though, according to financial analysts. There are still too many unanswered questions surrounding the legalization of CBD. Further to this, the industry is relatively new, which means business models are shaky at best. Ultimately, the acceptance of the use of cannabis in its medicinal capacity will be the make or break factor Asian markets. As long as the plant is easily accessible to its people, is of reasonable quality and is reasonably priced, the market should grow steadily.