From widespread use to prohibition – Asian countries have been heavily influenced by the international community. Cannabis was legalized and used in traditional medicine in most countries until the 1930s. The United States played an important role in influencing the cannabis industry with its bans in the 1960s and 1970s, but as US attitudes have now changed, Asia needs to catch up or risk getting out of step with the international community.
Protecting intellectual property rights – patenting new hybrids is seen as a potential business practice in Western countries, but in Asia it is largely banned. While this may not be the case for developed cannabis markets, protecting the plant in Asia is key to prevent neo-colonialism in the industry.
There is a more open attitude towards legalization – some Asian countries have traditionally held a zero-tolerance perspective on cannabis use. However, under the guidance of the United Nations, countries like Myanmar are increasingly closing the gap with countries like New Zealand in viewing cannabis use as more of a public health issue than a problem that requires the involvement of the justice system. This softening of attitudes could make Asia more open to the legalization of medical cannabis in the long term.
Some new laws could open up a new economy for Asia – The number of medical cannabis uses is growing globally and at the beginning of 2019, WHO suggested that cannabis should be rescheduled under international law.
Importance of Hemp – China is the world’s largest hemp producer and its crops account for almost half of the global legal hemp market. Growing hemp is also considered as a legal activity in India. Fearing about nuclear toxicity as a result of the 2011 Fukushima nuclear reactor accident in Japan, South Korea became interested in hemp seeds as an alternative to fish protein after the people of this country became more careful in eating fish. Not talking about the medicinal or recreational cannabis market, hemp could be an area where Asia could lead the world in the short term.
Patent Protection – Huge potential for a wide range of businesses and investors in Asia in the fields of patent protection. According to data from the World Intellectual Property Organization (WIPO), China currently holds 309 out of 606 international patents related to cannabis, including methods of administration and storage of the substance.
Cannabis Legalization in Asia
Medical cannabis has become very popular in many Western countries, however, it is still “hidden” by stigma in many Asian countries. Any act of consuming or trading cannabis is usually punished heavily.
Even in Singapore, possession or consumption of cannabis can be punished up to 10 years in prison with a fine of up to 20,000 USD. Possession or consumption of quantities of cannabis greater than 500 grams can lead to the death penalty – this is in stark contrast to the United States and Canada, where cannabis is legalized in many states, and across the country in Canada.
Thailand has a long history of cannabis applications, first being known by migrants and traders from India, so the term “ganja” used for cannabis is the same in both countries. Thailand used cannabis to make medicine for centuries until it was criminalized in 1934 under the Cannabis Act.
As time goes by, the world gradually changes. Thailand, the 11th most populous country in Asia, has moved up to the top of the rankings. Often seen as a pioneer in the group, Thailand became the first country in Asia to legalize cannabis for medical use in 2019. Although there are still signs of crime related to recreational cannabis, Thailand’s government still encourages its farming community to continue cultivating and urges hospitals to support its use as a treatment. Thailand’s blooming cannabis industry is expected to grow by 660 million USD by 2024. Currently, Thailand only allows possession or sale of cannabis with approval and necessary legal certifications.
Same as Thailand, cannabis was first brought into Singapore by immigrants from India. Since 1970, Singapore has maintained a strict approach to cannabis and a zero-tolerance policy on drugs. However, in 2018, Singapore announced a revolutionary bio-based economy, worth around 25 million SGD (~17.9 million USD), which includes research and development of new technologies. compounds derived from cannabis. Even so, the possession and use of cannabis in Singapore is still heavily punished.
Israel is one of the more open-minded countries when it comes to cannabis use in Asia and other parts of the world. In fact, the legalization of medical cannabis has been going on here for a long time, since the 1990s. In June 2020, the new law allowed possession of up to 50 grams of cannabis, making Israel became one of the first countries in Asia to legalize cannabis.
In ancient India, cannabis was considered one of the five most sacred plants, playing an important role in many religious ceremonies for millennia. However, today it is still on the national banned list, except for medical and research purposes and used by government-licensed facilities. However, with the growing popularity of cannabis, India is approaching new winds in this industry.
Many experts in this field have predicted that many other Asian countries will soon follow Thailand’s path and start legalizing this plant. For example, South Korea also eased the law and allowed medical cannabis with non-hallucinogenic dosages in 2019. However, widespread and easy acceptance of medical cannabis use will need more time as there are extremely strict regulations with the licensing process.
What about other Asian countries? It’s just a matter of time. According to THC Global Group, it negotiated with the Malaysian government in 2019 and moved to penetrate more markets for the line of pharmaceutical cannabis. Top officials in Malaysia have also said that they will soon legalize the possession of small quantities of cannabis, but have not yet announced a date. Despite the recent fierce drug war, the Philippines has also proposed a bill that would allow the medical use of cannabis prescribed by qualified doctors.
Demand for cannabis in Asia – is it culturally acceptable?
Putting aside regulations, many also question consumer needs in the context of this plant stigma. It’s sad to say that this topic is still highly taboo and people who use cannabis are often viewed negatively. This view is intimately linked to their prevailing religion and culture.
With the growing use of social media and exposure to Western culture, teenagers are being exposed to a different story about cannabis. Combined with an aging population and growing demand for healthcare, Asia is sure to be the future bright spot in this industry. According to Prohibition Partners, a consulting firm on the cannabis industry, the medical and medicinal cannabis market in Asia could reach 5.8 billion USD by 2024.
“In Western markets, recreational cannabis is believed to be more profitable than medical marijuana in these market reports, but in Asia the opposite may be true. Japan currently has the oldest population at 33.1% and this could lead to unprecedented growth in long-term healthcare costs.”
What about businesses in the cannabis industry?
Despite difficulties, more and more businesses in Asia are ambitious with CBD and the industry and are waiting for the right time to enter the market.
Altum is a regional importer, distributor and marketer of cannabinoid products, with headquarters in Hong Kong and Perth. They recently opened their first store with CBD concept right near the heart of Hong Kong. This store is called “Found”. They’ve even opened a cafe with a range of calming products on their menu, ranging from tea to baked ones.
Craft Pot, a Thailand-based startup, specializes in the creation of reusable cloth pots aimed at the home grower market. The founder of Craft Pot said: “Although we have not been able to advertise our products to home growers because home growing is not yet legal in Thailand. However, we are trying to perfect our product to prepare for a flourishing future to come.”
That moment may come sooner than we expect. Thailand is ramping up efforts to widely legalize medical cannabis to soon allow all growers to grow up to 6 cannabis plants at home and resell them to the government for medical purposes.
China is expected to dominate the hemp-derived CBD market by 2024. Domestic and foreign investors and producers have been positioning their businesses to capitalize on the burgeoning cannabis industry of the country and the expectation of liberalization of policies and attitudes towards cannabis will also be remained in this country.
China is also investigating the potential of high-CBD hemp varieties. Yunnan Academy of Agricultural Sciences has been promoting the cultivation of medicinal hemp and has developed a series of new varieties with the aim of maximizing CBD yield and content. More and more farmers are cultivating hemp for CBD extraction, and the number of varieties with high CBD content continues to increase, showing that China is highly interested in this field.
Some of the most active domestic and foreign enterprises in this field in China include:
- Yunnan Industrial Cannabis Sativa Co. – produce functional foods to improve the immune system
- Zhang Hongq – currently researching a cure for peptic ulcer disease
- Dongguan Deheng Beverage & Food Co., Ltd – produce beverages containing plant protein
- Harbin Pharmaceutical Co., Ltd – produce beverages that support digestive function
- Cannaclear and Hanyi Biotechnology (Beijing) Co., Ltd – produce skincare products to treat acnes
- Yunnan Hanmusen Ltd – a biotech company located in Yunnan province, specializing in the production of CBD fibers and extracts
- Beijing Hanyi Biotech Ltd works closely with government agencies and research institutions in the development of CBD products. Their first CBD product was an energy drink, called Sutiwa. The company plans to develop more foods containing CBD.
Although medical cannabis has begun to gain more acceptance in some countries such as Thailand, South Korea and Israel, the possession of this substance still carries the risk of a death sentence in Malaysia, Singapore, and China and heavily punishments in other countries. The legal cannabis market is predicted to reach 73.6 billion USD by the end of 2027, however, it still depends on the reception attitude and vision of many countries in the region. Besides, CBD will be a potential and breakthrough product in the coming future in this area.
References: Prohibition Partners
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