Why Asia Is The Next Frontier For Big Cannabis

asian cannabis markets

Asia might not seem like a potential hotspot for cannabis businesses, but it’s getting there.

Big players in the cannabis industry are looking for areas to expand to; they’ve already tapped Europe and South America, and Asia is next. Prohibition Partners, a strategic consultancy firm specializing in market intelligence, released a report recently stating that the Asian MMJ market could be worth as much as $5.8 billion come 2024.

Their analysis is based on the premise that more major markets in the region would eventually legalize cannabis, and doing so could mean that the forecast can expand four times as much by 2027. The report, called the Asian Cannabis Report, says that Asia analyzes healthcare and data in 7 top markets including China, Thailand, South Korea, and India.

“A regulated legal cannabis market could be transformative to patients, farmers and economies across Asia. From a financial standpoint, as the world’s most populous region, the legalization of cannabis could encourage robust economic growth across the region, buoyed by both local and international demand,” says Prohibition Partners Managing Director Daragh Anglim.

“As demand for CBD rises internationally, China has a huge opportunity to capitalize on this emerging market and help to shift opinions in favor of the therapeutic effects of different cannabinoids, which could stimulate economic growth, jobs and taxes throughout the region.”

With almost 86 million people across the region consuming pot on an annual basis, and with the consumption of medical cannabis alone expected to grow quicker in Asia than in other regions, the report states that Asia can certainly achieve the $5.8 billion value by 2024 provided that other countries legalize it either recreationally or medically.

Focus On China

On May 4, The New York Times features an article called “China Cashes in on Cannabis Boom.”

“China has made your iPhone, your Nikes, and chances are, the lights on your Christmas tree. Now, it wants to grow your cannabis.” The article states that Yunnan, a province in southern China, as well as the northern province Heilongjiang, are “quietly leading a boom in cultivating cannabis to produce cannabidiol, or CBD, the nonintoxicating compound that has become a consumer health and beauty craze in the United States and beyond.”

However, the article notes that China is moving full steam ahead with CBD even if it hasn’t been legalized for consumption. After all, China is known for having some of the harshest drug penalties in the world.

The New York Times article also quoted Tan Xin, Hanma Investment Group chairman, who in 2017 became the first Chinese company to legally extract CBD in their Yunnan “restricted zone”. Their hemp is grown in Shanchong, a small town west of the Yunnan capital of Kunming. Tan says that there is “huge potential” for his business.

Asia Catches Eye Of Canadian Cannabis Firms

The most populous continent in the world has caught the eye of big players in the Canadian cannabis scene. But it’s only the beginning.

Canopy Growth Corporation is working on creating a team that will handle the increasing interest of the medical cannabis industries in many Asian countries including Malaysia and Thailand. Elsewhere in the region, Aurora Cannabis Inc. is considering Australia as their home base for operations.

“Selfishly speaking, I think I’m in the greatest location in the world at the moment because I think people’s mindsets are changing,” said Ben Quirin, Canopy Growth Australia and Asia Pacific’s regional managing director to BNN Bloomberg. Even if Asian nations have a worldwide reputation for harsh drug laws and they are highly unlikely to legalize recreational cannabis, the Prohibition Partners report states that there’s a possibility of it being embraced as long as more research supporting its efficacy comes out.

“The one message I really want to bring to regulators when we speak of government is that we’re not afraid of regulation,” said Quirin. “If people are going to try this product for the first time, let’s get them to find something that’s being regulated, tested, and safe.”

“It’s something we’re paying attention to,” said Michael Singer, Aurora Cannabis’ executive chairman, to BNN Bloomberg. “We’re leveraging our relationships currently so once that market opens up we’ll have the opportunity to enter that market as well.”