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Asian Medical Marijuana Market Loosens Restrictions

SubverseAug 6, 2019, 10:58:23 PM

By Tarik Johnson

The global legal marijuana market was estimated to be worth $13.8 billion last year and the market size is expected to reach $66.3 billion by the end of 2025, according to a new report by Grand View Research. Part of this share will be held by Asian countries that have started to relax laws against medical use of marijuana. In December 2018, Thailand passed a law allowing the use of medical marijuana. Now, the Malaysian government is in talks with Australian firm THC Global Group Limited about creating a path for developing legislation for medicinal marijuana. In South Korea, the first East Asia country to pass medical marijuana legislation, select patients are now eligible to receive pre-approved marijuana based drugs like Epidiolex, Sativex, Cesamet, and Marinol.

Prohibition Partners, which calls itself the foremost source of independent data, intelligence, and strategy for the marijuana industry, estimated that Asia’s medicinal marijuana market could be worth $5.8 billion by 2024. “In Western markets, recreational marijuana is expected to outperform medicinal marijuana in market forecasts, but in Asia the opposite is likely to be true,” the firm said.

China, which has some of the strictest drug enforcement policies in the world, has actually cultivated marijuana for thousands of years for use in textiles, oils, and traditional medicine. In China the hemp industry is extremely lucrative, with farmers earning 10,000 yuan ($1,500) per hectare. Authorities in Heilongjiang turned a blind eye to its production before legalising and regulating it last year. Another major growing area is in Yunnan province where the plant’s production has been regulated since 2003. There are no official figures for the amount China produces each year, but plantations are flourishing for commercial and illicit markets. This growth has been made possible in part by government-funded scientists who study the plant’s military uses, including as medication and fabric for uniforms. Together, these areas account for about half of the world’s legal commercial cropland under hemp marijuana cultivation, according to China’s National Bureau of Statistics.

On the other hand, China has recently called the legalization of marijuana in Canada and parts of the US a “new threat to China.” At a press conference in Beijing Monday, Liu Yuejin, deputy director of the China National Narcotics Control Commission, said that the number of marijuana users in China had grown by more than 25% in 2018, rising to about 24,000 people. According to Liu, most of the suspects connected to the seized parcels were foreign students or students who had come home after working abroad, and most of the drugs had been transported through international express delivery. Liu did not specify how many of the packages came from North America.

Experts familiar with Asia told CNBC countries in the region are not likely to legalize the plant for recreational use anytime soon and that there are challenges ahead for medicinal use. Notably, the cost of building the infrastructure for production and distribution will be high and it may take a while before there’s a full embrace of the product. In Thailand, marijuana is currently listed as a Class-5 narcotic. This means possession, cultivation and growing can be punished with a maximum sentence of 15 years in prison. China, South Korea and Japan last month warned citizens visiting Canada to avoid marijuana. Singapore’s Central Narcotics Bureau reiterated its tough stance on the recreational use of marijuana, possession or consumption can result in an S$20,000 fine (US$14,500), caning or even a 10-year prison sentence. The death penalty remains in effect for trafficking more than 500 grams. Any citizens or permanent residents found to have “abused controlled drugs overseas” would be treated as though they had done so in Singapore.

Asian nations might be moving towards legalization of marijuana as the economic incentives become evermore attractive, but they will still need to contend with conservative social attitudes towards recreational use of marijuana and the lack of consensus among scientists on the benefits of using it medically.