Asian Cannabis Market Tipped to Hit $US5.8 Billion in Value by 2024

According to a new report published by the world's leading market research and strategic consultancy firm, Prohibition Partners, the Asian medicinal cannabis market could be worth as much as $5.8 billion by 2025.

The Asian Cannabis Report—which is the first detailed study on the legal cannabis industry in Asia—found that if key legislation is introduced in the continent's major markets then this estimate could quadruple by 2027.

The study found that almost 86 million people consume cannabis across the region annually, and predicts that medicinal consumption alone will increase faster in Asia than other early-adopter nations.

China and Japan were identified as the two largest-value medicinal markets in Asia, and by 2024 are expected to be worth almost $4.4 billion and $800 million respectively. Together, both countries are expected to account for a whopping 90 percent of the estimated market share.

This is unsurprising, as China has already established itself as a globally-oriented hemp producing powerhouse—with a market worth an estimated $1.2 billion—and currently accounts for nearly half the world's supply of the plant.

South Korea also moved to allow access to cannabis based pharmaceutical products in 2018, and a Korean Cannabinoid Association has even emerged to advocate for further use.

Disclaimer: Past performance is not an indicator of future performance.

South East Asia Shows Promise

The push for legalisation is beginning to make headway in some of the regions' more conservative countries, and in February 2019 medicinal cannabis officially became legal in Thailand

The same month, Malaysia's health ministry announced that it will consider allowing the use of medicinal cannabis. The move was prompted by a public outcry in 2018 after a young Malaysian man was sentenced to death for illegally providing cannabis oil to his patients.

The subsequent backlash had a considerable effect on the Malaysian government—with the country now having pledged to abolish the death penalty—and kicked off a public discussion around cannabis law reform.

February also saw good news out of Singapore, when the government announced that it would allow the legal sale and usage of pharmaceutical-grade cannabinoid products.

Disclaimer: Past performance is not an indicator of future performance.

Thailand has even announced that is set to kick off state-sanctioned clinical trials on cannabis oil as a treatment for patients suffering from chemotherapy-induced nausea later this year.

However, things are more complicated in the Philippines. While President Rodrigo Duterte has continued to pursue his draconian violence-fuelled crackdown on drug use in the Philippines, the country is also currently considering a bill that would legalise medicinal marijuana.

Although the bill already managed to pass through the lower house of the Philippines Congress in February 2019, Duterte has now chosen to oppose its introduction, despite initially giving his support for the legislation.

Similarly, the report also praises Myanmar for its recent decision to support the adoption of "an evidence-based focus that addresses the needs of people and their health by reducing the negative effects of drug production, trafficking and use."

Unfortunately, critics have also pointed out that this phrasing in this statement appears to have largely been drawn from a 2018 press release by the UN Office on Drugs and Crime. Thus far, little progress appears to have been made in Myanmar when it comes to cannabis legalisation, and it is still uncertain how this situation will evolve in the future.

India vs China

India was found to have the highest rate of cannabis consumption in Asia, with an estimated 38 million users currently in the country.

So, it should be no surprise that the report found that India—which legalised hemp cultivation in 1985—is poised to challenge China's dominance of the global hemp industry.

While hemp is only legal in India for use in the textile industry, the market is thriving, particularly in the country's northern states of Uttar Pradesh and Uttarakhand. The report also noted that the cannabis plant itself is already partially legal India, as its' usage is permitted at certain religious festivals.

"Bhang [cannabis] is legal in India, and, owing to its integral role in spiritual practices, [criminalizing] the use of bhang would be almost impossible."

 – Prohibition Partners

However, the country still has a tough hill to climb if it wants to upend China's hegemony in the global hemp industry.

China is not only the world's largest hemp supplier; it is also a market leader in the importation of industrial hemp products such as hemp paper and textile materials.

Much of the hemp is produced in the Shandong, Heilongjiang, and Yunnan provinces, and legalisation appears to have been initially introduced at a provincial level by the Yunnan government a decade ago.

This was subsequently followed by a national law that was passed by the People's Congress in 2016 to regulate the industry.

Disclaimer: Past performance is not an indicator of future performance.

China's industrial hemp market was estimated to be worth approximately $1.1 billion in 2017, and this number is forecast to rise by 36 percent to $1.5 billion by as early as 2020.

China represents 309 of the 606 international cannabis-related patents that have currently been filed, and Chinese companies such as Yunnan Industrial Cannabis Sativa Co and Hemp Investment Group have confirmed that they have global expansion plans aimed at the CBD market. The country has also been investing in health-related cannabis research, and is targeting a number of conditions including Parkinson's, MS and cancer.

Although this may seem encouraging, it will still be some time before China considers the legalisation of recreational cannabis, as the country's laws are so strict that possession can being charged with possession can lead to the death penalty.

Looking Ahead to 2024

The Indian government is currently holding preliminary discussions about whether to legalise cannabis for medicinal use.

The conversation is also being driven by an Indian non-profit group known as the Great Legalisation Movement (GLM), who have harnessed social media and recruited ambassadors to campaign for meaningful legal reform.

Last year the Sri Lankan government also launched its first planation to produce cannabis for local medical use. Although the country is a late entrant to the game, it is already planning to export to the US market, and the new growing site is expected to generate 25 tonnes of cannabis per year.

Unfortunately, while significant forward progress has been made, the Asian cannabis market still has a long way to go to catch up with the rest of the world. Countries such as the United Arab Emirates, Qatar, Kuwait, and Bahrain all still enforce strict anti-drug laws, and Saudi Arabia even executed several drug smugglers in January 2019.

Although the Asian cannabis market is set to explode in value in the coming years, it's important to remember that the report stipulates that the industry will only reach $5.8 billion by 2024 "assuming that it is [legalized] in the countries profiled in this report within this timeframe."

A few years ago that scenario would have seemed impossible, but the encouraging news emerging from Asia show that it's clearly becoming a lot more likely.

Readers who are looking to learn more should check out the following interview, where the CEO and founder of The Green Fund, Mark Bernberg, offers further analysis of the Asian market and its relationship to the Australian cannabis sector.

Eastern Outlook – Mark Bernberg Discusses Asian Cannabis Market on Your Money Live

The world's leading market research firm, Prohibition Partners, published a report this week—entitled The Asian Cannabis Report—predicting that the Asian cannabis market will reach $5.8 billion in value by 2025. The study found that almost 86 million people consume cannabis across the region annually, and also suggested that the market's estimated value could more than […]

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Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.

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