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 quadruple over the next eight years.
China and Japan were found to be the two biggest medicinal markets in Asia, which are expected to be worth almost $4.4 billion and $800 million respectively by 2024. When combined the value of both countries will eventually account for up to 90 percent of the region's overall market.
The CEO and founder of The Green Fund, Mark Bernberg, recently appeared on Your Money Live to discuss the potential value of this rapidly expanding sector and its' relationship to the Australian cannabis space.
According to Bernberg, the cannabis industry is beginning to de-emphasise the practice of smoking the plant itself in favour of edibles and extracts for targeted medicinal use. This is being fuelled in-part by the introduction of synthetic and biosynthetic cannabis, which can isolate specific cannabinoids to deliver more effective treatment outcomes.
While there are several Australian companies with a focus on cannabis cultivation—such as the Cann Group—the real action is currently happening in synthetic cannabinoid research.
Australia already has a reputation as a world-class pharmaceutical exporter, which local companies will be able to leverage as an indicator of quality for wellness products such as edibles, extracts and topical creams.
Bernberg said that if this trend continues then Australia could be well-placed to position itself as a leader in the medicinal cannabis market, particularly if China allows for the importation of products containing CBD.
Last year the Australian medicinal cannabis industry was worth about $18 million, and this is predicted to grow to around $3 billion in nine years' time. A lot of the big players—especially from North America—have already taken a vested interest in Australia. They see it as a great opportunity."
– CEO and Founder of The Green Fund, Mark Bernberg
Not only is China one of the biggest economies in the world, the country also has a substantial aging population, which means it is likely to have a large patient base who would respond to cannabis-based treatment for issues such as inflammation, anxiety and chronic pain.
"If you look at one of the biggest states in the US—Florida—cannabis is still only medicinally legal. They also have one of the highest aged populations which has, by itself, made it one of the most valuable medicinal markets."
"A lot of the medicinal treatment now is for inflammation, pain, anxiety, so a huge trend amongst the older population is to get on board with medicinal cannabis," he said.
Nutraceutical and wellness products can currently be sold over the counter—unlike pharmaceutic-grade medicine that require a prescription—which Bernberg describes as a huge opportunity for Australia, because the country has "great climatic conditions to grow hemp in large scale".
However, much of this is still contingent on the eventual legalisation of medicinal cannabis in China, which has left many people wondering if the doors to the region are still closed.
"The doors are closed at the moment, but they are definitely opening. China produces almost half the world's hemp. There are 600 registered patents across cannabis; China holds 300 of those."
"There is a huge movement now to have a conversation around medicinal cannabis, and China has actually opened its doors to Canadian, US, and Israeli companies to perform medicinal research in the country. So, the ball is slowly starting to roll," Bernberg said.
And, things do seem to be improving. South Korea and Thailand—which still has the death penalty for drug offences—both voted to legalise medicinal cannabis last year, and in February 2019 Singapore announced that it would allow the legal sale of cannabinoid products.
The same month Malaysia's health ministry also made a public pledge to consider allowing the use of medicinal cannabis, and Sri Lanka even recently launched its first legal cannabis plantation.
Although it may still be some time before China considers the possibility of legalisation, at this point it seems clear that "there is a changing attitude in Asia".
"Even if we said five years [until legalisation] it gives Australian companies a really good runway from now to produce globally leading wellness drugs in the CBD industry," Bernberg said.