Thailand has legalised the use of medical marijuana. What opportunities does it open up for cannabis startups in the region?
Countries around the world are beginning to change how they look at marijuana and cannabis more broadly. After a decades-long War on Drugs, many countries are throwing in the towel on fighting weed and its derivative products. Canada and Uruguay have both made recreational marijuana legal, and many states in the United States have pushed for recreational marijuana as well. Similarly, most countries are beginning to acknowledge that cannabis has some immensely beneficial medical properties.
Asia has long opposed legal cannabis, with Rodrigo Duterte, the President of the Philippines, championing an aggressive War on Drugs executing people for possessing marijuana. However, the tides are beginning to change. Thailand became the first country in Southeast Asia to legalise medical marijuana and Singapore is also exploring the path. South Korea also legalised medical marijuana, becoming the first East Asian country to do so.
Medical marijuana is a US$55.5 billion per year industry and many countries are realising that turning their back on it is costing themselves lucrative opportunities. As entrepreneurs begin to explore how to make the most of these new-found business opportunities, there are a variety of potential paths to take.
Growing cannabis for research
A number of Southeast Asian countries are currently exploring the potential for cannabis in medical opportunities. This includes both marijuana and hemp. Until any conclusive findings are settled upon and new legislation is adopted, entrepreneurs can profit off growing cannabis to sell to research facilities or merely running the growing operations in partnership with a research organisation.
This will require finding the right partnerships and getting licenses to grow medical marijuana or hemp for research. In order to succeed you will have to learn about the intensive process of growing cannabis effectively. This can take and experience, and perfecting strains of marijuana is becoming an art craft in and of itself.
One of the byproducts of marijuana and hemp is called cannabidiol or CBD. This is different from THC, which is the psychoactive element that gets you high. Rather, CBD is a compound that offers a number of medical benefits. As Southeast Asia is mainly aiming to adopt medical cannabis, it is likely they will favor CBD products more than THC products, which have recreational appeal.
The United States Food & Drug Administration recently removed CBD from its drug schedule but requires that it comes from industrial hemp and contains less than 0.3 per cent THC. A number of people will use CBD oil for anxiety, aches and pains, and other conditions with a good amount of success. While the research is still not conclusive, CBD is likely the most medicinally beneficial part of cannabis.
There is a wide range of CBD companies that can be found across the internet right now. Their e-commerce stores are stocked with all sorts of CBD-infused products, including oil tinctures, gummies, gel capsules, topical ointments, and more. They can be ordered online and sent straight to your home.
Medical marijuana is an enormous industry, making up tens of billions of dollars in sales per year. For entrepreneurs who are able to sell cannabis to patients for treatment, they can cash in on the emerging trend. Success in this vertical requires that entrepreneurs can find the best suppliers of product and curate high-quality strains that meet the requirements of both regulators and consumers.
This can be a competitive space, where consumers will begin to rely on location, referral, brand image, and price to determine who they will purchase from. As a result, entrepreneurs need to be willing to engage in competitive businesses tactics and develop unique strategies to gain customers. Similar to coffee shops, medical marijuana dispensaries need to have a niche appeal that helps differentiate them from the rest.
Once you have decided what aspect of the cannabis business you want to target, you will have to establish all of the necessary components of your business. Most importantly, you will need to acquire the proper permits and become familiar with local regulations. Countries such as Singapore can be incredibly strict, outlawing even chewing gum, and this means that regulation is a major barrier of entry for business.
After ensuring that all of your business activities are compliant with the government, set up your supply chain and business plan. Whether you aim to grow the plants yourself or work with a grower, you need to find a means of supplying the cannabis product. Many countries will have quality controls on the plants themselves, specifying the maximum THC content or what type of chemicals can be used. This means you need to find the right suppliers who will offer high-quality goods that match regulations.
Southeast Asia has seen massive growth in the world economy over the last few years. Any entrepreneur looking to get a slice of that pie can be rewarded for building new areas of these emerging economies. As more countries in the area open up to medical cannabis and the cannabis industry as a whole, there is a new-found opportunity for business ventures. Figure out what your strategy is and how you will go about creating value for your customer, then make it happen.
Disclosure: The author is part owner of a cannabis cultivation facility in California (not linked in this article).