Every business plan needs to answer this question: “How does it help people?”
Thailand was the first Asian country to amend its laws to allow for medical cannabis. The amendment is narrow, essentially allowing only research and development activities under license with public institutions and consumption with a medical certificate. Companies are positioning for the eventual commercialisation and expecting similar liberalisation throughout Asia. In the “green rush” to develop markets, companies must not ignore the answer to that core business question.
The Opportunity – Real People Benefits
Attitudes regarding cannabis are changing globally. This is not just a Thailand phenomenon. Countries around the world are amending their laws to allow for cannabis production and consumption.
International banks and Big Logo Advisory Firms forecast the emerging medical cannabis industry will be worth billions of dollars.
Let’s not get excited with specific financial projections. Big dollar numbers suggest business will be quick and easy. It will not. Suffice to say, wherever Asian markets open up, population demographics will point to a need for therapeutic and consumer products across market segments. The demand is a no brainer as can be seen in markets where commercial legalisation of medical cannabis has already occurred. But bringing new products to new markets in an evolving regulatory environment is never easy.
The Opportunity – Economic Advantage
Aside from market demand and potential health benefits, governments cannot ignore new employment opportunities for farmers and new tax revenue streams. Thailand’s geography is a golden opportunity with natural sunlight, tropical climate and elevation, all ideal for low cost production and furthering Thailand’s agricultural prime positioning with another cash crop.
The Opportunity – Products Development
Most people think of cannabis as a leafy substance to be smoked. Forget that image in the case of medical cannabis. Instead, medical cannabis is usually consumed as an oil, squeezed from small bottles, the same size as a bottle of eye drops. A droplet or two of cannabis oil is placed under the tongue.
Oils containing the ingredients of the cannabis plant are the result of the manufacturing process, post cultivation. After the plant is cultivated and dried, cannabinoids are extracted from the plant in a laboratory-type facility and processed into oils or sometimes, crystals. Crystals can be infused into consumer goods – creams, edibles and drinks. The productisation is endless. Even pet products are proving to be a significant market segment where cannabis is legal.
Natures Ingredients – Cannabinoids
The cannabis plant contains about 100 different cannabinoids – the plant’s health potential is comprised of these chemical compounds. The two most dominant cannabinoids are TCH (the psychoactive component that gets you high) and CBD (found to have therapeutic attributes.)
Researchers are studying the effects of each cannabinoid in isolation and in combination with each other along with other components of the plant. Some experts assert that optimal benefits are achieved when compounds of the plant act synergistically – known as the entourage effect.
Since the cannabis plant has been illegal for the past 80 years, discoveries of the plant’s wonders – the beneficial and the harmful – have not been fully determined. The World Health Organisation (WHO) states, “the health consequences of cannabis use in developing countries are largely unknown because of limited and non-systematic research.”
In terms of offering a recommendation to governments worldwide, the WHO further states, “Several studies have demonstrated the therapeutic effects of cannabinoids for nausea and vomiting in the advanced stages of illnesses such as cancer and AIDS. Other therapeutic uses of cannabinoids are being demonstrated by controlled studies, including treatment of asthma and glaucoma, as an antidepressant, appetite stimulant, anticonvulsant and anti-spasmodic, research in this area should continue.”
At the very least, legalisation for R&D purposes in Thailand will enable further studies to validate, temper, or refute the current claims of cannabis health and therapeutic benefits. Overly optimistic devotion to the benefits of cannabis and dubious claims will not bode well for those in the industry who will take a more respectful approach. This is an industry that deserves watchful regulation.
The Law - 50 Shades of Grey
Recreational cannabis remains illegal in most of the world. But as more and more countries amend their laws to allow for medical cannabis, it is obvious that policy and legislation is not uniform across countries. Variations include the following:
Legal, with an established formal process.
Legal, but no formal access program.
Illegal to consume, but legal to cultivate with a license.
Legal, but as a last resort treatment after all other solutions are exhausted.
In sum, when researching legislation, dig deeper than the headlines. None of it is black and white.
Thailand is the first country in Asia to legislate medical cannabis. Thus far, Thailand’s legislation is one of prudence. The Thailand Narcotics Act has been amended to allow for medical cannabis, but only for R&D purposes, and only with a license. Commercialisation is further away, although there is speculation that CBD Hemp may be approved for commercialisation, provided the psychoactive component, THC, is limited to a trace percentage.
Regulation determines “Speed to Market”
Thailand is poised to be the leader in Asia, augmenting its dominance in both agriculture and medical tourism. Academic research and industry leadership will be dependent on the pace and robustness of regulation and regulatory infrastructure.
Canada is a shining example of how regulation can promote the cannabis industry and falter with lack of follow through.
Canada rose to cannabis prominence principally because of regulation. A normally conservative country with quiet ambitions was suddenly catapulted onto the cannabis stage. In 2018, Canada was the first G8 country to fully legalise cannabis. Business and investor sentiment flourished because the regulations allowed for it. Despite good intentions, regulating a new industry resulted in regulatory bottlenecks and mishandling. License processing took longer than expected and supply channels were constrained. Some companies could not rollout products and missed their financial targets.
As Thailand continues to update and refine its regulatory model, it will monitor the regulatory progress and pitfalls of other countries, just as Thailand’s neighbours study Thailand’s situation.
Scoping the Business
Positioning cannabis products in the market offers many possibilities. Vertical integration covering plant genetics, cultivation, extraction production, manufacturing, and branding end products all require deep pockets. Scale is required and the capital investment is huge. Entrepreneurs will focus on one part of the value chain stated above, or within the eco-system – such as soil nutrient supply, equipment supply, pesticide analysis testing, insurance, cannabis education and many other factors. There are more than 60 identified opportunities in the eco-system.
Circle back to the fundamental question of the business plan. Making solutions or products that “fit” to promote Thailand’s healthcare industry will address market demand. But business scope and timelines for execution must be in step with the regulations and the ability of regulators to handle an emerging industry. First movers may have a competitive advantage, but there’s also a cost to be a pioneer.
Overzealous business plans must not outpace regulatory realities and business fundamentals.
Special Medical Cannabis Seminar:
Dataconsult’s Thailand Regional Forum will organise a special medical cannabis information seminar at Sasa International House, Sasin School of Management, 7.30-10.00 am. Friday 28 February 2020.
For further details please contact Dataconsult Ltd, email: firstname.lastname@example.org, tel 02-233-5606/7
Originally published here: https://www.bangkokpost.com/business/1867864/medical-cannabis-thailand-leads-worldwide-healthcare-promotion