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ASIF420 Forecast: Cannabis Business Opportunities in Emerging Markets

Thanks to the commoditization of cannabis products, there are now countless companies that grow the plant for legal medical purposes. Due to low production costs and suitable natural conditions, they will eventually set up shop in the developing countries of Latin America, Africa, and Asia, as cannabis farms provide jobs and tax revenue.

Countries that understand the economic benefits and see the growing pace of this industry are now easing cannabis legislation in order to attract these companies, and their deep pockets.

According to practical research from Lesotho-based WeGROW, growing cannabis uses 10 times less water than traditional crops like cotton. Together with a positive carbon offset, stats like this make it difficult to ignore the progressive environmental effects.

WeGROW has been in the industry for several years. Its aim is to be the largest outdoor cultivator of cannabis for medical and extraction purposes; to this end, it works closely with governments in the EU and Asia, with offices in Lesotho, Berlin, Israel, Serbia and Ukraine.

WeGrow recently secured 17,000 sqm of prime agricultural land in Lesotho, an emerging market currently experiencing a pro-business boom. Lesotho has become the first African country to indirectly support the WHO medical cannabis initiative.

The legal status of cannabis is still a controversial topic around the world. Some countries have legalized not only the use of cannabis for medical purposes, but also the use of “soft” drugs. Most states, however, remain conservative in this regard, postponing all decisions around cannabis, medical or otherwise.

Despite this hesitation, legalization has been growing for many years, thanks, in large part, to the World Health Organization. Following the recommendation of the WHO, in December 2020, the UN Commission on Narcotic Drugs excluded cannabis from its list of dangerous substances. While a huge coup, and supported by many member states, there is still a sizable faction that is categorically against it.

There is much to examine in the prospects for widespread legalization of medical cannabis, as well as the economic, social, and environmental aspects of surrounding this divisive yet promising plant.

The permission to use cannabis with a reduced THC concentration (0.1-0.2%) exclusively for medical purposes makes sense as one of the weed’s active ingredients, cannabidiol (CBD), has strong soothing properties. This effect makes life much easier for patients suffering from pain and nervousness. Fortunately, scientists have learned how to regulate the cannabidiol to tetrahydrocannabinol (THC causes psychoactive side effects and highs) ratio in marijuana so that it can be grown for only medicinal purposes. But the legalization of medical cannabis has implications for other areas as well.

It does seem like Cannabis will become more and more prevalent, clearly, countries want to cut out the black market and generate taxable income from a plant that has been used for 1000s of years. On top of this the ability to off- set carbon, become more sustainable and potentially limit the damage and control the use of the plant it does seem a no brainer to legislate. It will take time but if the USA a typically conservative country is already at the forefront then global adoption could be inevitable.

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