Cannabis: An economic driver in emerging markets?

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Cannabis Market

The potential benefits of the cannabis industry.

Thanks to the commoditization of cannabis, there are now countless companies that grow the plant for legal 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 Malta-based Melabis, 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.

Melabis has been in the industry for several years. Its aim is to be the largest outdoor cultivator of cannabis for industrial and extraction purposes; to this end, it works closely with governments in the EU and Asia, with offices in Malta, Laos, Turkey, Thailand and Uzbekistan.

Melabis recently secured 3,000 hectares of prime agricultural land in Uzbekistan, an emerging market currently experiencing a pro-business boom. By making Melabis the sole license holder in the entire region, Uzbekistan has become the first Central Asian country to indirectly support the WHO medical cannabis initiative. Melabis founder Damon Booth is often quoted by international media as an expert in helping countries legislate and benefit from the global shift in policy.

The legal status of cannabis is still a controversial topic around the world. Some countries have legalized not only the use of marijuana 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.

Cannabis and the Law

Uruguay, Canada, the Netherlands, Czech Republic, Georgia, Portugal — these are among the countries that have partially or completely legalized the production and consumption of cannabis. A number of experts, speaking in research papers and across the world’s media outlets, agree that this is the right decision.

According to proponents of legalization, the lifting of bans damages drug gangs, gives the police more opportunities and time to solve more serious problems, and discourages the demand for hard drugs. British weekly The Economist claims that if legalization is expanded to other countries, drug damage around the world will be significantly reduced.

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.

However, the issue of full legalization of light narcotic substances is another subject.

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.