Medical cannabis, CBD its milder cousin, and a plethora of environmental and impact hemp technologies are sweeping across Asia already. While countries like Thailand have taken the lead, the big hitters are not far behind, with change already perceptible in China and India. The question for Hong Hong is whether it will step up to the challenges and opportunities this will bring, or if it will remain on the sidelines.

By Henri Sant-Cassia

The opportunity is huge. Seasoned medical cannabis industry insiders believe Asia could be the world’s production and consumption leader for all types of products, with tens of hundreds of billions of dollars in revenue.

Just as it has with trade and finance, Hong Kong is the obvious choice as a base for pan-Asian ventures, especially given Singapore’s traditionally draconian attitude to all things cannabis, but Hong Kong cannot afford to assume it will be first choice. If it doesn’t take the lead and proactively frame legislation and policies, it risks being left behind and seeing revenues, jobs and investment flow elsewhere.

I am, perhaps, biased. I am a co-founder in a cannabis & hemp investment fund which is focused on Europe and particularly Asia. We have watched in astonishment at the speed of change in our sector, and we have seen the hard lessons learned by Western countries who have been bypassed and left behind.


Asia is tipped for the top for more than its huge populations, its growing affluence and the sheer size of its markets. Firstly, there is a natural fit between cannabis derrived products and consumers. Traditional Asian medicine has long used cannabis and cannabis derrivatives both in Chinese and Ayurvedic traditions. 

Today, the key cannabis growth sectors of cosmetics, food, beverage and vapes, Asia leads the world in innovation. Asia is also home to the fanatical brand followings beloved of cannabis investors. This convergence of ancient useage, modern development and brand loyalty makes it unique.

Secondly, many forget that behind the hype of consumable cannabis is the other side of the coin – hemp, with all its green advantages and strengths as both a crop and as an industrial product. Growing pressure on the environment throughout Asia makes it a region where hemp can bring about positive change. Projects from plastic replacement to lower carbon footprint building materials and textiles have a natural home in Asia.

All these possible uses and markets have one thing in common. They all rely on the investment which fuels new projects, brings Western products to new markets and establishes new ventures. Hong Kong must create the right conditions to attract, retain and grow these investments through a series of legislative, practical and marketing initatives.


There are three key themes to these initiatives. Firstly, Hong Kong must position itself as a hub for medical cannabis & hemp, much in the same way as Malta has begun to do in Europe. This is about encouraging companies, research projects and investments to domicile in the territory. By being proactive in promotion, creating the right conditions and cutting certain types of red tape, Hong Kong can show that it is the easiest place to start in Asia, and this will give it first mover advantage.

Secondly, Hong Kong must create a trusted, secure environment for consumers and investors and take the lead in setting standards. Medical cannabis is unfairly tainted by associations with recreational use, and the only way to correct this perception is to focus on safety. By demonstrating that products and projects are being rigorously monitored and controlled, Hong Kong can attract inflows of money, from purchases to capital investments.

Thirdly, Hong Kong has the opportunity to build a network across Asia. Instead of an insular, protectionist attitude, there must be impetus to reach out to key countries from India to Japan, and turn these initiatives into something bigger than Hong Kong. This requires true thought leadership, an open mind and a willingness to share.

A single article is no place for a comprehensive examination of the details of these initiatives but we can explore some of the main categories and what these might look like in outline. A first look at the hemp and cannabis world can be bewildering, but even the most conservative legislator with no exposure to these markets can quickly grasp that some countries have created good laws and regulations, and a lot of the hard work has already been done. There are organisations across the world striving to impose order on this sector, and selecting best practises 


A glance at consumer tests, media exposes or a talk with buyers of cannabis products shows that this is an emerging market where cowboys still proliferate. Product quality, accurate test results, traceable ingredients and even packaging and labelling standards are an unregulated confusion in most countries. Imposing standards on retail and distribution within Kong Kong is a priority.

Regulators only need look at countries like Germany and its medical cannabis program, or at non-profits like the UK’s Cannabis Medical Council to see the kinds of measures that must become mandatory. These include full laboratory test certificates for all product batches which cover potency, purity, absence of pesticides and heavy metals. Companies must have traceable raw ingredients, clear packaging and easily understood dosage information. 

Using provenance technologies such as Cobidol can raise these efforts to a higher level but something as simple as a compulsory QR code which consumers can scan to find out what is in their products, where it was made and what it could do would be an easy first step.

Shops, distributors and online players need regular blind tests, and a system of licensing for retailers and wholesalers will help the state control everything from the backgrounds of people working in the industry to the individual products on sale.


Medical cannabis, whether prescribed by a doctor or bought in a health food shop is a medical product, and buyers are effectively patients. Patient data must be kept as confidential as it would be in a surgery, and this means applying strict data protection policies to companies working in the field. 

Moreover, from a practical standpoint these policies must be enforced properly and must be backed by cybersecurity standards which far exceed other jurisdictions. The perception of the safety of patient data is paramount, and protecting consumers from overzealous marketing and the sale of private information should be key components of a strict approach to data security and privacy.

In Europe, GDPR regulations, heavy fines and a campaign to educate both companies and customers has led to a transformation of the way customer data is handled.


Hong Kong must become a jurisdiction that makes things easy for founders. This involves more than keeping costs low and timeframes short. This is about making incorporation, banking and payment services, office space, laboratory setups and other essentials accessible. A reduction in red tape, an appreciation that not every startup has funding to spare, and a system which provides information, guidance and personalised help for new ventures are the foundations of a founder friendly jurisdiction. 

Some countries, notably Malta, go further. Hong Kong needs to consider grants, additional tax breaks and other financial incentives, as well as providing a knowledge rich environment where new companies can share information to help them become viable enterprises faster.

The most successful countries in the space – Canada, the USA and Australia have become powerful because they removed roadblocks and attracted founders to build and scale new ventures. At the other end of the spectrum are countries where prospects are gloomy, and new ventures or even new research is actively discouraged –  Russia for example.


The most immediate job for Hong Kong is scouring laws and regulations to ensure that capital flows can be attracted, retained and managed, so that there are no legal bottlenecks which could put investors off investing in the space through the territory.

As a fund, we are acutely aware of anything which can impede the flow of capital. Are there laws which link investments to the legality of company activity within Hong Kong or is regulatory approval in the country in which an investment is based sufficient? Are investors being given encouragement, or are they being warned to be careful? Some of this is perceptual, the rest is factual.

This applies right through the cycle of investment. From startup to public listing or a sale through M&A activity, everything must be pro-cannabis, pro-investment and most importantly pro-investor. This requires a dual approach which facilitates and protects transactions.

For example, a public listing has been one of the key ways that companies have either secured an exit or further liquidity in Canada, the US and Australia, but this has not been without its problems. It has been encouraged but at the same time this has led to volatility as companies have moved towards an IPO before they have been ready. Equally in the UK, the FTSE and AIM have imposed informal restrictions that have made listing an arduous process. Arguably this has been too much of a swing in the opposite direction. The sweet spot for Hong Kong is somewhere in between – encouraging companies while controlling quality and avoiding bubbles.

The prize for getting this balance right is huge. Internationally, Hong Kong is still the most attractive place for an Asian listing, and the cannabis and hemp industry will undoubtedly produce many IPO worth entities, along with hundreds, if not thousands of profitable private investments ranging from small startups to major private enteprises.


No amount of legislating will have an effect unless the word gets out. Canada has made such big strides in the industry because it has become known globally as the centre for cannabis, and part of this is down to promotion by the Canadian Stock Exchange and the government. Equally, Malta, although a tiny island, has invested heavily in advertising and networking through its Malta Enteprise division.

Hong Kong has to spread the word that it is a safe, progressive, investor and founder friendly place to domicile ventures. The good news is that Asia is still wide open, and no-one else is currently vying for this crown. Our fund has dealt with Invest in Hong Kong, and we have already seen how effective this agency can be. 

This is simply a matter of conceptualising, budgeting and planning a campaign to create this perception both in the East and also in the West, where companies are beginning to think about their Asian market entries.


None of these suggestions are complex, and in fact, the single most important thing Hong Kong needs is a decision. Does it want to become a hub and an internationally recognised centre of excellence for all things cannabis & hemp, or would it prefer to fade into the background? From this decision comes the political and legislative will to progress or to stand still.

The need then is for open debate and for the decision making process to begin in earnest. The market has already shown it will evolve and grow at a speed which as taken even industry leaders and the most optimistic by surprise. This process of reaching a consensus about Hong Kong’s place in the sector needs to begin now. It shouldn’t be rushed, it needs appreciation of the practical realities and of other countries’ experiences, but the discussion itself is urgent.

The Cannabis Fund