There has been a drastic change in the attitude towards marijuana in the entire world with many countries legalizing marijuana in some form or the other. But India has been completely out of this global trend, as the use of cannabis – both medical and recreational, remains illegal in the country. Ironically, Cannabis has a long history in India, veiled in legends and religion. The cannabis plant, although now grown across the world, is indigenous to the subcontinent. In fact, one of the two main species of the plant — Cannabis indica — is named after our country. Cannabis is referred to in ancient Indian historic and religious texts, in accounts by Portuguese visitors and British invaders, and continues to be used in Hindu rituals across the country — most commonly in bhang form.
According to a study by AIIMS in 2019, nearly 7.2 million people in India have consumed marijuana in one way or another but this data does not actually show the true spread of this so-called ‘drug’. It also has been clinically proven that marijuana treats glaucoma, prevents cancer from spreading to other parts of the body, reduces anxiety, slows the progress of Alzheimer’s disease, improves metabolism and is even said to spur creativity in our brain.
Considering the health benefits and the spread of marijuana, the business of marijuana becomes not only lucrative for the government by legalizing it but also to people like us who can actually both reap the medical benefits of it and even make a business out of this plant. We now try to look at the economics of marijuana and the business that could arise from this.
Global Market for Marijuana
The global market for cannabis is expected to reach $100 billion by 2025 growing at an astounding rate of 32% CAGR. This growth will also bring with it, an additional revenue for the government which can be seen by $3.2 billion that is contributed to the Netherlands GDP, one of the first countries to legalize cannabis.
The United States has been one of the recent countries to legalize marijuana and the data from this is very promising for any new country trying to legalize marijuana. According to Marijuana Business daily, marijuana-related businesses in the United States could touch $15 billion by this December which would be nearly 40% up from the figures in 2019. This increase is more astonishing keeping in mind the disruptions caused by the pandemic and not every state in the United States has legalized the sale of marijuana both recreationally and medically. These are positive signs for a country like India which contributes only a mere 0.001% to the world market for hemp products.
Experts suggest that the industry would add $40 bn to the US economy by 2021 and would provide 4,14,000 jobs. The industry in Canada is expected to grow to $6.5 bn by 2020, while in Europe it is expected to be worth £106 bn by 2028.
While there is no exact figure for the market size of cannabis in India, other studies do corroborate to the fact that legalizing cannabis is the way to go. One such study shows that in 2018, New Delhi and Mumbai consumed 38.26 metric tonnes and 32.38 metric tonnes of cannabis respectively. It estimated that around Rs 725 crore could be raised in Delhi if cannabis is taxed. This number was pegged at Rs 641 crore for Mumbai.
Business Opportunities
Medical Clinics
According to American Journal of Medicine, fatness is lower in those who use cannabis in comparison to non-users. This is not the only health benefit of using cannabis it is also clinically proven that it treats glaucoma, prevents cancer from spreading to other parts of the body, reduces anxiety, slows the progress of Alzheimer’s disease and improves metabolism. With all these benefits, clinics could provide added health benefits to the citizen and also earn a good sum. India already has one marijuana clinic located in Bengaluru. The clinic sells tablets and oils made from cannabis. Since opening, the center has received over 100 calls and 25 drop-ins.
In the near term, according to “European Cannabis Report”, Europe’s three largest medical cannabis markets – Italy, Netherlands and Germany – will see patient counts more than double to a combined 225,000 this year. The data also indicates that the marijuana clinics located in Europe have proven to be a cash-cow.
Patanjali which is one of the leading pharmaceutical company in India has successfully entered numerous segments and could be the first indigenous company to realize the investment potentials in cannabis. It spoke about legalizing the plant in 2019 and is reportedly carrying out industrial and medicinal research. As the world moves to alternative medicines, cannabis could be at the forefront of this.
Medical Research
In the near term, this field will be dominated by the government as it is not expected in the near term that the use of marijuana would become legal. Government medical institutions have already started to research on cannabis. The Indian Institute of Integrative Medicine (IIIM) have already taken legal license to cultivate cannabis for scientific and medical research purposes to develop products for epilepsy and cancer treatment. Under a tripartite agreement, the Council of Scientific & Industrial Research (CSIR), the India Council of Medical Research (ICMR) and the Department of Biotechnology have agreed to develop the epilepsy and cancer treatment products. The CSIR will cultivate the cannabis product and then carry out clinical work. The ICMR will then administer the clinical trials at the Tata Memorial Centre in Mumbai and AIIMS in Delhi.
While there is no scope for any private player in this space for now, this field has unlimited opportunities for research and development that will be aimed at creating varied medicines from cannabis which could then be sold to the general public.
Start-Ups
There have been many startups in this space abroad which have flourished and have secured funding’s in the millions. These are some of the startups which have been a success –
i. Green Thumb Industries – the firm which focuses on using data-driven analytics to create strains of cannabis to meet their customers own unique needs has 600 employees and has been clocking revenues close to $15 million.
ii. Nirvana Spirits – this firm sells beverages infused with cannabis. They have made some interesting drinks like “Touch ONE Vodka” that is described as a “clean, crisp spirit with a cannabis kick.”
iii. Leaf Trade – it has created a platform to streamline connecting customers with dispensaries.
iv. Kannatopia – also known as the Quora of cannabis, this firm has set up a platform were people above the age of 21 can go and share reviews about different types of strains of marijuana.
v. Cloud Creamery – has an interesting angle for getting in on the cannabis-act. They have created a cannabis-infused ice cream.
These startups have pioneered into fields which were not thought of five years ago. Entrepreneurs in India can also strive and create new businesses in the field of marijuana which could help the government by increasing its revenue and also help the citizens of the country.
Overall, as legalization and research grow, the cannabis dollar wave in the future may be over a trillion-dollar high. Given our natural disposition and vast pool of genetic resources, public-private sector should be encouraged to harness this gift of nature or be prepared to atrophy Atma Nirbhar Bharat by another wave of patents and foreign corporatization of Indian resources. It now depends on our policy makers, whether they can prepare us to surf cannabis dollar wave or let Indians sink under it?
Although legalization is still some way off, the rising number of cannabis and hemp start-up companies, and the growing popular support for the plant’s legalization, is encouraging. Considering the medical and economic reasons in favor of legalizing cannabis, it may not be long before the Indian Government unlock the full potential that legalization would bring. For now, it will be interesting to track the success of India’s first medical cannabis clinic, and whether it will pave the way for others clinics to open across the country.
It’s time to disregard imposed Inhibitions, re-embrace the plant, effectively regulate it, and capitalize on an opportunity that seems like our destiny.
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