Healthy Ageing APAC Summit 2019
CBD potential in APAC: Regulations and history have laid strong foundation for market growth - Elixinol
The company sees the Japanese market as one of its biggest successes, where it first entered in 2015 via the establishment of the Hemp Foods Japan, and now also operates under Elixinol Japan.
The firm currently sells hemp extract, hemp oil, CBD roll-on, and even pet treats in Japan.
At the recent Healthy Ageing Summit APAC organised by NutraIngredients-Asia and FoodNavigator-Asia, the firm’s regulatory officer Joy Beckerman spoke about its experience in the APAC market and the potential for CBD market growth in the region.
Japan – a case study
Japan’s current regulatory framework on the cannabis plant is based on the Cannabis Control Act introduced in 1948.
The act exclusively regulates tetrahydrocannabinol (THC) – the psychoactive component of cannabis.
Against this backdrop, Beckerman said that the firm had to take on the task of “making its own guidelines” when selling CBD products in Japan.
“It is entirely void in Japan in any law surrounding CBD. So that is very challenging, because we are navigating around the void within a highly regulated plant.
“We have to make our own guidelines in all of our products in Japan to have non-detectable THC, entirely non-detectable.”
After forming Hemp Foods Japan, the company had to gain the local authorities’ trust by showing full compliance to the country’s laws.
“[We] were able to prove to the government and to regulators our strict adherence to every single law and that is how Elixinol makes its success – its commitment to transparency, purity, and potency as well as strict and rigorous adherence to compliance.
“Once we were able to establish that relationship within a year after Hemp Foods Japan was launched, we then formed Elixinol Japan in January of 2016.”
Elixinol Japan was launched at the Kyoto Hemp Forum where the Prime Minister’s wife Akie Abe was a speaker and a known supporter of its products.
Further progress was made when the firm successfully lobbied the Japanese authorities to approve outdoor advertisements for hemp-derived CBD for the first time in the Omotesando train station in Tokyo.
Navigating CBD import restrictions
Importation of flowers and leaves of cannabis into Japan is not allowed, so the firm had to develop technology with which to make its products from the stalks and seeds of the plant.
In addition, it also faces challenges with importing CBD end-products into Japan, Beckerman said.
“There are still many issues with importing especially from America and the Japanese will still stop our shipments sometimes. They don’t confiscate, they don’t seize our products, but they do sometimes stop those shipments and sometimes for unexpected reasons.
“For example, our CBD roll-on is made with a peppermint oil, which has a very strong aroma and one of our shipments was rejected solely because of the strong aroma of the peppermint oil and having nothing at all to do with any form of cannabis,” she said.
China’s and South Asia potential
As for other parts of Asia, positive response has been seen in China and India.
Citing statistics from New Frontier Data, Beckerman pointed out that China accounted for nearly a-third of the global hemp market, recording sales worth USD$1.11bn in 2017, and this figure could grow to as much as US$4.4bn by 2024.
“I should say that China is actually moving along, believe it or not, as tiny as it is even Malaysia, and in India, there is also the state of Uttarakhand that has legalised hemp cultivation.”
The history of using cannabis as a medicine has also laid a foundation and basic understanding of its health benefits in Asia, she said.
“Only in Asia, the history goes back thousands and thousands of years using cannabis as a medicine.
“In countries like India, Nepal, and Sri Lanka, there are thousands of years of history in conjunction with Ayurveda and in Central Asia and in the Far East, there is also a thousand years history using it,” she said.
As for firms which wish to conduct CBD health foods business, Beckerman stressed the need to seek advice from food and drug attorneys, and even criminal attorneys to navigate the regulations in different countries.
“A critical advice for you is to hire the right lawyers for every aspect of your business, and criminal attorneys, believe it or not, are going to be your friend here, because they have a full understanding of the many intricacies around cannabis law and how government and authorities react to cannabis.
“They are different laws for flowers VS extract VS oil and they are very complex. You will need to hire the right attorney and of course food and drug attorneys need to be hired to navigate labelling, packaging, and manufacturing requirements,” she said.