Part II of the Cannabis Fund series covers quality control, security concerns, and opening up Hong Kong to new ventures in the cannabis and hemp industry.
Photo: Image by TinaKru.
Globally, the industry is in its early stages and it is still highly undeveloped from an industrial and legal perspective. Product quality, accurate test results, traceable ingredients, and even packaging and labelling standards are in flux and a source of confusion most countries. Imposing standards on retail sales, distribution, and supply chain management within Kong Kong is a priority.
Regulators only need to look at countries like Germany and its medical cannabis program, or at non-profits like the UK’s Cannabis Medical Council to see the type of measures that must become mandatory. These include full laboratory test certificates for all product batches that certify potency, purity, and the 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 they were made, and what they could do would be an easy first step.
Shops, distributors, and online players need regular blind spot testing of product, and a system of licensing for retailers and wholesalers will help the state to regulate and monitor everything from the backgrounds of industry workers to the individual products on sale.
Putting security first
Whether prescribed by a doctor or bought in a health food shop, medical cannabis is a medical product, suggesting buyers are patients by prescription or self-medication. Patient data must be kept confidential, which means applying strict data protection policies to companies working in the field.
Moreover, from a practical standpoint these policies must be enforced properly and backed by strong cyber-security standards. The perception of the safety of patient data is paramount, and protecting consumers from overzealous marketing and the sale of private information are 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 consumers has led to a transformation in the way customer data is handled.
Empowering new ventures
Hong Kong must become a jurisdiction that makes things easy for founders of new ventures. 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. It’s about a reduction in red tape, an appreciation that not every start-up has the funding to spare, and a system that provides information, guidance and personalised help for new ventures. These are the building blocks of a founder-friendly jurisdiction. Some countries, notably Malta, have gone beyond these generic business-friendly measures to do more to specifically attract and support the growth of the medical cannabis industry. Hong Kong needs to consider grants, additional tax breaks and other financial incentives. It also needs to provide 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, such as Russia, where prospects are gloomy, and new ventures or even new research is actively discouraged.
About the Cannabis Fund
The Cannabis Fund is a VC fund dedicated to pioneering medical cannabis and impact investment hemp projects in Europe and Asia. The fund enables investors to take a balanced index on the entire industry, with a basket of diverse opportunities, all forming a complete ecosystem.
We see huge future growth across Asia, especially in China, Japan, India, and South Korea, alongside the progressive jurisdictions such as Thailand. Our aim is to educate and inform serious investors and bring them together with the next generation of Asian cannabis & hemp entrepreneurs.
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- Can Hong Kong become Asia’s hub for medical cannabis and hemp?: Part II – November 26, 2019