The Thai cannabis corporation claims that economic gains are not likely to materialize

7 Jul 2022
×

Error message

Notice: Undefined offset: 0 in eval() (line 48 of /srv/www/dev.phanganist.com/public_html/modules/php/php.module(80) : eval()'d code).

A cannabis business in Thailand claimed that its low-priced products could potentially undercut the cannabis industry in New Zealand, and investors were not adequately advised. 

But a prohibition on manufactured cannabis has been suggested in New Zealand's latest draft legislation. 

Jim Plamondon of the Thai Cannabis Company said analysts' "eye-popping predictions", along with the likely introduction of cannabis legalization after the referendum next month, had drawn the interest of investors and policymakers in New Zealand. 

The future market revenue of medicinal cannabis in New Zealand was projected at $360 million a year and taxes were calculated at $490 million. 

The future market value of all cannabis was calculated at $NZ1.5 billion annually by New Zealand's Market and Economic Consulting Firm Berl. 

Plamondon said the influence of low-priced products is projected to be omitted. 

If the expectation is that the economic gains of legalizing cannabis would improve the country and help bring it out of the slump, it would almost definitely not be the case. 

"And yes, nearly all the investment pumped into the drug business in New Zealand is expected to go straight down to the gurgler." 

However, as the legislation now stands, Berl said the manufactured goods will not be permitted except for cannabis plant seeds. 

Dr Ganesh Rajaram Ahirao (Ganesh Nana), Research Officer, said that the reach under which Berl rendered projections for the Ministry of Justice was that the planned market for cannabis will be tightly controlled at all stages of cultivation, manufacturing, and supply. 

Berl understood that, except for cannabis plant seeds, there was no purpose (or allowance) for the manufacture of the substance. 

"In addition, provided the strictly controlled market method adopted, the allocation of the industry would specifically state how much is permitted to be developed, whereas the exclusion of low-priced goods would be provided," he said. 

"We do not see, in this light, how the effect of imported cannabis is important to our market size figures." 

Plamondon predicted that regulations drawn up in expectation of the regulation of medical cannabis would inevitably adjust to accommodate cheaper manufactured goods. 

He said New Zealand was the first export focus market for his business. 

"In two years ' time, we plan to sell it there. It's evident that there are a few main entrance points that will lead us to the sector, and they're very good. 

"I have corresponded with a couple who are really intent on getting an identical commodity at a price of one tenth-who wouldn't be?" 

Snowball Impact, a private capital-raising company, recently advised investors not to bring any funds they were not ready to gamble into marijuana. 

 

Director Bill O'Boyle said the remarks referred to the industry's infancy, speculation regarding the new regulations, the investment going through some of the early companies, and the scale of the sector. 

The production of the raw commodity and competition for that production inevitably exist, and the other issue is the distribution to the target consumer of that commodity. 

 

"The main question we see is if, in the immediate future, GPs would be selling some medical weed drugs and, if so, how long it would take to get online." 

This week, RNZ revealed that two years after medicinal cannabis was rendered legal in Britain, several physicians were still not recommending it, and New Zealand physicians seemed to be in the same camp during the early days. 

In response to the alert from the corporation in Thailand, O'Boyle said that citizens had to respond to the law and what is authorized. 

We would like our clients to have a long, hard time worrying about just what the conditions of the business they are trying to participate in without speaking explicitly to what that regulation is. 

In a relatively specific sector, the dilemma we will pose, regardless of where the product originated from, is how to deal with a commodity product and grow at cost. 

"I have no question that if they are permitted to do so, there will be players offshore searching down here to market their goods." 

Medical Kiwi, a medical cannabis corporation located in Nelson, has now sold its first two years of development to Hectares, a major leader in the medicinal cannabis sector, which is equal to $30 million in 2021, and $60 million in 2022. 

A crowdfunding initiative was recently initiated to collect $2 million to get output moving in Christchurch to help finance its Nelson growth to equipment acquisitions. 

Aldo Miccio, co-founder, and chairman said the comment by Plamondon was important, particularly about the Thai commodity being theoretically a tenth of the cost of cannabis in New Zealand. 

"The margins involved are fairly decent-which is why a number of companies are spending, but with our prices, we plan to be much cheaper than the goods actually imported." 

 

Miccio said it was definitely easier to cultivate cannabis cultivated outdoors, such as that cultivated at tropical altitudes in Thailand, but only indoor extracts can satisfy the inspection of medicinal requirements.

Source