"It has become possible to produce and cultivate medical cannabis (hemp) in Yeoncheon County, Gyeonggi Province, and the DMZ (Demilitarized Zone). Now, all that remains is to build GMP (Good Manufacturing Practice) facilities and export domestically produced medical cannabis overseas."
Ham Jeong-yeop, CEO of NeoCannBio, met with ChosunBiz at the 1st Gangneung NP·BIO International Conference held at Saint Johns Hotel in Gangneung on the 23rd and said, "With border areas, where growth had been slow due to protection of military facilities and environmental regulations, being designated as a regulatory sandbox in Sep., the production of domestically made medical cannabis has become a reality." A regulatory sandbox refers to a zone where the government suspends or exempts existing regulations for a set period so that corporations can demonstrate new products and technologies for commercialization.
Medical cannabis uses the cannabidiol (CBD) component extracted from the flowers and leaves of cannabis. CBD is non-addictive and has effects such as pain relief and calming the nerves, and its effectiveness has been confirmed for various conditions including epilepsy, Parkinson's disease, dementia, depression, and cancer. For cannabis to be transformed into a therapeutic, CBD must be extracted from the flowers and leaves and refined to reduce the content of tetrahydrocannabinol (THC), which causes hallucinations and addiction, to 0.3% or less.
According to market research firm Global Market Insights, the global medical cannabis market is expected to reach $108 billion (about 158 trillion won) by 2032. Already, 56 countries, including the United States (38 states), Canada, the United Kingdom, Germany, and Australia, have allowed medical cannabis. Even Japan, conservative on narcotics, fully allowed CBD use last year, and France is also pushing to revise related laws.
◇"Technology is at commercialization level… clear momentum for regulatory easing"
NeoCannBio was founded in 2021 by CEO Ham, who was then a principal researcher at the Gangneung Institute of Natural Products of the Korea Institute of Science and Technology (KIST). In 2021, the company succeeded, for the first time in Korea, in completely removing narcotic components and extracting only high-purity CBD, which has therapeutic effects, in the Andong Free Regulatory Zone (Andong zone).
Ham explained, "With our own technology, we can extract more CBD at once than competitors, significantly lowering production unit costs." NeoCannBio is currently conducting preclinical research to develop next-generation anticancer drugs used in combination with anticancer agents, alongside the production and manufacture of high-purity CBD.
Although Korea's medical cannabis technology has already approached the level of commercialization, the Narcotics Control Act has made it impossible to build GMP facilities, which are gateways to clinical trials and overseas exports. The Andong zone, launched as a hub for the medical cannabis industry, has faced the same limitations.
However, as the government recently emphasized a stance of easing regulations on new industries, expectations in the industry have grown. There is also an outlook that regulations could be eased through a presidential decree revision even without revising the relevant laws. In Jun., the National Assembly held the first "medical cannabis activation forum," accelerating the discussion.
◇"Great potential for treating cancer and neurological diseases… expanding overseas cooperation"
NeoCannBio has already begun test cultivation of cannabis for CBD in the DMZ. It is also pursuing a plan to build a GMP facility on the site of the closed Daegwang Middle School in Yeoncheon County. However, whether a GMP can be established requires approval from the Ministry of Food and Drug Safety. The company is also promoting a pilot project to build a CBD smart farm that meets Good Agricultural and Collection Practice (GACP) standards at the site.
Ham said, "If we utilize closed schools or idle military sites in border areas as hubs for the CBD industry, we can ensure security and safety while contributing to revitalizing the local economy," and added, "As climate change has reduced soybean yields in the DMZ, an alternative crop was needed, and medical cannabis has become a new alternative."
The Andong zone is also expanding support. NeoCannBio recently secured an additional 18,000 pyeong of land in the area. An official at the North Gyeongsang Provincial Government said, "We will spare no support for establishing GMP for medical cannabis production."
NeoCannBio is conducting research to reduce side effects and enhance treatment efficacy by combining CBD with anticancer drugs. In preclinical research conducted with KIST, the combined administration of CBD and the chemotherapeutic etoposide resulted in a promoted death of lung cancer cells.
The research team noted, "The two drugs block signaling pathways involved in cell growth and protein synthesis, reducing the survival rate of non-small cell lung cancer cells." Non-small cell lung cancer refers to lung cancers with larger cancer cells. It accounts for 85% of all lung cancers.
In addition, the alleviating effect of cannabis components on inflammatory bowel disease was observed and will be published in a paper. In research on CBD combination therapy conducted with a domestic pharmaceutical company, treatment effects were confirmed in liver cancer, colorectal cancer, and pancreatic cancer. Cooperation with overseas corporations is also increasing. With an Australian corporation, the company is conducting joint research on treatments for mental disorders, and with CannaTech in Japan, it signed a memorandum of understanding (MOU) related to manufacturing CBD products.
◇"Domestic CBD helps cut medical costs and the national health insurance budget"
The world's first medical cannabis new drug is Epidiolex, an epilepsy treatment from British pharmaceutical company GW Pharmaceuticals. It received U.S. Food and Drug Administration (FDA) approval in 2018, and last year's sales reached $972.4 million (1.44 trillion won). This year, it is expected to join the ranks of blockbuster drugs with annual sales exceeding $1 billion.
Korea limitedly allowed CBD therapeutics in 2019, but because they are imported medicines, the monthly drug cost reaches 30 million won, and insurance coverage is also stringent. Ham emphasized, "If CBD is produced domestically at high purity and with stable supply, it will help ease the burden on patients as well as the national health insurance budget," adding, "This is precisely why localization of CBD is necessary."
CBD itself also reduces medical costs. In fact, according to a study by Eastern Michigan University in the United States, over the seven years after medical cannabis was legalized, drug expenditure in the U.S. health insurance market decreased by an average of 22%. CBD replaced prescriptions for opioid analgesics and high-priced anticonvulsants.
Ham said, "Medical cannabis is not a component that causes anxiety or is dangerous to the public, but a safe material with therapeutic and industrial value," and added, "We will work to grow a high value-added industry with domestic, homegrown technology."