Cannabis is expanding its scope from a "narcotic" to a pharmaceutical ingredient. Cannabidiol (CBD), which is present alongside the hallucinogenic component, is used as a treatment for epilepsy, and research and development is underway on therapies for cancer, Alzheimer's disease, and Parkinson's disease. In Korea, the demonstration phase that has continued for six years is giving way to full-scale CBD new drug development and localization of ingredients.
Medical cannabis refers to a pharmaceutical ingredient in which tetrahydrocannabinol (THC), the hallucinogenic component found in cannabis flowers, is reduced to below 0.3% and only the CBD component is extracted. A representative therapy using CBD is Epidiolex, an epilepsy drug developed by the British pharmaceutical company GW Pharmaceuticals. In 2018, it became the first therapy with CBD as the main ingredient to receive approval from the U.S. Food and Drug Administration (FDA).
The market is also growing. According to market research firm Global Market Insights, the global medical cannabis market is expected to grow to $108 billion (about 158 trillion won) by 2032. Major countries such as the United States, Canada, the United Kingdom, Germany, and Australia currently allow medical cannabis, and Japan also eased related regulations in 2024.
In Korea, medical cannabis is being cultivated directly, and demonstrations for CBD production are ongoing. The cannabis regulation-free special zone in Andong, North Gyeongsang, is the only place in Korea where cultivation of medical cannabis through CBD extraction and ingredient production can be demonstrated.
◇ Cannabis grown in a smart farm, reborn as a pharmaceutical ingredient
On the morning of the 10th, the first things encountered upon entering the cannabis cultivation facility in the regulation-free special zone in Imha-myeon, Andong, North Gyeongsang, were a fence shaped like iron bars and an access control device. After donning a white cultivation gown and completing entry procedures, we went inside. Closed-circuit (CC)TVs were installed throughout the facility.
In Korea, cannabis is not permitted for ordinary cultivation and distribution under the Narcotics Control Act. However, this site was designated in 2020 as the nation's only special zone for demonstrating medical cannabis, and it has tested technologies ranging from cultivation to ingredient extraction and production. Last year, Yeoncheon County in Gyeonggi Province was also designated as a regulatory sandbox, enabling CBD cultivation, and currently cultivation is allowed in only two places in Korea: Andong and Yeoncheon.
The CBD cultivation site within the Andong special zone covers about 10,000 pyeong (33,002 square meters). However, a large wildfire that swept through the North Gyeongsang region in March last year burned much of the cultivation facilities, leaving most of the land empty now. About a year and six months later, what has been restored is a smart farm cultivation facility of about 20 pyeong and a seedling space of about 3 pyeong. Weeds were growing across the wide site.
At one time, more than 10 companies took part in CBD cultivation here. But as systems were slow to be established, technical demonstrations continued into the sixth year, and only about two to three corporations remain now.
Inside the small container used as a seedling space, cannabis planted in pots was lined up. Seeds imported from the United States are germinated and grown by moving the pots according to the growth stage. Once the cannabis grows to a certain extent, it is moved to the smart farm next door, where temperature, humidity, and other growth conditions are controlled.
When the cannabis has grown sufficiently, the flower parts are harvested and dried, then moved to the NeoCannBio laboratory in the Andong Bio Industrial Complex. There, the components in the flowers are separated to extract high-purity CBD.
NeoCannBio has participated in medical cannabis technology demonstrations in the Andong special zone since 2021. Based on its self-developed high-purity CBD extraction technology, it has established the entire process of extracting and refining CBD and producing it as an ingredient using cannabis cultivated directly in the special zone.
In particular, the closed-type microwave (MW)-based CBD extraction technology, developed for the first time in the world, extracts CBD from cannabis by using high-frequency electromagnetic waves in a sealed space like a microwave oven. Compared with conventional heat extraction, it shortens extraction time and reduces component loss due to heat.
◇ Beyond "five years of demonstrations" to "commercial production"… building GMP and CDMO facilities
Medical cannabis research had long struggled to move beyond the lab. To develop pharmaceuticals, clinical research must proceed with ingredients and drugs produced in Good Manufacturing Practice (GMP) facilities, but it was difficult to obtain approval from the Ministry of Food and Drug Safety because relevant systems were not in place.
Recently, however, discussions on improving systems for the safety management and industrialization of medical cannabis have accelerated, backed by cooperation from the Ministery of Food and Drug Safety and lawmakers' introduction of amendments to the Narcotics Control Act.
The next goal for the industry, after about five years of technical demonstrations, is commercial production. NeoCannBio has received a building permit for a GMP facility and will break ground in October. It will cover about 1,500 pyeong (5,031 square meters) and is slated for completion by next year.
Once the GMP facility is completed, production of medical cannabis ingredients conducted in small-scale facilities can be expanded into a pharmaceutical development and production system. A contract development and manufacturing organization (CDMO) facility for finished drugs will also be built next to the production plant. The plan is to connect everything from development to production of medicines using CBD with domestic pharmaceutical and biotech corporations.
Kim Jeong-guk, president of NeoCannBio, said, "The efficacy and safety of medical cannabis have already been proven, and now, within a strict system, we will localize this ingredient so more patients can benefit," adding, "We will focus on laying the groundwork so that pharmaceutical companies can develop better new drugs and apply them to more diseases."
Currently, 콜마, HLB Life Science(067630), and others are working with NeoCannBio.
HLB Life Science also sees CBD as one of its future new businesses and is conducting research. Kang Hee-beom, head of R&D New Drug Research Institute at HLB Life Science, said, "We are conducting research to develop treatments for central nervous system (CNS) diseases such as epilepsy, insomnia, and Parkinson's disease, as well as anticancer and inflammatory bowel disease therapies, by receiving high-purity CBD ingredients—that is, active pharmaceutical ingredient (API)—from NeoCannBio."
Currently, the company is discovering CBD candidate substances and determining therapeutic areas. It plans to proceed sequentially with preclinical studies, pharmacokinetic and pharmacodynamic (PK/PD) analyses, and toxicity and safety evaluations.
◇ A QR code on every cannabis root… every step locked down with hundreds of CCTVs
For medical cannabis to lead to actual drug production, it is essential not only to ensure the quality of the ingredients but also to establish a rigorous safety management system covering the entire process from cultivation and extraction to manufacturing and distribution.
In the Andong special zone, not only cultivation and movement of cannabis but also people and vehicles entering the facility are strictly controlled.
Here, cannabis is not simply managed by confining it within a fence. CCTVs are installed throughout the special zone and inside cultivation facilities and smart farms, allowing the control center to monitor the movements of people and vehicles 24 hours a day. Control procedures apply to every step, from facility access to cannabis movement and external transfer.
Cannabis under cultivation is assigned a QR code at the root level. Scanning the QR code reveals the plant's cultivation location, start date, and inspection history. The history from cultivation to movement can be tracked for each plant.
An official at the control center said, "We operate a video control service by installing CCTVs in all areas, including cannabis, people, and vehicles, and manage the entire cycle from cultivation to movement of cannabis through a Blockchain-based history management service," adding, "In six years, there has not been a single case of cannabis leaving this special zone."