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Lebanese cannabis is often hailed as among the finest in the world, a sentiment echoed by former Minister of Economy Raëd Khoury, MP of Baalbek-Hermel, Antoine Habchi, and supported by a 2018 report from the consulting agency McKinsey & Co. Let’s focus on showcasing the profitability of legalizing cannabis for medicinal purposes.
National Asset
First, let’s examine UN data, which ranks Lebanon as the third-largest supplier of cannabis resin in the world and the fifth-largest supplier of cannabis seeds in Asia, as per a 2019 report. The UN estimates that nearly 40,000 hectares are devoted to cannabis cultivation in Lebanon, mostly exported as raw material or processed.
Even during the Lebanese Civil War (1975-1990), cannabis production soared to record levels despite prohibition, which is ongoing. It wasn’t until April 21, 2020, that cannabis cultivation was legalized in Lebanon for medicinal purposes, albeit no tangible outcomes. Despite opposition from Hezbollah four years ago, Abbas al-Hajj Hassan, Minister of Agriculture, acknowledged the primarily political, rather than technical, hurdles to implementation, recognizing the potential benefits of such a law.
So, what makes Lebanese cannabis so appealing? Antoine Habchi spoke to This Is Beirut and emphasized two key factors: geography and price competitiveness. Lebanon’s climate and soil quality, particularly in the Bekaa Valley, are conducive to cannabis cultivation, enabling economies of scale, i.e. reduce costs as production rises. According to Habchi, Lebanon’s production costs a mere fifth of Canada’s, which gives Lebanon a competitive advantage over other countries.
In terms of usage, numerous cannabis-based medicines receive annual approval from public authorities in industrialized nations, with many more currently undergoing trials. “Several international studies have confirmed the benefits of legalization, promising a lucrative market for therapeutic cannabis in Lebanon,” asserts Habchi.
Dynamic Market
Global cannabis production currently falls short of demand, leading to upward pressure on prices. Legalization would attract producers into legitimate channels, fostering competition and innovation.
Beyond pharmaceuticals, legalization could stimulate related industries like textiles (for hemp fibers), agro-food (for edible cannabis products), and technology associated with cultivation or distribution. This diversification would bolster the economy by creating specialized niches for Lebanese businesses.
Unleash the Private Sector
The challenge lies in securing the necessary capital for sector investment. Given Lebanon’s favorable conditions, numerous private firms are keen to invest, offering a healthier alternative to potential private or state monopolies — realizing that the state lacks the financial, technical or human capacity for such ventures.
Knowing that competition compels companies to adapt to the needs of their clients, Habchi laments the absence of a regulatory framework empowering the private sector. “The law was enacted four years ago; what’s impeding its implementation?” he queries.
Moreover, legalization would encourage research and innovation, fostering ancillary industries and expertise.
A Boon for Farmers
Legalization would create jobs and opportunities for farmers, particularly in disadvantaged regions, freeing them from current trafficking constraints. Anticipated exports, potentially reaching $1 billion, could bolster the trade balance.
State’s Role?
Legalization for medicinal purposes could boost tax revenues, given that the current illegal production contributes nothing to state coffers.
Regulations should be minimal, as excessive barriers favor large corporations, stifling competition.
Economist George Stigler (Nobel Prize winner in 1982) argued that public regulatory agencies often end up being “captured” by the entities they are supposed to regulate and ultimately advance the interests of those entities. Unfortunately, we all know who holds sway in Lebanon, so we cannot expect much from the potential creation of such public agency.
mario.chartouni@icibeyrouth.com