South Korea’s Cannabis Market Projected at $527M by 2029: Asia’s Next Frontier?

What does this mean for the global cannabis industry?

When South Korea amended its Narcotics Control Act in November 2018, it made history as the first country in East Asia to legalize medical cannabis. The move was quiet, carefully controlled, and largely overlooked by Western media fixated on Canada’s full legalization that same year. Yet seven years later, the South Korea cannabis market is on a trajectory that demands attention from global investors, pharmaceutical companies, and cannabis operators eyeing the Asia-Pacific region.

According to Statista’s market forecast, South Korea’s cannabis market is projected to reach US$527.8 million by 2029, growing at a compound annual growth rate (CAGR) of 2.75% from a 2024 base of US$460.8 million. While that growth rate appears modest compared to North American markets, the significance lies in context: this is a market emerging within one of the world’s strictest drug policy environments, powered by a $1.8 trillion GDP economy with world-class pharmaceutical infrastructure and a population increasingly open to therapeutic cannabis applications.

For companies focused on commercializing cannabis products internationally, South Korea represents an opportunity defined not by speed but by durability — a regulated, high-barrier market where first-mover advantages can be substantial and long-lasting.

South Korea Cannabis Market: Size, Segments, and Projections

The South Korea cannabis market is not monolithic. It comprises distinct segments — medical cannabis, CBD products, and industrial hemp — each with its own regulatory track, growth dynamics, and competitive landscape.

Market Revenue Breakdown (2024–2029)

Sources: Statista Market Forecast; Grand View Research

Key Market Metrics

The medical cannabis segment dominates the market, accounting for approximately 62% of total revenue. CBD products, while smaller in absolute terms, are growing at a faster rate (4.7% CAGR) and represent the segment with the most immediate commercial opportunities for international companies, particularly in pharmaceuticals and, with regulatory evolution, potentially in cosmetics and wellness.

The Regulatory Framework: From Prohibition to Controlled Access

Understanding the South Korea cannabis market requires understanding a regulatory framework that is simultaneously pioneering and restrictive. South Korea maintains some of the harshest drug penalties in Asia — possession of even small quantities of recreational cannabis can result in up to five years in prison — yet it carved out a medical pathway that no other East Asian nation had attempted at the time.

The 2018 Narcotics Control Act Amendment

In January 2018, National Assembly member Shin Chang-hyun introduced a bill to revise the Narcotics Control Act. The bill proposed allowing individuals with specific medical conditions to use cannabis-derived pharmaceuticals with approval from the Ministry of Food and Drug Safety (MFDS). By July 2018, the MFDS signaled its support, and on November 23, 2018, the National Assembly approved the amendment.

How Medical Access Works Today

The current framework operates through an orphan drug importation pathway:

1. Physician Prescription: A doctor prescribes one of three approved cannabis-derived pharmaceuticals.
2. Application to Korea Orphan Drug Center: The patient applies through this specialized agency.
3. MFDS Approval: Each case is reviewed and approved individually by the Ministry of Food and Drug Safety.
4. Importation: The approved product is imported on a case-by-case basis.

Approved Pharmaceutical Products

It is critical to note that raw cannabis flower, natural extracts, and non-pharmaceutical CBD products remain prohibited. The system is pharmaceutical-only, and access remains highly restrictive. For companies navigating these complex cannabis regulatory frameworks, understanding South Korea’s case-by-case approval model is essential.

The 2025 Supreme Court Ruling: A Tightening of Controls

In a landmark ruling in June 2025, South Korea’s Supreme Court reversed lower court decisions and upheld a ban on importing CBD for cosmetic use. The court determined that CBD — regardless of whether it is extracted from hemp stems or other exempted plant parts — constitutes hemp under the Narcotics Control Act. The ruling stated that "the Narcotics Control Act considers the main ingredients of hemp to be cannabinol (CBN), tetrahydrocannabinol (THC), and CBD," effectively classifying CBD itself as a controlled substance when extracted from cannabis plants.

This decision strengthened the regulatory barrier for CBD consumer products but did not affect the pharmaceutical pathway, which continues to operate under MFDS oversight.

South Korea’s Hemp Industry: Ancient Roots, Modern Ambitions

South Korea’s relationship with hemp stretches back thousands of years. The city of Andong, in Gyeongbuk Province, has been cultivating hemp for textile production since ancient times, and the region’s hemp cloth (sambe) remains a cultural heritage product. This historical foundation is now being leveraged for pharmaceutical-grade production.

The Gyeongbuk Regulatory Free Zone

In 2020, the South Korean government designated the southeastern province of Gyeongbuk (Gyeongsangbuk-do) as a regulation-free zone for industrial hemp. This special economic zone is the only place in South Korea where licensed cultivators can legally grow hemp for export and medicinal purposes, creating a controlled sandbox for the nascent industry.

From Demonstration to Pharmaceutical Manufacturing

The hemp industry in Gyeongbuk has evolved beyond its initial research and demonstration phase. In December 2025, NeoKenBio Co., Ltd. — a participant in the Gyeongbuk Industrial Hemp Regulatory Free Zone — held a groundbreaking ceremony for South Korea’s first GMP (Good Manufacturing Practice) facility dedicated to hemp-derived pharmaceutical raw materials. The facility, located in the Gyeongbuk Bio 2nd General Industrial Complex in Andong, represents a pivotal development.

Key specifications of the NeoKenBio GMP facility:

• Total floor area: 1,530 square meters
• Expected completion: 2027
• Raw material: Industrial hemp with THC content below 0.3%
• Technology: Microwave-based CBD extraction and water-soluble CBD manufacturing
• Output: CBD active pharmaceutical ingredients (APIs)
• Significance: South Korea’s first infrastructure for producing medical hemp APIs domestically

This facility addresses a critical structural barrier: until its completion, the absence of domestic GMP production capabilities has prevented South Korean companies from exporting hemp-derived pharmaceutical ingredients or entering overseas clinical trials. Robust cannabis documentation requirements are fundamental for any operation looking to achieve and maintain GMP certification in markets as demanding as South Korea.

Pharmaceutical Players and Key Companies

The South Korea cannabis market is increasingly attracting interest from domestic pharmaceutical companies, creating a competitive landscape that is maturing rapidly.

Hwail Pharmaceutical

Hwail Pharmaceutical has emerged as one of the most aggressive domestic players in the medical cannabis space. The company has pursued a multi-pronged strategy:

• Acquisition of Cannabis Medical: Hwail acquired a 49.15% stake in Cannabis Medical, a company holding patents related to using medical cannabis for treating degenerative brain diseases.
• Investment in CTC Bio: Hwail made an equity investment in CTC Bio, which has successfully developed a film-type formulation for medical cannabis delivery.
• CBD Extraction Technology: The company is developing high-purity hemp-based pharmaceutical ingredient extraction and refining technology.

NeoKenBio Co., Ltd.

As noted above, NeoKenBio (also referred to as Neocannbio in some sources) is building South Korea’s first hemp pharmaceutical GMP facility in Andong. The company is positioning itself as a vertically integrated player in the hemp API supply chain.

Koru Pharmaceuticals

Koru Pharmaceuticals has developed K-beauty skincare products using a hybrid Korean hemp variant, targeting international markets where CBD cosmetics are permitted. The company represents the intersection of South Korea’s world-leading cosmetics industry and its emerging hemp sector.

International Companies with Exposure

Asia-Pacific Context: How South Korea Compares

The South Korea cannabis market does not exist in isolation. It is part of a broader Asia-Pacific cannabis ecosystem that is evolving rapidly, with several countries pursuing distinct regulatory approaches. Understanding these dynamics is essential for investors and operators evaluating the region.

Asia-Pacific Cannabis Market Overview

Source: Data Bridge Market Research; Grand View Research

Country-by-Country Comparison

Japan’s 2024 Reform: A Catalyst for Regional Change

Japan’s December 2024 amendment to its Cannabis Control Law is the most significant regulatory shift in Asian cannabis since South Korea’s 2018 legalization. The reform introduced two major changes:

1. Criminalization of cannabis use: Previously, possession was illegal but use without possession was technically not an offense. This loophole has been closed.
2. Medical cannabis pathway: Cannabis-derived pharmaceuticals, particularly CBD-based drugs, can now be developed and prescribed, opening a potential market in the world’s third-largest economy.

Japan has imposed some of the strictest THC residue limits globally (10 ppm for oils, 1 ppm for edibles, 0.10 ppm for aqueous solutions), creating a high-compliance environment that will favor pharmaceutical-grade producers — including potentially those operating from South Korea’s Gyeongbuk zone.

Building international cannabis partnerships across the Asia-Pacific will be essential as these markets mature, and companies that establish GMP-compliant supply chains now will be well-positioned to serve both the Korean and Japanese markets.

Challenges and Opportunities

Challenges

Severe Social Stigma: South Korea maintains deeply conservative attitudes toward cannabis. Public perception remains overwhelmingly negative, with cannabis use carrying significant social consequences beyond legal penalties. This stigma extends to hemp-derived products, limiting domestic consumer markets.

Restrictive Regulatory Environment: The case-by-case approval process for medical cannabis creates bottlenecks. Only three pharmaceutical products are currently approved, and the 2025 Supreme Court ruling classifying CBD as a narcotic has narrowed the pathway for consumer CBD products.

Limited Patient Access: The orphan drug importation pathway is cumbersome and expensive. Patients must navigate a multi-step approval process, and the cost of approved pharmaceuticals remains high with limited insurance reimbursement.

China Export Ban: South Korea’s world-leading cosmetics industry (K-beauty) cannot readily incorporate CBD into products destined for China, which banned CBD in cosmetics. Given that China is one of K-beauty’s largest export markets, this significantly constrains the commercial potential of hemp-derived cosmetic ingredients.

Extraterritorial Drug Laws: South Korean citizens can be prosecuted under domestic law for cannabis use abroad, creating a chilling effect on industry participation and public advocacy.

Opportunities

Pharmaceutical-Grade Manufacturing: The establishment of GMP facilities in Andong positions South Korea as a potential hub for pharmaceutical-grade cannabis APIs, serving both domestic demand and export markets across Asia.

Japan Market Access: With Japan opening a medical cannabis pathway under extremely strict quality standards, South Korean producers operating under GMP certification could become preferred suppliers given geographic proximity and regulatory alignment.

K-Beauty Innovation: Despite current restrictions, the global CBD cosmetics market is growing, and South Korean cosmetics companies are well-positioned to develop hemp-derived products for export to less restrictive markets.

Advanced Technology Infrastructure: South Korea’s strengths in biotechnology, precision agriculture, and manufacturing create natural advantages for cannabis pharmaceutical production that few Asian competitors can match.

First-Mover Advantage in East Asia: As the first East Asian country to legalize medical cannabis, South Korea has a seven-year head start in building regulatory expertise, clinical data, and supply chain infrastructure.

How GrowerIQ Supports Asia-Pacific Cannabis Operators

As the South Korea cannabis market and the broader Asia-Pacific region continue to develop, the demand for robust seed-to-sale tracking and compliance management systems is growing in parallel. GrowerIQ’s platform is built to meet the exacting standards that markets like South Korea require.

Compliance-First Architecture

South Korea’s pharmaceutical-only medical cannabis framework demands rigorous documentation, batch tracking, and quality assurance — exactly the capabilities that GrowerIQ’s seed-to-sale platform delivers. From cultivation analytics through final product tracking, every data point is captured and auditable.

GMP-Ready Documentation

For operators targeting pharmaceutical markets, GrowerIQ provides CFR Part 11-compliant digital signatures, automated batch records, and comprehensive reporting tools that align with GMP requirements. As NeoKenBio and other Korean companies build out pharmaceutical manufacturing infrastructure, the need for validated digital systems becomes non-negotiable.

International Market Support

GrowerIQ already supports cannabis operations across multiple regulatory jurisdictions. Whether navigating South Korea’s MFDS requirements, Japan’s new THC residue limits, or Australia’s TGA framework, the platform adapts to meet local compliance standards while maintaining a consistent operational backbone.

Cultivation and Quality Analytics

With South Korea’s hemp cultivation concentrated in the Gyeongbuk special zone and subject to strict THC limits (below 0.3%), real-time cultivation analytics and quality monitoring are essential. GrowerIQ’s cultivation management tools provide the data visibility operators need to maintain compliance and optimize yields.

For a broader perspective on the global cannabis landscape and how markets like South Korea fit into the worldwide picture, explore these key facts about the global cannabis industry.

This analysis is current as of May 2026 and draws on Statista and Grand View Research market forecasts, Korea Biomedical Review, and Cannabis Science and Technology reporting, alongside South Korean regulatory sources. Market figures reflect the best available data as of the publication date.

Sources

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• Medical Cannabis – South Korea | Statista Market Forecast
• CBD Products – South Korea | Statista Market Forecast
• South Korea Cannabidiol Market Size & Outlook, 2024-2030 | Grand View Research
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