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Inside view of the growing facility. Photo credit: LTV Sole Co. Ltd.
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Nousavanh Khounmeuang, co-director, LTV Sole Co. Ltd. Photo credit: Thomas Schmid
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Dr. Payvan Keopraserd (far left), deputy minister of health of the Lao Peoples Democratic Republic. Photo credit: LTV Sole Co. Ltd.
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Indoor growing facility at LTV Sole Co. Ltd. Photo credit: LTV Sole Co. Ltd.
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Racks with cannabis saplings ready for replanting. Photo credit: LTV Sole Co. Ltd.
Government support may lead to broader decriminalization before long.
Laos’ very first commercial tobacco growing company, Bro Asia Lao, had barely gone into full-scale operation when company director and local businesswoman Nousavanh Khounmeuang and her Singapore-based investors were already eyeing the next project. It would be a rather sensational one, too. The plan was to establish a cannabis-growing business with full support from the Lao government.
To achieve that, Nousavanh and her partners drew on the strong government ties that local herbal pharmaceuticals firm LTV (see side bar) had forged over the past decades. LTV itself had already been in negotiations with the authorities over a possible medical cannabis venture at that time, though talks had not made any real progress. When LTV’s then-c.e.o. retired, Nousavanh assumed the position as a sort of informal acting chief executive. After consulting with her Singaporean investors, it was then decided to pick up the stalled cannabis business cue again.
Lengthy negotiations finally bear fruit
“We worked out an enormously comprehensive business plan: how we would set up the farm, from where we’d import the seeds, the hardware and infrastructure installations, how we’d grow cannabis, how we would market the produce, and much, much more,” Nousavanh recalled. “Of course we also had to ensure to let the government know how Laos could benefit from a business like that.” Once LTV introduced Bro Asia Lao as their joint venture partner to the authorities, particularly the Ministry of Public Health, first talks kicked off in June 2023. But Laos is a slow country. Things take time there.
The government warmed up eventually, approving the project in general. Yet there still was a huge stumbling block that needed to be overcome: cannabis is strictly illegal in Laos. However, a solution as extraordinary as it is surprising was found. “We reached an understanding that if the government approved this project, a legal instrument would be issued that would grant the joint venture company that we would set up an exclusive right to grow, harvest, process, and export cannabis… albeit under strict government supervision,” Nousavanh told Tobacco Asia.
Things taking shape
The newly-created joint venture, called LTV Sole Co. Ltd. and formed by Bro Asia Lao and LTV, finally received its full-fledged operating license in December 2023, paving the way to springing into action. As part of the deal, the government allocated a land plot on the outskirts of the Laotian capital, Vientiane. Likewise being part of the agreement, all import duties and other taxes for bringing in construction materials were officially waived for LTV Sole. “It was clear from the beginning that our plants would be grown indoors in hydroponic culture, so we literally imported everything from abroad; the construction parts for our 900 square meter greenhouse, the racks, the grow lights, and of course also the seeds, which we obtained from the US,” Nousavanh said.
First product likely ready by Q2 2025
So far, the project’s investment costs hover around the US$1.5 million mark, divulged Nousavanh. By Laotian standards, it’s a gigantic amount, and all of it was shouldered by the Singaporean partners that already had assisted Nousavanh to get Bro Asia Lao up and going. Profits are elusive at this time, as LTV Sole is still in the testing phase. “At the moment, we are growing 13 different cannabis strains to determine which ones are going to yield the best active substance ratio of THC, CBD, terpenes, and others in Laos’ climatic conditions,” explained Nousavanh. “It’s of utmost importance that our eventual product is of uncompromisingly high quality.” The first harvest is expected to be ready by the second quarter of 2025.
Top quality crucial for securing markets
Achieving high quality is perhaps one of the most crucial aspects of the project altogether. Under LTV Sole’s agreement with the Lao government, none of the produce must remain in the country. “All of it must be exported,” pointed out Nousavanh, adding that only top quality product will find buyers. While neighboring Thailand is the prime export market targeted by Nousavanh, she said that other countries where cannabis is legal are also on her radar. The government would benefit from successful sales, too. “We agreed that the government will receive a certain cut of all export profits generated, though I am not at liberty of disclosing how big that cut actually is,” she said.
Pilot project could lead to full legalization
All indicators suggest that LTV Sole is going to succeed in putting Laos on the world cannabis map. However, even if that should not be the case, Laos cannot lose out. If this pilot project falters, all of its assets will become government property. And if things are going well, it might lead to Laos eventually decriminalizing and legalizing cannabis in the same way Thailand did in 2021. Interested parties are already queueing. According to Nousavanh, Laos’ government has quite recently entered into negotiations with a Chinese state-owned company. “That state firm intends to set up an operation similar to ours, but negotiations are still ongoing at this point,” Nousavanh said. But, as we remarked earlier on in this article, clocks are ticking rather slow in tranquil Laos.
The LTV connection
LTV Co. Ltd. has been a household name in Laos for decades as a manufacturer of a broad range of traditional herbal pharmaceuticals and dietary supplements. The company name apparently stands for “Laos, Thailand, Vietnam,” according to Bro Asia Laos director, Nousavanh Khounmeuang. Due to previous collaborations with the government on numerous projects, LTV had built considerable clout particularly with the Ministry of Public Health. “It was that trust that LTV enjoyed with the government that eventually facilitated our entry into this current cannabis pilot project,” said Nousavanh. “LTV acted like the catalyst for the entire venture, and without them this project might not have taken off the ground at all.”