[Edaily Reporter YU JIN-HEE ] “We expect this year’s revenue to reach 15 billion won (3 billion won domestically, 12 billion won overseas), more than tripling last year’s figure. This is the result of having firmly demonstrated the competitiveness of our cannabidiol (CBD) materials in the U.S. market. Next year, with the addition of medical cannabis revenue, we aim to reach the 20 billion won mark and, using this as a springboard, successfully list on the KOSDAQ market.”

Kim Jeong-guk, President of NeoKen Bio, stated this in an interview with Edaily on the 20th, saying, “Last year, we generated total revenue of 4 billion won—1 billion won domestically and 3 billion won overseas—confirming the business viability of cannabidiol (CBD) ingredients; this year, we have proven our competitiveness in the global market.”

Competitiveness of

Raw Materials Proven Overseas… Rapid Growth Centered on the U.S. and Japan

NeoKenBio was launched in 2021 as a technology spin-off company of the Korea Institute of Science and Technology (KIST). It possesses platform technology for the high-purity extraction and processing of cannabidiol (CBD), the key active ingredient in medical hemp. Moving beyond its previous R&D-centric structure, the company is achieving tangible results by targeting overseas markets where regulations have been proactively relaxed. NeoKenBio’s steep revenue growth is being driven by its expansion into global markets such as the U.S. and Japan. While commercialization in South Korea is constrained by institutional limitations, overseas markets are rapidly opening up.

CEO Kim explained, “We are increasing profitability by leveraging the local infrastructure in the U.S., where cannabis regulations are relatively lenient,” adding, “We directly produce cannabidiol for use in food and cosmetic ingredients, supplying it within the U.S. while also exporting it to Japan.”

Previously, NeoKenBio proactively entered the U.S. market—where regulatory barriers are low—and established a local production base. The company adopted a strategy of supplying high-purity CBD raw materials produced in the U.S. to domestic cosmetics and food manufacturers while also exporting them to Japan, which has emerged as Asia’s largest consumer of hemp.

President Kim said, “We have begun a full-scale push into the Japanese market based on finished products and raw materials manufactured in the U.S.,” adding, “Japan already permits the widespread use of cannabidiol in the food and cosmetics sectors, so demand is very high.”

He continued, “Last week, we participated in a local food exhibition in Japan and held discussions regarding large-scale supply agreements,” adding, “We expect to announce results related to overseas supply contracts to the market in the near future.”

The company’s proven ability to generate profits in overseas markets is leading to the expansion of its domestic production infrastructure. With Andong, North Gyeongsang Province, as its base, NeoKenBio is building a full-cycle ecosystem that encompasses everything from hemp cultivation to raw material extraction and the production of finished pharmaceutical products.

As part of this effort, NeoKenBio recently signed a memorandum of understanding (MOU) with North Gyeongsang Province and Andong City for the “Andong Specially Controlled Medicines Value Chain Construction Project,” valued at 175 billion won. Under the agreement, the company plans to expand its smart farm cultivation facilities and manufacturing infrastructure through phased investments by 2030.

President Kim explained, “This project is a large-scale initiative being carried out in cooperation with local governments,” adding, “Gyeongsangbuk-do is currently taking the lead in actively pursuing the attraction of regional revitalization funds and public policy funds.”

He also emphasized, “The process of securing stable investment funds through fund reviews is proceeding smoothly,” adding, “Once the Andong production hub is completed, it will establish Asia’s largest hemp value chain that meets global regulatory standards.”

NeoKenBio is also constructing a Good Manufacturing Practice (GMP) facility for pharmaceutical products by initially investing 10 billion won within the Andong Bio 2nd General Industrial Complex. This will be Korea’s first manufacturing facility dedicated exclusively to hemp active pharmaceutical ingredients (APIs).

To secure global competitiveness, the company has also extensively adopted engineering capabilities and automation technologies. Partnering with the global engineering firm Atkins Realis, it has implemented designs compliant with European Union Good Manufacturing Practice (EU GMP) and Good Agricultural and Collection Practice (GACP) standards. It has also established a state-of-the-art process control platform from Yokogawa Electric Korea to enhance the reliability of process data and regulatory compliance capabilities.

President Kim predicted, “Once the plant is completed next year, we will have the only system in Korea capable of producing commercial-grade hemp,” adding, “We will secure an exclusive position to supply high-quality raw materials as soon as the domestic hemp market opens.”

Countdown to

Domestic Regulatory Relaxation… Securing a Leading Position in the Domestic Hemp Market Next Year

There are signs that the regulatory barriers that have long held back the domestic hemp industry are set to be lifted. This follows the formation of a consensus between the National Assembly and the Ministry of Food and Drug Safety (MFDS), the competent authority, on amending laws to legalize hemp. Currently, a bill to amend the Act on the Control of Narcotics is pending before the National Assembly’s Health and Welfare Committee. The bill, proposed by lawmakers from both the ruling and opposition parties, allows for the manufacture, import, and distribution of cannabis-derived medicines for self-treatment purposes.

Positive signals were also detected during the National Assembly’s parliamentary audit held last September. In response to questions from members of the National Assembly’s Health and Welfare Committee, MFDS Commissioner Oh Yu-kyung acknowledged the need for improvements to hemp-related regulations and expressed her intention to cooperate proactively on the legislative amendments.

CEO Kim stated, “It is a very significant step forward that the Ministry of Food and Drug Safety has acknowledged the need for legislative amendments on its own initiative and is stepping forward to support the legislative process,” adding, “If the bill is passed during the current National Assembly session, legalization will bear fruit as early as the end of this year or, at the latest, in the first half of next year.”

If domestic regulations are lifted, the market for medical-grade hemp raw materials is expected to experience explosive growth. Since NeoKenBio has already proactively established world-class GMP production infrastructure, it is expected to be the biggest beneficiary of the market opening.

President Kim noted, “The domestic market is scheduled to open initially for medical purposes only,” adding, “NeoKenBio is the only company equipped with active pharmaceutical ingredient (API) production facilities that meet regulatory approval requirements.”

He further noted, “Pharmaceutical companies will seek high-quality CBD raw materials to develop treatments for intractable rare diseases such as epilepsy and dementia,” and stated, “Our primary goal is to generate over 5 billion won in new revenue from the domestic medical sector alone in the first year of regulatory reform.”

Building on its explosive sales growth and expanded production infrastructure, Neoken Bio is accelerating its efforts toward an initial public offering (IPO). The company has selected Mirae Asset Securities as its lead underwriter and is proceeding with preparations for a KOSDAQ listing. It is exploring various pathways—including a technology-based special listing and a performance-based general listing track—to determine the optimal timing for the public offering.

President Kim said, “We will firmly demonstrate our financial stability by achieving 15 billion won in revenue this year,” adding, “If the expansion of overseas sales and our entry into the domestic hemp market coincide next year, we expect to surpass 20 billion won in annual revenue.”

Following the listing, the company has established a roadmap to evolve beyond a mere raw material supplier into a global Contract Development and Manufacturing Organization (CDMO) and an innovative new drug developer. In the case of “Epidiolex,” a CBD-based epilepsy treatment developed by the UK’s GW Pharmaceuticals, the drug has generated annual prescription sales in the hundreds of billions of won since receiving approval from the U.S. Food and Drug Administration (FDA) in 2018. For domestic patients, the annual medication cost per person reaches approximately 40 million won, making the development of a domestically produced alternative an urgent priority.

NeoKenBio is developing a generic version of Epidiolex using its proprietary microwave extraction process. The company plans to significantly lower the drug’s price compared to existing imported medications, thereby reducing the financial burden on patients and contributing to the financial stability of the national health insurance system.

CEO Kim stated, “Active ingredients derived from hemp hold boundless potential for the development of treatments for intractable neurological disorders,” adding, “Based on the sales momentum we’ve built in the U.S., our large-scale production base in Andong, and the funds to be raised through our KOSDAQ listing, we will firmly establish ourselves as Asia’s No. 1 and one of the world’s top 10 specialized companies in controlled substances.”

Meanwhile, according to the global market research firm Research and Markets, the global hemp market was valued at $27.7 billion (approximately 36.7995 trillion won) in 2022. It is projected to expand to $82.3 billion (approximately 109.3355 trillion won) by 2027. More than 60 countries worldwide, including the United States, Canada, and Germany, have already legalized hemp.