What is Hemp?

Hemp is an easily renewable resource that can be converted into over 50,000 products. Restoring hemp to nature can power jobs and businesses in real estate, farming, fashion, medicine, building materials, recreation, and other fields. Hemp is known as the new trillion-dollar crop which can be refined into a variety of commercial items, including paper, textiles, clothing, biodegradable plastics, paint, insulation, biofuel, food, and animal feed. It dates back to 8000 B.C. and has been used by major brands to produce varieties of products.

Chinese have been using it as medicine since 2700 BC. Henry Ford made a car in 1941 from hemp which was 10 times stronger than steel and it was originally made to run on hemp fuel. Mercedes, Audi, and BMW have average 20 kg of hemp in each car and Giorgio Armani grows its own hemp. Top fashion brands like Ralph Lauren, Calvin Klein, H&M and Patagonia, etc. are making collections from hemp. First jeans of Levi’s was made from hemp and it has again started making hemp jeans.

Every part of the hemp plant, be it seed, stalk or flower, has the potential to be commercialized. Hemp flower is used for medicinal or recreational products. Below table shows the suggestive list of hemp seed and stem products:

Use of Seeds

Industrial products

Foods

Body Care

Oil paints

Hemp seed oil

Soaps

Varnishes

Hemp protein powder

Shampoos

Printing inks

Food supplements

Lotions

Fuel & Bio-fuel

Hemp seed hearts

Balms

Solvents

Hemp chocolates

Sunscreens

Coating

Hemp Peanut Butter

Other Cosmetics

 

Use of Stalk

Textile

Paper

Industrial textile

Building materials

Clothing & Denim

Printing

Rope

Fibreboard

Diapers

Newsprint

Canvas

Insulation

Handbags

Cardboard

Netting

Acrylics

Shoes

Packaging

Moulded parts

Fibreglass substitute

 

Global Opportunity

Global hemp products market is expected to grow from USD 4.58 billion to USD 5.73 Billion by 2020 at a compounded annual growth rate of 40%. Last year, hemp sales, without being completely legal in the U.S., reached USD820 million, according to the Hemp Business Journal. These sales have been projected to reach USD 2.1 billion by 2020 and that's without taking into account the passage of the Farm Bill. This shows huge market potential for players in this industry.

Presence in India

Unfortunately, currently, India has a minuscule share in the multi-billion global hemp market. There are only a few players in Indian hemp industry like Bombay Hemp Company (Boheco), Hempsters, Health Horizons who are trying to establish the image of hemp in India. With a variety of product lines and minimum entry barriers, Indian hemp industry offers huge opportunities that can be tapped by new players in this field.

Demand Drivers

Hemp offers immense health benefits and medicinal uses ranging from boosting the immune system to impending developments and curing degenerative diseases and neurological disorders. In addition, Hemp’s anti-inflammatory effects can also help the progression of Rheumatoid Arthritis(RA), to slow down or stop. These effects could also reduce several other inflammation-related RA symptoms, such as fatigue and fever.

Hemp is also known as the strongest natural fibre, which is why it is used in cars and construction of houses. Hemp clothes are best suited to summers, are chemical-free and eco-friendly. It also serves several beauty benefits as it moisturizes the skin and protects it from ache and UV rays. It is also a good source of magnesium, dietary fibre, and protein which makes it a rising star in the food industry. Hemp chocolate and peanut butter are delectable as well as appetizing.

Busting the myth

Hemp is often confused with marijuana, hash or their Indian counter-parts “Ganja” or “Charas”. The psychoactive components, tetrahydrocannabinol (THC) and cannabidiol (CBD), are the main distinguishers between industrial hemp and marijuana. Industrial Hemp has lower concentrations of THC and higher concentrations of cannabidiol (CBD), which decreases or eliminates its psychoactive effects. The legality of industrial hemp varies widely between countries. Some governments regulate the concentration of THC and permit only hemp that is bred with an especially low THC content. 

According to a report by the World Health Organization, “CBD is a component of marijuana (one of the hundreds) but it does not by itself cause a “high” in humans. CBD exhibits no effects indicative of any abuse or dependence potential to date and there is no evidence of public health-related problems associated with the use of pure CBD.”

The hemp seed has nothing to do with marijuana and there is no association between the two. The hemp seeds are free of THC and CBD except for the trace amount that might be found due to crossover contamination as the seeds are being processed. The same applies to hemp leaves as well.

Legal status in India

Hemp enjoyed a full-scale market in India before 1985 when the Rajiv Gandhi government came up with a law conforming to the 1961 treaty: the narcotic drugs and psychotropic substances Act (NDPS). NDPS specified that cannabis meant charas (the resin extracted from the plant), ganja (the flowering or fruiting tops of the plant) and any mixture or drink prepared from either of the two permitted forms of marijuana. However, it spared hemp leaves and seeds from the stigma of the contraband. Thus, NDPS allows people to smoke pot or drink bhang so long as they can prove that they had consumed only the leaves and seeds of the cannabis plant.

The Government of India is encouraging research and cultivation of cannabis with low THC content. Last year, the Uttarakhand government announced legalization of hemp cultivation and sanctioned license to the Indian Industrial Hemp Association (IIHA) to grow the fibre on 1000 hectares. In May 2019, Himachal Pradesh government an official statement that proposed cultivation of cannabis for medicinal purposes. In July 2019, a new plea was filed in Delhi high court to decriminalize cannabis in India. Regulatory issues concerning medicines based on cannabis are not available yet in India and efforts are on to make that achievable. 

India’s leading Ayurveda-based products maker, Patanjali, has also taken part in the race to ace cannabis research. It has now taken a cue from western countries where the legal cannabis economy is booming.

Funding Into This Sector

This year the industry has raised capital at more than 10 times the pace seen last year which showcases investors’ inclination into this sector. The industry has received about USD 137 million funding this year out of which USD 1 million was received by Indian player BOHECO. Investments by prominent names such as Ratan Tata, chairman emeritus of Tata Sons, Rajan Anandan, Google India’s managing director, MA Tejani of Gits Food, Srinivas Sirigeri of Shakti Group, Nikhil Velpanur, an angel investor provide proof of concept for this trillion-dollar crop.