One percent THC level is permissible, anything beyond is a question mark.
In a country with age-old traditions of cannabis consumption, the stigma around its usage, for medicinal purposes is a polarized contrast. Isn’t capitalizing on multi-billion dollar economic potential and opportunities presented by Cannabis Sativa and its byproducts as Industrial Hemp wise for India?
Earlier, the Indian Industrial Hemp Association (IIHA) decided to expand its presence in the hilly state of Uttarakhand by planning to make a gigantic investment of $150 million or INR 11OO crores. This is a good sign for a country like India, thereby creating a new economic opportunity for the agricultural sector with the production of hemp.
However, in terms of potential that the country encompasses, the investments and interest in Industrial hemp (iHemp) hasn’t gained traction. Much of the blame forms of the Indian state’s policy on industrial hemp.
Highlights! Why is India failing to capitalize on economic potential presented by Industrial Hemp?
- India has had an ancient history of cannabis consumption.
- Stringent government policies about the expansion of Cannabis Sativa are a hindrance for Industrial Hemp.
- Recognizing the medicinal benefits, many countries lifted the ‘illegal’ tag put on Industrial Hemp.
- Industrial Hemp is widely used to calm down anxiety, fight cholesterol and alleviate blood clots.
Cannabis Proscription in India
The government policies in India are stringent and insurgent about the expansion of the Cannabis Sativa market in the country. Not only are they slacking the benefits of easy access to natural fabrics, but also the unavailability of certain raw materials in the commercial market.
Medical cannabis is the fastest emerging market globally. However, India’s relationship with cannabis can be traced back to 2000 BC. Ancient texts describe the herb as one of the ‘five sacred plants’ (soma). But the subject is now a taboo thanks to Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985. The NDPS act draws from Single Convention on Narcotic Drugs, 1961 which limits possession, import, export, distribution and manufacturing of drugs exclusively to medical use and clubbed cannabis with hard drugs.
Cannabis Outlook Around the World
Back in the 90s, countries like Canada, Australia, Great Britain, Germany, Switzerland, and few others had lifted the illegal tag on Hemp due to its trifling amount of THC percentage and potential industrial demand in the market. Certain countries like China, Russia, and Hungary didn’t even consider putting a ban label.
Lately, in Louisiana US, the agricultural officials started issuing licenses to farmers, logistics and supply and transporters and asked to begin the first hemp production in the state.
Hemp And Marijuana – The Difference
Many consider Hemp similar to Marijuana, which is erroneous and iffy. Despite the visual resemblance and belonging to the same family of Sativa the differentiating point lies in tetrahydrocannabinol (THC) levels. The content of THC in Marijuana is between 3 per cent – 15 per cent (by dry weight), whereas in Industrial Hemp, the THC level is less than 0.3 per cent (by dry weight).
Hemp is a dual-purpose crop offering several benefits. The seeds of the plant contain numerous nutrients and minerals such as amino acids, vitamin E, proteins, dietary fibre, calcium, iron, potassium, sodium and many others.
Potential Benefits of Industrial Hemp
Talking about benefits, Hemp is widely used to calm down anxiety, fighting cholesterol, alleviating blood clots and more. The high content of cannabidiol or CBD in hemp helps in treating nausea, mood disorders, inflammation, chronic pains, seizures too.
As a natural fibre, Hemp is one of the strongest with over 50000 different uses. Several industrial textile products such as ropes, netting, canvas, tarps use hemp. Hemp also provides carbon-negative building materials like fiberboards, fibreglass substitutes, insulation, fuel, varnishes, acrylics and more.
Hemp Clothing is the new sustainable option for the ‘woke’ customers. For example, Bombay based B label by BOHECO (Bombay Hemp Company) studio fashions hemp clothing. It is to keep in mind there is a lack of regulation on hemp fabric in India nudging BOHECO into the clothing business. Chirag Tekchandaney, co-founder, said in an interview, “We bring the fabric and pay duty hence it is a robust model.”
But this is only one such example. The beauty industry, on the other hand, is full of cosmetics, soaps, lotions, balms and more.
Purpose of Investment
With an aim to legalize hemp in major parts of the world, the IIHA decided to step up front and push the right button. The association also planned to put $150 million investment advancement of the industry.
The focus is mostly on key areas such as research, cultivation, solving queries, sharing the knowledge of the product, improving trade, and widening the potential opportunities for Industrial Hemp farmers.
US – The Leading Hemp Importer In The World
Also, the association decided to come to a conclusion by making a contract with the farmers, give them land and labour for lease, and aid them to do better with their lives, said in one of the statements by Rohit Sharma, President of IIHA.
Previous stats show that 46 states were legalized in the United States, but whereas in India, the struggle still continues. Also, the licensed area to grow hemp in the US was 511,442 acres. There are several indicators that evidently explain that the US is leading in the Hemp business. As per the Grand View Research, it is shown that the hemp market size increased from USD 672 million in 2016 to USD 820 million by 2017.
Reports from Hemp Industry Daily states that the sales would soar from $1.9 billion in 2019 to $11.3 billion by 2024. Other reports reveal that the market grows 3.3x times at a faster CAGR of 27.2 per cent, along with CBD sales growth of $430 million by 2022.
Now, the US is relishing several benefits from Hemp by lifting the federal prohibition under the CSA Act 1970 and giving accessibility for the retailers. By 2020, some estimates state that the US will represent 32 per cent of the total market in the world.
What India Is Missing Out On
The US imports Hemp from varied countries such as China, Canada and Europe. When it comes to India, the production is restricted to a very small zone i.e. Uttarakhand. In addition to that, the authorization was given only to grow hemp for the sake of fibre, which further can be used by the textile industry in manufacturing clothes.
Despite having the potential and demand in the Indian market, the legal restrictions are disavowing the true opportunity created by Industrial Hemp products. The government needs to make a separate policy to look after the legal aspects related to cultivation, sales, and returns.
However, by calculating the output per hectare, the economic value creation of hemp would approximately be INR 375,000. But farmers remain unable to relish the true outcome as the permission to obtain other inputs is not granted.
Foreseeing the Demand and the Market
Hemp is a kind of crop that doesn’t require plenty of water to grow. Considering this as a virtue for an agricultural economy like India, the demand for Hemp is huge. The crop has served several purposes in the past. On a positive note, it aided in developing medicines, used in food items & construction purposes, and textiles to manufacturing garments.
Uttarakhand has a dearth of water supply. Cultivating hemp crop could benefit farmers by helping them to earn around 1 lakh on an annual basis. And the revenue earned on the textile business is approximately Rs 240 crores.
Another reason that India should consider Hemp is to boost exports in the country. Hemp grows with the minimal deployment of resources and less cost. Therefore Indian farmers can gain better output and lower their load of migrating one place to another for cultivating.
Proposed THC Level
The IIHA has proposed the THC level of 1.5 per cent to expand the purpose of Hemp. This is the limit quoted for industrial expansion. But the actual admissible THC level remains in between 0.3 per cent – 0.5 per cent only. Policy considers anything beyond that as ‘high’ making consumption illegitimate. The association wants to proliferate the growth of Hemp across the world. It serves numerous benefits to the economic growth.
The governments of Ecuador, Uruguay, Australia, Switzerland have legalized the increase of THC level from 0.3 per cent to 1 per cent. Backing the decree taken by multiple nations, the criminal code mentioned that 1 per cent THC is no more a veto and any misleading and infelicitous issues on hemp crop will be dealt by the National Agrarian Authority.
However, some tropical countries have legalized the cap limit of 1 per cent THC level. In addition, the regulatory authorities are more focused on the negative impact rather than botanical outgrowth. So, if a country has its proper surveillance team keeping check, the use of hemp seeds in the right direction won’t be an issue. But the cap limit crossing 1 per cent would not be admissible in the eyes of any country. Especially on the basis of humanitarian grounds.