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The Hemp opportunity

Let's delve into the world of sacred herbs and plants from India. There are 5 of them mentioned in the Vedas. Jasmine, Sandalwood, Neem, Tulsi and Vijaya. While you may be familiar with the first four, you may not have considered Vijaya, or Hemp, as a widely-used plant. However, it has recently gained prominence and piqued curiosity.

So, why are we discussing it today? Well, remember the philosophy of Mad About Markets (MAM) that emphasises India's natural advantage in an industry, the underlying demand drivers of that industry, and the entry of growth, leading to further acceleration? Let's delve into these aspects with regard to the Hemp Industry in India.

India's natural advantage:

Did you know that hemp cultivation in India has a remarkable history dating back to around 5000-4000 BCE? Our ancestors astutely recognised its versatile potential, utilising it not only as an analgesic and antispasmodic but also as a construction material for structures like the Ellora caves. With such an extensive heritage, India naturally possesses a significant advantage in the hemp industry.

Hemp Vs Marijuana

Let's dispel a common misconception about hemp. Unlike marijuana, its notorious cousin, hemp is non-psychoactive, enjoys looser regulations, and is legal in the majority of countries. It has been carefully cultivated to grow tall and abundant in fibre, making it exceptionally versatile for various applications, spanning from wellness and medicine to textiles and biofuels. The key differentiator between hemp and illegal drugs lies in its THC content, the psychoactive component responsible for drug potency.

Hemp is recognised by its THC level, which must be below 0.3 percent to remain legal. One of the most prevalent uses of hemp is through CBD, a compound found in hemp that is utilised in medical and personal care products.

Underlying demand drivers

The demand for hemp has seen a significant surge in recent times. During the pandemic, people turned to hemp products for its various benefits, which fueled its adoption. Indian regulations have started enabling research and medical cultivation, opening doors for further exploration. Furthermore, the legalisation of hemp in several global markets, including the US, EU, and Canada, has attracted players and investments to the sector.

Indian regulations

Let's take a closer look at the regulations governing hemp in India. While the flowering and fruiting tops of the hemp plant remain banned under the Narcotic Drugs and Psychotropic Substances Act, 1985, the leaves, seeds, and stalks are exempt. Medical cannabis is permissible under national law through a license, and CBD oil, manufactured under the Drugs and Cosmetics Act, can be legally obtained and used. As per Drugs and Cosmetics Act: Legal hemp must contain no more than 0.3 percent THC.

In 2018, Uttarakhand and Uttar Pradesh legaliaed the cultivation and farming of hemp. Subsequently, in 2020, cannabis and its derived products were removed from schedule IV of The Single Convention on Narcotic Drugs. Furthermore, in 2021, the Food Safety and Standards Authority of India (FSSAI) permitted the sale and use of hemp seed, hemp seed oil, and hemp seed flour as food items or ingredients. Currently, there are ongoing deliberations on Hemp Policies in Himachal Pradesh and Madhya Pradesh.

Hemp: Superfood?

Hemp seeds are considered a superfood. They are rich in protein, oil, carbs, and insoluble fibre. So Let's explore the vast array of products that can be derived from hemp.

From hemp protein powder by India Hemp & Co, to pain and stress relief oils by Boheco and Mystiq, and even hemp-infused beauty products like Arata's Hempocado Oil and Kaya Hemp Face Masks, the possibilities are endless. Hemp-based textiles, pet care products, and even construction materials are now a reality.

Entry of players and investors

The hemp industry has attracted some big names and exciting start-ups. In 2017, Ratan Tata and Rajan Anandan invested in BOHECO, showing their belief in its potential. Hindustan Media Ventures followed suit by investing in Hemp Horizons in 2022.

And just recently, Nithin Kamath tweeted his conviction to allocate capital to hemp-focused start-ups. We also have India Hemp & Co, Hempstrol, GreenJams, HempStreet, Satliva, Hemp Republic, and many more driving innovation in this space. It is projected that by 2027, we could see around 500 companies working in industries related to hemp.

The Ecomm opportunity

The e-commerce opportunity for hemp products is experiencing a significant upswing! A prominent player in this arena is ItsHemp, an online marketplace that has emerged as a leading force. They offer a diverse selection of over 2,000 products sourced from licensed cannabis manufacturers in Uttarakhand. Whether it's hemp-based food products, cosmetics, or textiles, they have an extensive range of offerings that can be conveniently accessed with a simple click.

Global Hemp market

Finally, let's zoom out and examine the global hemp market. Presently, the Asia Pacific region holds a dominant position, capturing 32.8 percent of the market share in 2022. Moreover, the United States has emerged as a notable player, thanks to the establishment of the U.S. Domestic Hemp Production Program. The global hemp market is experiencing an impressive growth trajectory.

By 2023, it is projected to reach a substantial $9.5 billion and has the potential to skyrocket to an astounding $58.7 billion by 2031. This remarkable growth represents an astonishing compound annual growth rate of 25.6 percent.