China Launches Industrial Hemp Market at 0.3% THC to Produce CBD for Medical and Wellbeing purposes

Soline Doyle
Apr 20 · 5 min read

Whilst China quietly grows into a cannabis superpower … where does the EU stand?

The earliest record of man’s use of hemp fibre comes from the island of Taiwan, located off the coast of mainland China. In fact, some of the earliest archaeological hemp evidence, about 10,000 B.C., comes from rope imprints on broken Chinese pottery. Fragments of hemp cloth have also been found in Chinese burial chambers dating from the Chou Dynasty (1122–249 B.C.).

Over the past century, hemp has been sidelined. After the establishment of the People’s Republic, the Communist Party-led government classified the plant as an illicit drug and introduced some of the world’s toughest cannabis laws. But that is now a matter of the past. Indeed, in their search for alternatives to cotton, China’s scientific, political and industrial communities are rediscovering the potential of hemp. As the European Industrial Hemp Association points out, ‘cotton is increasingly causing environmental problems due to its enormous need for water, soil, salinization and the use of pesticides’.

Hemp plantations are now flourishing all over the country. For the farmers, the crop is green gold — hemp brings in more than 10,000 yuan (US$1,500) per hectare, compared to just a few thousand yuan for more common crops like corn. Recently, the Chinese province of Heilongjiang started producing hemp on a large industrial scale. In 2017, the area on which hemp is cultivated has grown from 2,500 to more than 75,000 hectares in the province of Heilongjiang alone.

A group of workers harvests hemp at a farm near Beijing. Photo: Alamy

Through encouraging the production of industrial hemp, China also plans on producing CBD for health and wellness purposes. Cannabidiol (CBD) and Tetrahydrocannabinol (THC) are two of the most well-known cannabinoids in the hemp plant. Contrary to THC, CBD has no psychoactive effects whatsoever. CBD has been recognized for its many benefits, including pain relief. CBD is also being used by many patients suffering from conditions such as epilepsy. Combined with a very small quantity of THC, the effects of CBD are much stronger. This is the reason why China recently allowed the production of hemp at 0.3% THC.

Last January (2019), Zhejiang Conba Pharmaceutical Co Ltd (CONBA) announced that they had managed to obtain several permits to grow hemp. The Chinese government started by allocating 200 hectares to the project. However, the ‘experimental phase’ did not last long. Indeed, 1600 hectares have now been allocated to CONBA. This shows that China is moving strategically on the medical cannabis market. China’s move from an ‘experimental’ to a pre-industrial phase is proof that the country has understood the economic potential of the hemp industry. Considering that the stock price of hemp has gone up by a booming 38.79% since January 1st 2019, this is not at all surprising.

However interesting this might be, China’s strategic move also means something from an EU perspective: new competition. We all know how fast China can move when it spots an economic opportunity. We also know that moving quickly is unfortunately not the EU’s strong suit. Moreover, the US and Canada already have their own big firms and are slowly but steadily conquering the hemp market from the other side of the Atlantic. It is only through the creation of a true pan-European hemp market that we will be able to compete with them.

2017 Worldwide Distribution of Industrial Hemp

So what is the European Union doing? On April 2nd, 2019, the AGRI Committee in the EU Parliament voted on a Strategic Report by MEP Herranz Garcia from Spain (EPP) in which the European Industrial Hemp Association (EIHA) had inserted several amendments.

One of those amendments included increasing the THC level in the hemp seeds allowed for planting from 0.2% to 0.3%.

Source: ACTIVE

At ACTIVE, we’re admirative of the EIHA which has been extremely efficient in suggesting game-changing measures for our industry. However, the amendments still need to be voted by the EU Parliament during one of its plenary sessions. The Plenary Sessions of the European Parliament represent the culmination of the legislative work done in the committees and the political groups. These sessions are where the Parliament formally sits to vote on EU legislation and adopts its position on political issues. There are twelve annual plenary sessions in Strasbourg.

Only an EU-wide harmonization of hemp-related products will enable us to compete internationally in an extremely effective way.

With the upcoming European elections, it is crucial for hemp-extracts including CBD to be on everybody’s agenda. Indeed, the plenary session where the amendments will be discussed will most probably take place next September 2019. By then, new MEPs will have been elected…! This is our chance to give our farmers and entrepreneurs the opportunity to thrive and compete internationally with higher quality products — let’s make our European hemp and cannabis industry worthy of rubbing shoulders with the best!

About Us

ACTIVE (Association for Cannabinoids, Terpenes, and Innovative Ventures in Europe) is the first pan-European trade association for cannabinoids and terpenes uniting companies, scientists, thought leaders, and investors in key European markets. We protect, educate, and connect stakeholders with a stake in medical cannabis and wellness hemp to coordinate a unified voice.

ACTIVEurope

ACTIVE (Association for Cannabinoids, Terpenes and Innovative Ventures in Europe) is the first pan-European CBD trade association to unite companies, scientists, and investors tradeactive.org

Soline Doyle

Written by

Dual Master’s in European Affairs and International Public Policy — Digital, New Technology and Public Policy — Sciences Po Paris/LSE

ACTIVEurope

ACTIVE (Association for Cannabinoids, Terpenes and Innovative Ventures in Europe) is the first pan-European CBD trade association to unite companies, scientists, and investors tradeactive.org

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