Industrial Hemp I: Due to Wide Applications and Loosened Policies, The Future Market Is Broad

Industrial hemp is a very good cash crop. It has a short growth cycle and only takes 110-130 days to grow; it has high unit profitability, with a profit of over 10,000 yuan per hectare after harvesting, far exceeding that of ordinary crops such as corn; high added value, the flowers, leaves, seeds, stems.

Cannabinoids are compounds in the cannabis plant, all of which are cannabinoids. THC is the main component that causes mood changes. It binds to CB1 receptors in the human body and is psychoactive. However, the function of the CBD is very different. It does not directly bind to CB1 receptors and has a calming and relaxing effect. With the deepening of research, the use potential of CBD in industrial hemp has been explored. The application scope covers food, beverages, textiles, and medicines. It has been applied to tens of thousands of commodities in 14 industries.

Sector with Huge Potential: Medical

In medical treatment: Cannabis plant contains more than 400 kinds of chemical components, many of which can be widely used in the medical field; Mosaic extract is mainly used in the medical field. The mosaic of industrial hemp contains cannabinoids and non-cannabinoids. It is widely used in the medical field. Both THC and CBD are cannabinoids. THC is the main component that causes mood changes. CBD is different from THC in that it has non-psychoactive and has a great influence on the treatment level. At the same time, CBD can also reduce the mental stimulation of THC and has a higher medicinal value.

At present, the three major effects of CBD have been pharmacologically confirmed by a well-known European institution. The three major effects are anti-anxiety, pain relief, anti-inflammatory, and anti-epileptic. Three major effects have been confirmed pharmacologically. In terms of anti-anxiety, CBD activates adenosine receptors, which are important regulators of other neurotransmitters such as dopamine and glutamate in the brain, and can not only cause pleasant feelings but also affect sleep, mood, memory, and concentration to achieve the effect of anti-anxiety. In terms of pain and inflammation, CBD has better pain and anti-inflammatory effects than aspirin. It mainly exerts analgesic and anti-inflammatory effects through dual inhibition of cyclooxygenase and lipoxygenase. In terms of anti-epileptic, the anti-epileptic effect of CBD is mainly reflected in two aspects. One is that it can help improve the efficacy of other anti-epileptic drugs. Another one is that CBD can suppress brain excitement by controlling the consumption of GABA neurotransmitters, thereby reducing seizures.

CBD has a wide range of medical applications. Potential medical applications include muscle spasms, Alzheimer's disease, Parkinson's disease, bronchiectasis, and glaucoma treatment.

Industrial Hemp Is Widely Used in Industrial Fields

More than 50,000 hemp products have been developed in countries all over the world. For example, hemp fiber can be made into high-end textiles, the roots of hemp can be used as raw materials for non-toxic coatings and polishes, and branches and leaves can be used as fertilizers for plant insecticide and epidemic prevention; In 2018, the global hemp-based textile market was worth 1.08 billion U.S. dollars. The compound growth rate of hemp fiber sales is expected to be 15% in the next three years, and the industrial hemp market used in the textile industry will reach US$2.25 billion in 2023.

Health and Wellness Support Market Growth for Cannabis Beverages

Hemp seeds can be used as food and feed, in which CBD can be an additive for ordinary beverages, functional beverages, and nutritional products. In 2017, the market size of cannabis-added sports drinks was 40 billion yuan. The U.S. cannabis beverage market is expected to grow to US$1.4 billion in 2024, with a compound growth rate of 58% from 2018 to 2024. According to the compound growth rate of the U.S. market, the global cannabis beverage market space in 2024 is estimated to be about 600 billion yuan. The market space of industrial hemp used in the field of alcoholic beverages is 1 trillion yuan.

Policies of Various Countries Have Been Loosened

With the continuous advancement of cannabis research, the cannabis policy is gradually loosened. Due to the drug properties of marijuana, it has been gradually banned globally since the 1920s. In 1988, the United Nations stipulated that cannabis plants containing less than 0.3% THC have no value for extracting THC toxic components, and are not directly used for drug ingestion and industrial use. The establishment of this clause announced that the development and utilization of the hemp industry has entered a new era. Since then, countries around the world have increased the development of the industrial hemp industry.

On February 29, 2016, Australia legalized the cultivation of cannabis for medicinal and related research purposes. Australia becomes a leader in medical marijuana.

In 2017, cannabis extraction drugs were legal in Germany, and people with multiple sclerosis and other serious diseases can legally obtain the drug with a prescription.

On November 26, 2018, South Korea became the first country in East Asia to legalize medical marijuana;

On December 25, 2018, medical marijuana was allowed in Thailand.

In October 2018, Canadian cannabis was fully legalized, and the legalized cannabis market adds 12.7 billion to 22.6 billion Canadian dollars in economic income each year. Hemp has become Canada's main economic crop.

At present, marijuana is not legal in the United States. It has been fully legalized in 15 states and the District of Columbia, and medical marijuana has been legalized in 35 states and the District of Columbia. This has a lot to do with FDA approval. According to US law, if a substance is used as a drug from the beginning, it cannot be regulated as a dietary supplement. Therefore, CBD products must go through the standard process of drug clinical trials. As a result, only a few CBD products are approved in the United States. The FDA's attitude is contrary to the spirit of the "New Farm Act" signed by US President Trump in 2018. The "New Farm Act" removed CBD extracted from industrial hemp from the list of controlled substances for the first time, and legalized industrial hemp CBD and industrial hemp with a THC content of less than 0.3% at the federal level. The FDA's actions led to unclear short-term policy prospects.

Besides, encouraging policies have been taken in China. In 2019, Yunnan province has been approved to develop the industrial hemp industry under the guidance of the Provincial Academy of Agricultural Sciences. At present, China has four provinces including Yunnan, Heilongjiang, Jilin, and Shanxi that can develop the industrial hemp industry under the guidance of the Provincial Academy of Agricultural Sciences. Since the beginning of 2019, the issuance of licenses for cannabis cultivation and processing in China has accelerated significantly, and a number of listed companies have been allowed to participate in production.

China's industrial hemp is built on a complete supply chain, with product advantages and price advantages highlighted. China has unique conditions of cultivation-fertile land and suitable climate for industrial hemp, which have made China the world's largest industrial hemp cultivation country, accounting for more than 50% of the area. From 2011 to 2018, the sown area of industrial hemp in China increased sharply from 4,500 hectares to 18,560 hectares, with a CAGR of 22%; production increased from 13,400 tons to 105,200 tons, with a CAGR of 34%.

With the functions of calming, soothing, repairing, and medicinal value of CBD, the consumer application of industrial hemp is expected to emerge in medical rehabilitation, functional health care, and industrial materials. The multi-faceted application market provides multiple development windows for industrial hemp brands.

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