China makes most of everything you own. Your phone, your shoes, and even your night lamp likely all come from China. Now, the country wants to grow your weed too. China consists of 34 regions, two of which are quietly growing cannabis for cannabidiol, or CBD, the non-psychoactive cannabinoid so valuable to the medical, health, and beauty industries.
This, despite the fact that cannabidiol is not legal for consumption in China. The country is famous for having some of the strictest drug policies anywhere in the world, and CBD remains unauthorized for use inside it. However, this is likely to change soon enough, but until then, China insists on cashing in on the global cannabis boom, which is proving rather lucrative for it.
According to Tan Xin, chairperson of Hanma Investment Group, the first company authorized to extract CBD in 2017, “CBD has huge potential.” Marketed abroad in various balms, sprays, and oils, the compound is now a medical wonder, proven to treat sleep issues, skin problems, appetite worries, and even some diseases, such as multiple sclerosis, diabetes, and even cancer.
There is no movement to legalize cannabis in China. It is unlikely one will emerge either. However, the acceptance of cannabis in North America has been the driver of demand for medical marijuana on a global level, and with easing of its stigma occurring worldwide, companies in China are jumping to profit from this huge demand.
Hempsoul, a subsidiary of Hanma in Shanchong, a remote village west of Kunming, Yunnan Province’s capital, has over 1,600 acres under cultivation for hemp, the non-psychoactive species of cannabis used for making paper, rope, fabrics, and more. It grows these plants specifically for extracting CBD, in both crystal and oil form, in its two-year old factory neighboring a weapons manufacturer in a restricted area.
General Manager of Hempsoul, Tian Wei, gave an interview at the factory. Between rounds of test gunfire next door, he said this of CBD, “It is very good for people’s health. China may have become aware of this aspect a little bit late, but there will definitely be opportunities in the future.” In fact, China has been growing cannabis for eons, using it medicinally, nutritionally, and for making textiles.
According to Frontiers in Pharmacology, an old text, called the Divine Farmer’s Classic of Materia Medica, from the first or second century, credited cannabis, its leaves, and its seeds with notable curative powers, stating, “Prolonged consumption frees the spirit light and lightens the body. It is clear there was a spiritual element to this too.
After the founding of The People’s Republic of China in 1949, the country took a very hard stance against illegal drugs, including cannabis. Using and growing marijuana remains strictly forbidden today, with even the death penalty facing traffickers in extreme cases. Then, after the 1985 United Nations Convention on Psychotropic Substances, China got even stricter.
It prohibited growing of hemp in any way, long a staple for farmers in Yunnan, a poor region famous for its mountains and proximity to Myanmar, Laos, and Vietnam. They were growing it for making textiles and rope, all banned after China signed its name at the convention in 1985, even though it contained just trace quantities of the psychoactive tetrahydrocannabinol, or THC, not enough to get “high.”
Earlier this year, Liu Yuejin, deputy director of the National Narcotics Control Commission, said at a news conference that the spread of legalization across the world would tighten state control of cannabis, claiming Chinese authorities would “more strictly strengthen the supervision of industrial cannabis.” Hempsoul has numerous closed-circuit cameras to stream videos to these authorities.
Yunnan only resumed production of hemp in 2010, after the country finally relaxed its stance on industrial hemp, and were using it primarily for making textiles, including army uniforms. However, it expanded soon enough, attracting urgent investment to the area, which, with its mild climate, is ideal for cannabis. Farmers earn around $300 an acre of cannabis, much more than for rapeseed or flax.
Currently, Hempsoul is just one company of four currently growing hemp in Yunnan. They have licenses to process the plant for CBD, and combined, they have over 36,000 acres under cultivation. Others are rushing to join the fray. The province granted license to three subsidiaries of the pharmaceutical Conba Group in February, which has its base in Zhejiang Province.
More recently, a company from Qingdao, one Huaren Pharmaceutical, acquired permission to use greenhouses to grow hemp, and several already dot the Kunming landscape. Other provinces are paying attention too. Heilongjiang, a province bordering Russia, joining Yunnan in 2017 in permitting cultivation of hemp. Its neighbor, Jilin, has plans to make similar moves, and other provinces are following suite.
These announcements, coming now in a flurry, sent stocks for these companies soaring on Chinese exchanges, cuing regulators to curb trading. While scientists continue to discover the medical benefits of CBD, the United States Food and Drug Administration approved Epidiolex last year, the first cannabis-derived drug for treating severe epilepsy. They are also studying its other potential uses.
China allows the sale of hemp oil and hemp seeds. It also allows the use of CBD in cosmetics. However, it has yet to approve CBD for use in medicines and food, so the bulk of hemp currently grown, around two tons and rising annually, is off to overseas markets. Some, like Tian, believe that China will also approve it for ingestion. It is just a matter of time.
Hanma has global ambitions. So do all these companies. So does China itself. Hanma purchased an extraction plant in Las Vegas, already in production, and has plans for another in Canada. Mr. Tan, Hanma’s chairperson, hopes China, with the biggest market in the world, will follow the footsteps of the United States, a country he calls “the best educated” for cannabis and its many benefits.
A scientist from the Yunnan Academy of Agricultural Science, Yang Ming, who is a leading expert on hemp in China, says that its seeds traditionally treat constipation. However, farmers and citizens have very little knowledge of its psychotropic properties. This is changing, as are perceptions, both in China and around the world.
After its Cultural Revolution, when China began slowly opening to the outside world, early visitors in the 1980s and 1990s found cannabis growing wild and abundantly all over the country. When word of this reached other countries, it attracted adventurers and backpackers from everywhere, all looking for a specific experience, one not readily found today.
According to Dr. Yang, “They would go to the villagers’ cannabis fields, pick the buds and bring them back to the hotel to dry and smoke. Some of them became deranged and ran around naked after smoking it.” This prompted intervention by authorities. Yang, a Yunnan native, is an agricultural graduate from Beijing assigned to study marijuana. He is still at it.
His academy has been happily breeding its own hemp varieties, each requiring police approval, to make sure that plants contain less than .03 percent THC, the standard that determines cannabis. Currently, he has nine varieties and plans to research more. One, Yunnan Hemp No. 7, contains higher levels of CBD for extraction. It is already popular. As Yang says, “Other countries really like our CBD.”