The Indian Dream Trends (TID Trends) is a newsletter to identify new markets and ideas that are set to explode in the next few years.
Hemp is a variety of cannabis sativa plant species especially grown for the industrial usage of its derived products. Global regulations around Cannabis in the 1980’s unfortunately resulted in decline in Hemp’s cultivation and research around its potential uses.
Over the last few years, regulations have been eased across various countries and has resulted in a massive growth of the Global Industrial Hemp Market. We explore the opportunity of building a business around Hemp in India.
🧐 Market Gap
Extremely low utilization of India’s hemp growing capacity.
Hemp has more than 20,000 Industrial applications including Textile/Fibre, Oil, Fuel, Paper, Building Material, Plastic, Proteins, and Medicines.
Can be grown in 60%+ Districts of India.
Takes 50% less water than cotton, helps eliminate pesticides and heavy metals from the soil and has the ability to remove large quantities of CO2 from the atmosphere.
International Markets have seen significant rise in Hemp derived products in the last 3-4 years.
As per industry insiders, current market size in India is less than $1 Million (~7 crores INR).
Do you see the potential upside we’re seeing? 😃
Bombay Hemp Company (BoHeCo)
Checkout our podcast with BOHECO Founders here.
The All-in-one with 9.25cr of funding
1. Boheco Life: Ayurvedic Products
2. BLabel: Hemp Clothing
3. Hemp Fabric Lab: Hemp Fabric
4. Hempcrete: Hemp Building Material
Subscribe below to stay updated on our upcoming interview with BoHeCo.
1. ERB Textile
2. Hemp Fabs
Hemp Food & Ayurvedic Hemp Treatments
11. Yuvan Life
Hemp Construction & Others
1. It’s Hemp
🔓 Current Regulations
Cultivation and processing of Hemp Fibre has been allowed at the central government level under the NDPS Act of 1985, however the respective states control the law around this.
Currently, Uttarakhand and UP allow for cultivation.
From our interviews with Industry Leaders:
Consumable products need to be licensed under the Ministry of AYUSH.
These Products include Hemp Seeds, Hemp Oils, Hemp Powder etc.
Textiles, Personal Care Products, and Building Material do not face regulation, the only hurdle is cultivation.
Changes in licensing regulations are expected.
Ministry of AYUSH has also started licensing Cannabinoid products that are extracted from the Hemp Leaves. This may open up medicinal usage of the plant.
🙏 Our Predictions
Customer awareness and regulations are the biggest hindrances to growth. Given the Ayurvedic history of Hemp, and the current government’s focus on promoting Ayurveda, we predict an inflection point 📈 in the next few years as regulations open up.
Venture Capital money will flow into the sector as it did in other countries. Firms will spend on marketing to build customer awareness thus growing the market.
Cannabinoids (CBD) derived from Hemp have shown to solve anxiety, stress, and insomnia issues in a more effective way than existing products. As regulations are relaxed, the CBD market can explode like in the West.
Hemp textiles and industrial applications form 14% and 18% respectively of the hemp industry in mature markets. Hemp textiles use 50% less water than cotton. There is a potential for this market to grow as sustainability becomes a priority for Global Brands.
The market is in a nascent stage and shows the potential for exponential growth like in the West. There is tremendous opportunity in different parts of the value chain.
Build a vertically integrated model including cultivation, processing, and retail. This will be capital intensive but can be your moat.
Export the raw or processed product to already established markets in your own brand or as a white label supplier. This has a strong potential given favourable cultivation conditions in India.
Create a hemp-focused brand using contract manufacturing.
Add hemp products to your already established health, beauty or Ayurveda brand.
Build a community around hemp. Grow awareness. Build trust. Watch the market expand. Launch a product.
Focus on R&D as regulations open up and awareness increases. Money will be spent to scale up usage for other Hemp derived products.
🧐 Looking to explore this market?
You can drop us an email and we’ll do our best to connect you to relevant people.
“Regulations will never allow this to grow”
India’s 1985 ban of hemp products was due to US pressure despite a long cultural history with the plant. The global movement for the deregulation of Hemp and the current government’s interest in Ayurveda will align.
“My parents will never use hemp products.”
Don’t underestimate the impact of marketing dollars.
“This is such an old product in India, we’re just following a Western fad.”
Let’s not make this another Yoga and let the West become its pioneers.
“These products are only for stoners.”
There is a common misconception of equating Hemp to Cannabis.
Hemp contains less than 0.3% of THC, the psychoactive compound of the plant. It cannot get a person high.
Cannabis contains more than 4-5% of THC and is psychoactive. Its usage is also banned in India according to the NDPS Act of 1985.
🦋Share the research with your Friends
Hemp and India – Legalities, Prospects, Challenges, and Future Outlook – Blog style article providing a primer on the legalities and challenges for hemp production in India.
Indian Association has big plans after announcing $150m investment – Provides a list of the members of the IIHA in 2018.
Boheco: This cannabis startup is weeding out the high notes for a Hemp economy – According to the article, the global Hemp Market is $4.2 billion and India’s contribution stands at 0.001% or $42,000 (30 lacs) in 2018. This chart provides a good breakdown of sales by hemp product type in mature markets.
Narcotic Drugs and Psychotropic Substances Act, 1985 Chapter I: Preliminary – “excluding the seeds and leaves when not accompanied by the tops”, the section of the NDPS Act of 1985 defining the illegal parts of the cannabis plant.
High Time for including Nutritious Hemp Seeds in FSSAI in India - “Presently no standards have been prescribed for Hemp and Hemp products under the Food Safety and Standards Act 2006, Rules and Regulations made thereunder.”
Ayurveda and cannabis: India’s R&D-to-retail firm HempStreet set for first product launch – “The products will target insomnia, anxiety, and pain relief, and are available only upon prescription by Ayurvedic Doctors”.