The rise and rise of the Indian hemp industry – Mint Lounge

One question commonly posed to entrepreneurs selling hemp-based products is: Will this get me high? The query could be for any producthemp oil, seed, powder, even a T-shirt made of hemp. The answer invariably is no, which may come as a bit of a disappointment to some. But the question is an indication of the confusion that still surrounds hemp, a plant that is currently fuelling startups and e-commerce in India at an unprecedented rate.

At least once a week, someone will ask, Will I get high with this? Even with paper, soap, with whatever we make. Is soap a code word for something? they ask, says Elston Menezes, one of the founders of Bengaluru-based B.E Hemp, which sells hemp-based products such as soaps, food, stationery and accessories. I then send them a picture of the soap.

Yash P. Kotak, one of the six (initially seven) founders of Bombay Hemp Company (BOHECO), which sells nutrition and personal care products, and its director of business development and media, has had a similar experience. If I wear this shirt, will I get high, thats their question. Its a great ice-breaker thoughno cotton shirt company will get asked that question.

When we first started, says Rohit Shah, co-founder of Hemp Horizons (their products go under the brand name Health Horizons), we got calls from people who would place an order. Then they would ask, Can I put it in a vape and smoke it? Send in discreet packaging. But the audience has evolved from that stigma. Today we see (people of) ages from 25-60 placing orders on our website.

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Hemp products were one of the few categories that benefited during the pandemic. Entrepreneurs say the lockdown gave consumers the space to focus on health. They looked for better experiences with food, nutrition, alternative curative methods and therapeutic products that would help with anxiety and pain relief. They sought more sustainable brands, shifting to vegetarianism and veganism. Once e-sellers overcame issues with supplies and deliveries in the early days, business started picking up.

Both hemp and marijuana come from the Cannabis sativa family of plants. Both have tetrahydrocannabinol (or THC, the psychoactive component which provides the sense of euphoria or intoxication) and CBD (cannabidiol) with many other compounds. CBD is an oil extracted from the leaves, stem and flowers that acts as a painkiller, muscle relaxant and mood enhancer. Regulated industrial hemp plants in India contain primarily CBD and its extracts usually contain less than 0.3% THC, which does not give you a high. Supply is controlled by the government, with only a handful of companies having an Ayush licence to manufacture hemp thats supplied to retailers.

Hemp products from Health Horizons.

Founded in 2017 as a contract manufacturer that supplies to wholesalers and other edible hemp brands, Hemp Horizons has gone from processing 500kg to 4,000kg (of edibles) in 12-18 months. It recently raised 2 crore in seed funding from Mumbai Angels Network and AngelList. Medicinal startup HempStreet got $1 million (around 7.4 crore) in pre-series A funding in February 2020 led by Pharmacon Holdings, a US-based pharma-tech company, and Romain Barberis, a private investor in cannabis in the US and Canada.

Business blossomed during the lockdown, says Jayanti Bhattacharya, co-founder of Bengalurus India Hemp & Co. The first time (lockdown in 2020) was insanesome factories were looted in the north, material got stuck. We had no control and things escalated so fast. But collectively, a lot of our processes fell into place. We came out shining, with no corners cut.

Since 2019, over 50 firms have registered with the word hemp in their names, says Kotak, while Shah says the number of registered startups rose from eight to over 100 in 18 months. Rohit Sharma, president of the non-profit Indian Industrial Hemp Association, put the number at around a hundred as well. Interest in CBD peaked in September last year, according to Google Trends. A lot of people were waiting for companies like ours to see the resulting effect. The first one out of the door is the first to get shot, you know, says Kotak.

According to Shah, roughly seven-eight years into its modern commercial existence, the hemp industry in India is worth $2-3 million. With entrepreneurs evidently ready to brave the odds that come with low awareness, be it among farmers or consumers, and limited production and marketing avenues, Shah optimistically predicts this will grow to $500-700 million over the next few years.

Its the responsibility of any company making hemp products, such as hemp oil, to sell correctly labelled items.

The global hemp industry was estimated at $4.71 billion in 2019, according to the Industrial Hemp Market Size, Share And Trends Analysis report published in February 2020 by US-based Grand View Research. The market is driven by the growing demand for hemp oil and fibres in the automotive, construction, food and beverage, personal care and textile industries, especially in emerging regions such as the Asia Pacific, the report states.

UP IN THE AIR

Indias complicated and enduring connection with cannabis extends through history, mythology and religion. Its mentioned as one of five sacred plants in the Vedas and is a staple during the festivals of Holi and Mahashivratri in north India. We came across a statistic that shows 60% of districts had wild growth of cannabis, says Kotak.

Yet, though the plant originated in the Himalaya and Central Asia, the modern-day cannabis market is only about 30-35 years young. For once cannabis was classified as a synthetic drug in the US, which made it illegal in 1970 and later banned it, it came under the spotlight in India too. The Narcotic Drugs and Psychotropic Substances Act, 1985 bans the flowering or fruiting tops of the cannabis plant (ganja) but excludes seeds, stalks and leaves. Bhaang is a paste made from the leaves, so its not outlawed. The confusion, says Shah, is that bhaang was never illegal. It has a religious association and Ayurveda has 190 formulations that have cannabis as a key ingredient. CBD oil does not come under the NDPS Act either.

Through all the ups and downs, however, the unorganised recreational cannabis industry never really faded away. After the NDPS Act, it just slipped under the radar. Shah believes India has about 38 million active recreational users.

Things began looking up again when the US, in a 2018 Farm Bill, decided to allow hemp cultivation, sale, possession and transfer of hemp-derived products. Now, like yoga and golden turmeric, the moment the US brings it back, India jumps on the bandwagon, says Bhattacharya.

Uttarakhand became the first state to permit commercial cultivation of industrial hemp, in July 2018. The Indian Industrial Hemp Association became the first to cultivate hemp legally there. Himachal Pradesh and Rajasthan are expected to follow suit but at present Uttarakhand remains the sole local supplier.

Last year, the United Nations Commission on Narcotic Drugs (CND) voted to remove cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs. India supported the move, fuelling hope that it would join the global movement to realise the medicinal and commercial potential of cannabis, Forbes reported in April.

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Sharma says the debate centred on the cases involving actors Rhea Chakraborty and the late Sushant Singh Rajput last year helped revive conversation in the media. Cannabis has been in India for long, he says. The hype is more of an international thing. Cannabis-based homoeopathy and Ayurveda is an age-old practice. Its just an old thing that has been rebranded, like yoga.

However, it becomes the responsibility of any organisation working with hemp and cannabis products to uphold the sanctity of working with this plant by selling licensed, correctly labelled products, emphasises Kotak. Only if you play by the book will you be able to add a moral at the end of the story.

JOURNEY INTO THE UNKNOWN

When India first locked down in March last year, says Menezes, they were thinking of closing B.E Hemp. His two partners had other businesses; he didnt. So he kept going. Soon, with shops shut, they started getting calls for rolling paper. One call turned to five to hundred and a thousand, which kept our company afloat, says Menezes.

They ran out of rolling paper and had to buy from others. That is when they realised it was the best time to pursue the idea of becoming the Amazon of hemp. They developed new products, like a line of hemp soaps. We get a decent number of orders for rolling paper while we have branched to CBD, he adds.

Hemp, which has a short, summer crop cycle and uses just about half the amount of water that cotton does, makes for a sustainable crop. Every part of the plant can be used, for food (nutrient-dense seeds and oils), medicinal use, fibre, paper, fuel, construction (hempcrete), animal food, bedding, even as a biodegradable alternative to plastic, says Bhattacharya.

Hemp seed is supposed to be high in omega 3, 6, 9, vitamin B12, vitamin E, potassium, magnesium, iron, protein and zinc.

Hemp powder can be used to make rotis, pastas, bread, smoothies. Hemp seed is supposed to be high in omega 3, 6, 9, vitamin B12, vitamin E, potassium, magnesium, iron, protein and zinc. Hemp repairs you internally and externallyfrom muscle, skin to internal organs, claims Alysa Decruz, who co-founded Hempwise in Goa with husband Terence Sequeira in 2018.

Its a superfoodon steroids. It helps with chronic ailments, sleep management and arthritis that dont have simple cures. (There are) multiple reasons why its in the forefront, says Shah over the phone from his residence in Meerut, Uttar Pradesh. The company is based in the National Capital Region.

For the three Hemp Horizons foundersShah, Kartikey Dadoo and Kanishk Yadavthe inspiration for their company came from what they saw in the US. When they were studying and working there a decade ago, they initially found yoga studios everywhere. Then cannabis made a comebackfor its benefits, not just as recreation. It was an epiphany for us that bhaang should not be a Western product alone. That had us start this, says Shah.

Convincing parents was the first challenge. They asked: Are you going to be a drug dealer? remembers Shah, laughing. The partners started showing their families videos of Baba Ramdevs Patanjali, which spoke of the benefits of cannabis. They shared information about its uses in Ayurveda and Jatiphaladi churan, which has cannabis powder as an ingredient.

Shalini and Jayanti Bhattacharya, co-founders of India Hemp & Co.

About four years ago, Bhattacharyas sister and business partner Shalini, who shuttles between Bengaluru and Barcelona, Spain, developed back pain. They went through the rounds of MRIs, scans, pursued treatment in Ayurveda, acupunctureit didnt help. She had just decided to live with it when someone suggested CBD. I could see the change in her, says Jayanti, who worked in advertising before she turned entrepreneur. In four months, she was fine, with no needles, machines needed. The sisters lead outdoorsy lifestyles and stick to plant-based diets. India Hemp & Co. was the 10th hemp brand to begin in Indiain November 2019, a few months before the first lockdown.

Menezes, who grew up in Kuwait, thought of weed every time he heard of cannabis. He knew about hemp but his perspective changed when a friend from Nepal brought him a hemp wallet that blew his mindhe had never seen one. One of his first thoughts was a question he now parries himself: Will it get me high?

Thats what people have been asking us for the past eight years, he says, laughing. Cannabis is not as bad as people think, then why so much hatred towards it? This has helped me in college with creativity or depressionit has never given me any negative emotion.

Keen to promote every aspect of cannabisindustrial, recreational and medicalhe started by spreading awareness through their portal. They found people were curious about products, so they added items like key chains, wallets, purses and bags, all made of hemp. We started too early in the cannabis industry. It took us a long time and we are still growing, he says.

For others, like Kotak and Decruz, life and work took them to places where they could see hemp all around them. In 2011, Kotak, for example, was working on a social enterprise rural project of solar electrification, visiting villages in north and north-west India where he saw hemp being used for subsistence, for cattle, for food, just as the villagers forefathers had done. The users found no economic value in cannabis, globally a trillion-dollar super-crop.

BOHECO, set up in 2013, spent the first five-six years aligning science and policy, Kotak says. In April 2017, the countrys first research licence was issued, allowing the Council of Scientific and Industrial Research-Indian Institute of Integrative Medicine to collaborate with BOHECO in growing cannabis and studying its medicinal properties. They opened their first store in Indiranagar, Bengaluru, this April.

Yash P. Kotak (standing, left), one of the founders of BOHECO, with his team.

Cannabis comes with a preconceived notionyou have to unlearn and relearn about the crop, says Kotak, whose firm started making products in 2018. We launched a 100% hemp shirt. When we did a survey before, we asked about cannabis clothing and people said what came to their mind was a Bob Marley T-shirt. How do you get rid of the clich?

BOHECO, which employs 28 people, pivoted from fabric to health and nutrition from 2019, with BOHECO Life. This led to nearly 100% growth from year 1 to 2, with 42% repeat customers, says Kotak. Their revenue of 4.5 crore in the last financial year was largely an outcome of this change in strategy.

Decruz and Sequeira ran a bed-and-breakfast facility for five years in Manali, Himachal Pradesh, with hemp growing wild everywhere. In 2014-15, they decided to experiment, so they got an oil machine, pressed oil and used it for everythingfood, bathing products, and more. They used hemp for pizzas, dough, salad dressing and made bullet coffee with CBD oil. Hempwise was born after they moved to the village of Parra in north Goa. Their two-room facility on the ground floor of their apartment complex produces items that they used to sell through Friday night marketstill the lockdown earlier this yearand to some cafs and stores.

KNOWING THE PRODUCT

Most hemp entrepreneurs say that apart from policy, awareness is a challenge. Few farmers grow hemp because science has not kept up with policy. They say that finding the right agencies, buying raw material, procuring licences for retail and knowledge about machinery continue to be problem areas. Marketing is tough. Facebook, for instance, does not allow advertising of hemp products. Amazon does not sell them. Supermarket chains like Foodhall and Big Bazaar do not store them. Social media blocks mention of hemp, says Menezes, even while advertising notebooks and beanies. You have to depend on word of mouth, on influencers.

A customer at a BOHECO store,

We never faced any backlash from authorities or people because it was all legal, he says. Most products are sold online, though some are available in stores as well, like BOHECOs in Bengaluru and Saukhyam in Porvorim, Goa, that stocks India Hemp & Co products.

The expectation is that the Food Safety and Standards Authority of India (FSSAI) will soon classify hemp as food. Once the FSSAI comes into play, everything will open up, says Shah. The Great Legalisation Movement India, a non-profit research organisation, is leading a mission to legalise cannabis. The smaller entrepreneurs know that conglomerates like Dabur, Himalaya, Tatas and Patanjali are waiting to jump in.

With cannabis, people think of one thing, says Menezes. We want them to understand that its multifaceted and can expand into 30,000 different, eco-friendly, sustainable products. Besides food, hemp has found its way into gin (Samsara) and vodka. One firm has made motorbike exhaust mufflers with hemp that absorb more carbon, says Shah. Menezes is planning to produce hemp shortsa plan that has been delayed by the pandemic.

During the first lockdown, when people called me, 20 minutes into the conversation the last question would be, Will I get high? When the answer was no, they would say, I will buy it for my mother, says Bhattacharya, laughing. But the questions she faces most often are whether the products are preservative-free, where they are sourced from, and whether people can grow hemp at home. People want to know how to use it. We were making salads but consumers still needed their sambhar, idli, appam and stew. We have gone south, integrated hemp into Indian cuisine, because you cannot make brownies and souffle every day.

I need to do a mosquito repellent because thats so apt for Goa, says Decruz, smiling.

Menezes has plans for franchises. Sequeira wants to create a hemp hub that has a caf, infused food and a four-course meal with a spa for massages. Shah is aware that he is building a category, not a company. Uttarakhand as a Himalayan state had a cultural and social relationship with the plant, says Shah. Technocrats and bureaucrats have grown up around the plant; they have an idea of its uses and potential. But in five years the industry has not grown tremendously because of lack of scientific precedence. For a crop to be a commodity, there has to be significant plant research and science with standardisation. Nevertheless, he predicts, There will not be a single industry left untouched by it.

Hemp users and sellers praise its properties. Decruz mentions a girl who used expensive steroids for hives. It didnt work. With Hempwise soap, her skin cleared. She has seen it work for acne, with wounds, and on pets. Customers also love Sequeiras pesto hemp pastas, one with sun-dried tomatoes and another with basil and vegan Parmesan. With food, he says, I want a full infused menu. Its healthy eating that takes you on a different journey. Make it an experience. But when you get up, you should be able to walk home.

Almost on cue, Decruz quickly makes it clear what he means by adding the company motto: Soak it but dont smoke it.

Arun Janardhan is a Mumbai-based journalist who covers sports, business leaders and lifestyle.

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The rise and rise of the Indian hemp industry - Mint Lounge