Despite the rapid growth of hemp and CBD industry in the west and many places around the globe, China’s CBD sector continues to drag along.
China’s CBD industry is governed by strict regulations, considerably limiting the sector’s progress. The only allowed route is the production of CBD for cosmetic purposes, a market estimated around $964 million in 2019. While hopefully waiting for the entire CBD market to unfold, Chinese pharmaceutical firms are racing each other in taking advantage of the available market.
At present, only three provinces are authorized to grow hemp in China. The regions, Jilin, Yunnan and Heilongjiang, are allowed to cultivate industrial hemp with a minimum THC content of 0.3 percent. For companies to extract CBD from hemp, they must apply for authorization and be willing to comply with a series of legal requirements.
In addition, China only allows the harnessing of CBD from hemp leaves and not the flowers.
China is one of the world’s strictest nations in regards to drug control. After the signing of the 1985 UN Convention on Psychotropic Substances, the country banned hemp cultivation—previously practised in Yunnan for production of rope and textile—regardless of its low-THC concentration.
In 2010, China relaxed its regulations allowing hemp cultivation back in Yunnan, albeit under strict supervision.
The growing popularity of CBD in the west has caused over 40 listed firms to join the Chinese industrial hemp movement, regardless of its slow burn. Most of the companies are primarily focused on CBD. According to a prediction by Tianfeng Securities, the growing interest in industrial hemp and its extracts for consumption purposes will continue its upward trend through 2020.
Aside from stringent legal restrictions, the hemp industry, like many in China, has been hampered by the coronavirus pandemic.