Hemp - a plant that has contributed to industries across the board and changed the way we perceive daily items. From food to clothing to accessories to a gamut of products, it is safe to say that hemp has taken over the mainstream market. It is worthwhile to mention that India too has begun taking long strides in this area. Have you been thinking of starting a hemp venture of your own? Well, then you’re in luck as this article is about to let you in on everything you need to know. We spoke to two very successful entrepreneurs in their own right who have gone on to show the world how a hemp enterprise in India can be a success if you do it right.
What is hemp?
Hemp vs marijuana. While the two are not different species of plants entirely, they are different names for cannabis.
What sets the two apart is the THC concentration. This cannabinoid is responsible for the ‘high’ that is associated with marijuana, but not hemp. The former has a THC content of more than 0.3% whereas the latter contains lesser than 0.3% THC.
The trillion-dollar crop is now the raw material in a multitude of products ranging from paint, paper, textiles, biofuel, animal feed, etc. More so in the Indian subcontinent.
Why is India favorable for a hemp enterprise?
The Indian climate is suitable for hemp cultivation which makes it an excellent space for the crop to be grown. With states like Uttarakhand taking strides in this direction ever since the launch of the pilot project for the cultivation of hemp, other northern states to are gearing up.
Farmers for long have been distraught due to poor harvest and this crop could be the revival in the agrarian scene.
Shikhar Mishra, Founder CEO of Angetha Agro concedes. “India has 10 different biodiversity zones. This means that the country is home to hundreds of landraces that are unique in terms of their cannabinoid and terpene profiling.” According to this entrepreneur, even though a lot of research hasn’t been done on the Indian landraces these could potentially have a remedy/cure to a lot of ailments that we are suffering from.
He adds that over 50% of our population directly or indirectly depends on agriculture to earn their livelihood, essentially making India an agrarian society. “Cannabis is a plant that can be used to make over 50,000 different products. It is probably the only plant that can clothe, shelter and heal us. Given the versatility of this plant, it can serve as a modern-day cash crop and really help our farmers boost their income.”
Shikhar is of the opinion that with the right policies in place, we can use cannabis as a tool to create a farmer-centric industry and help our rural communities have access to the same opportunities as their urban counterparts.
Is it a good time to start a hemp enterprise in India?
Shailesh Ganeriwala, Founder CEO of OG Hemp, says we are finally in the phase where around the world the legal and social taboo around hemp is being lifted, thus generating a countless number of business opportunities worldwide. “The sooner you get onboard a new business trend, the more advantage you gain over late-comers,” he says. “Added to that, the newcomers will benefit from being some of the few addressing the demand existing in their market which really may become an important source of income for them.”
Here are the kinds of ventures you can plan on:
- Car parts
- Building materials
- Food additives
What is a good business model?
Shailesh Ganeriwala says that the business model chosen is dependent on the product that the hemp venture wants to offer to the market. “We are talking about hemp as a plant that offers an incredible array of business opportunities, from paper to nutritional supplements, medicinal components, or agricultural products.”
“I can only suggest that an optimum business model must incorporate being close to the end customers, not only the clients, a very good communication strategy, and attracting other players of the hemp ecosystem to explore synergies. A business model for hemp ventures differs from country to country. ”
On a global scale, it has been projected that the industrial hemp market will grow at a compound annual growth rate of 34% to $26.6 billion by 2025. While like every other business model, hemp ventures too necessitate a good strategy, keeping a check on forecasts, what investors are looking for etc. the crucial aspect in a hemp business model is to check how credible the business is in terms of market value.
How should one go about starting a hemp enterprise in India?
In order to create a strategic business plan, it is wise to know what you are getting into. To give you a firsthand view of this, we got Shikhar Mishra to share his thoughts.
Get rid of biases
Shikhar says the first step is ridding your mind of any positive or negative biases you might have in your mind related to cannabis. “Just treat it like any other plant that can be used to derive products of value.”
“When people start their entrepreneurial journey in the cannabis space it is mostly a passion-driven project, which is good but due to this “passion” people end up marketing cannabis-derived products as a “nature-given miracle” that can solve all our problems, (which is not entirely true).”
Follow a scientific approach
Look at cannabis-derived products as an ingredient and not a complete product, he advises. “Instead of creating a product just from hemp use hemp-derived products as a component and improve existing products.”
Look at cannabis-derived items as a part of the product and not the entire product itself
“For instance, one could experiment with hemp seed oil as one of the ingredients in making hand-made soaps. This might improve the overall quality of the product as hemp seed oil is great for the skin.
Respect the law of the land
“I would also recommend going through the NDPS Act of 1985 and the Drugs & Cosmetics Act of 1940 to understand the legalities related to starting a Cannabis business.”
Where does one source the raw materials for the hemp industry from?
While seeking to start a hemp enterprise in India, a common question is where should one start. As hemp cultivation has been permitted in parts of the North, is that the only option to source it from?
The trick is to find a supplier who will maintain a constant flow of the raw material so your production process can be seamless. If you are looking for permissions to process, you can reach out to someone who has an AYUSH license. The medical processing of cannabis is possible if you have one. As described below cannabis is of two natures. Medical cannabis, which has negligible psychoactive compounds can be traded all across India under AYUSH.
What are the legal aspects of starting a hemp venture in India?
If you are planning on starting a hemp business of your own, it would be a good decision to be aware of the legal framework guarding the laws of the production and sale of hemp. The Central Board of Excise and Customs is the authority that you will have to seek permission from as this is the governing body at the state and Centre level. Responsible for granting permission for the production of industrial hemp with THC less than 0.3%, the rules set by this body are those you should take cognisance of.
Do you have any more doubts that you’d like addressed? Write to us and we will reach out to experts for the same.