‘Legal cannabis has a huge market potential in India,’ Rohit Sharma, Founder IIHA

‘Legal cannabis has a huge market potential in India,’ Rohit Sharma, Founder IIHA

Friday November 09, 2018,

8 min Read

Earlier this year, Uttarakhand became the first state to allow the commercial cultivation of the hemp crop, a variety of non-narcotic cannabis, that finds use in industries across textile, eco-construction mateials, biofuels, health, and nutrition.

Though countries like Germany and China have been quick to capitalise on the legal cannabis industry, India has been slow to warm up to its benefits.

But everything’s not gone up in smoke. Many small businesses and startups have entered the industrial hemp industry as first movers. This year also saw Bombay Hemp Company raise $1 million from Ratan Tata and others.

However, getting a licence from the Uttarakhand government to allow the cultivation of hemp was nothing short of a victory for the Indian Industrial Hemp Association (IIHA), a non-profit organisation that promotes industrial application of hemp.

Though the Indian government had formulated a policy way back in 1985 allowing the cultivation of non-narcotic cannabis along with opium, there were no proper rules laid down for hemp cultivation, its procurement, and use.

Rohit Sharma, who founded IIHA, has been working in this field fo the past seven years, told SMBStory, it concerned him that India was failing to tap on the $1-trillion industrial hemp industry. “We reliased that the authorities had no idea how to go about implementing the 1985 policy,” he added.

The focus of his work is market analysis and ecological evaluation as well as the political and economic framework for industrial hemp-based processes and applications. As the Founder & President of IIHA and Hemp Pharma Pvt Ltd, Sharma, is also a Partner and Member of European Industrial Hemp Association (EIHA), an ad-hoc advisory group of Industrial Hemp Europe.

The Gurgaon-based IIHA (it also has an office in Dehradun), is represented by its members in India and the world who work with the hemp plant and its many products. Rohit says, “IIHA connects the dots and fills in the pieces of the jigsaw puzzle for our members. We have tied up with the European Hemp Association, Canadian Hemp Trade Alliance, World Hemp Congress, Slovenia, and Hemp Industries Association to name a few.”

Here are excerpts from an email interview with Sharma, where he talks about the challenges and potential of industrial hemp industry.

SMBStory: Why was there a need to establish this association and how did you come about to doing it?

Rohit Sharma: In 2012, when we started to work with the hemp crop there was no technical body or entity monitoring it. The struggle was real as the very word hemp was connoted with marijuana.

The provisions in the Narcotic Drugs and Psychotropic Substances (NDPS) Act of 1985 for use of industrial hemp as a commercial entity were a struggle to explain, especially to government bodies. The understanding of industrial hemp was extremely limited. The potential of a trillion dollar cash crop remained untapped in its own homeland.

According to the NDPS Act, trade and consumption of cannabis’ resin (charas) and the bud (ganja), which have a higher amount of THC (narcotics content), is considered illegal.

The impetus for this budding industry was felt by IIHA, and it took it upon itself to bring industrial hemp to centerstage and smooth out uneven creases. Putting forth a team of distinguished individuals from research and development, legal advisory, and then further creating a network with international associations, IIHA is strongly focused on creating the groundwork with technical data for the hemp industry.

As a result, due to strong technical background, an ease is felt by new entrants and members of IIHA. On an average, IIHA today receives more than 20-30 queries a day about farming, fiber, pulp, medicine, and food etc. from all across India.

Hemp cultivation in Uttarakhand

Hemp cultivation in Uttarakhand

SMBStory: Why hemp?

RS: Hemp has been found to be a good substitute for cotton. It can be clubbed with other natural fibers like silk to produce textiles. The plant can also be used to manufacture paper products and fiberglass, and research has shown industrial hemp can be an alternative source of biofuel.

Moreover, the plant can be harvested in three months and requires very little water, which is why states like Uttarakhand, where water is scarce and it is difficult to grow conventional crops, are ideal for its cultivation.

SMBS: What are the challenges of businesses in the plantation, processing, and marketing of hemp?

RS: The first pilot project of IIHA with the Uttrakhand government started in July this year. It has been a training ground for us. Though one of the best attributes of the hemp crop is that it is essentially a robust and hardy crop compared to cotton and others, it needs minimal resources to grow. As a first-hand experiment, barren lands in hilly areas of Uttrakhand are being used for cultivation of the crop. At the inception stage, we had to get the land cleared of stones and rocks, a lengthy but surely a fruitful process.

Considering IIHA is doing the first of its kind of legalised hemp cultivation in the country with the support of the Uttrakhand government, a clear streamlined data will come out with this pilot project which will be beneficial in tracking all the blind spots for future entities as well.

The concerns the industry faces arise at making multiple government departments understand the worth of the cash crop. The industry is clearly showing signs of movement from the nascent stage. Yet stigmas and lack of understanding are holding the industry back.

For example, for food processing, in October last year, Food Safety and Standard Authority of India (FFSAI) had sent a notice to Indian states that there aren’t clear standards of food safety. Henceforth state licenses to sell hemp food products are at a standstill. In the last one year, industry is bringing forth data to FSSAI to set clear standards and get the show on the road. There is a huge hemp food market waiting for imports and exports alike.

The perception of hemp being only a narcotic product is slowly changing among the youth and critics of hemp. At IIHA, we get a lot of requests from Indian millennials wanting to work in the hemp industry. Marketing is essentially not a challenging situation for a multi-benefit crop like hemp.

SMBS: How are you deploying digital technology?

RS: A lot of products pertaining to hemp fiber are readily available on digital platforms. From IIHA standpoint, we have an active social media presence where we update posts about our cultivation process and body of work. We are working on some digital projects that will see light of the day by next quarter.

SMBS: What were the key milestones in your journey?

RS: First and foremost, the key milestone was setting up IIHA as a strong technical body and give authenticated data-backed answers to government bodies. SRS institute’s tieup with IIHA was the first cause created to study the hemp crop and conduct various tests. As an authenticated technical body representing the industry and backed with SRS institute, IIHA has spearheaded the formulation of the licensing process of industrial hemp in Uttrakhand.

At IIHA, we celebrated July 6, 2018, as IHemp Day. It a day of reckoning as after consistent efforts IIHA procured the first license to cultivate industrial hemp in Uttrakhand.

SMBS: What is the market size of the sector?

RS: It’s an exhaustive list as industrial hemp is a multi-beneficial crop and all the parts of the crop come with a utility. Around 30,000 products in the world market are currently being sold. Bio-plastics, herbs from bio ethanol, construction material, cosmetics, fibre, food, pharma, and pulp to name a few sectors that will benefit from industrial hemp.

SMBS: What is your advice to people who want to set up their business in this sector?

RS: Hemp is a vast subject area. Every part of the plant has its set of benefits and usages. Anyone wanting to work with hemp needs to study and do considerable homework on niche product they intend to curate with hemp. The process of working with hemp doesn’t start and end with its cultivation. A business entrant needs to be clear and much focused on the niche industry and then prepare a business plan around the targeted chosen industry.

SMBS: What are your future prospects?

RS: There are a lot of corporates who want to enter the agriculture sector of hemp as well as its end products. If we take the example of olive oil, we see there is a lot of acceptability and openness in the food sector alone in India. New product entrants especially from health and lifestyle standpoint are generating a lot of buzz.

SMBS: What is your opinion of the MSME market in India and how can the MSMEs be empowered better?

RS: MSMEs will be playing a major role in the hemp industry. MSMEs will be exposed to a huge export market as the hemp industry progresses further. MSME market looking at new ventures and startups can capitalise on hemp for their business models. MSMEs contribution will also lead to the strengthening of the hemp industry.