Zerodha CEO Nithin Kamath, who keeps sharing his wisdom on investments and financial markets, on Saturday shared the benefits of hemp - a variety of the Cannabis sativa plant species. "Hemp belongs to the Cannabis sativa family — the same as marijuana," Kamath said in a tweet. "They look similar, but hemp is versatile and has multiple uses, including as a superfood."
Kamath said hemp is also good for the planet. "Unlike its notorious cousin (marijuana), hemp doesn't get you high. Partly why it isn't popular."
Hemp is grown specifically for industrial purposes. Unlike marijuana, hemp contains low levels of tetrahydrocannabinol (THC) - the psychoactive compound that produces the 'high' associated with marijuana use.
"Because they look alike and come from the same family, hemp is often mistaken for marijuana, which is one reason why it isn't mainstream," the 43-year-old leader said.
Kamath learned about hemp when evaluating a startup working on hemp protein. "We're now convinced about allocating capital to startups working on hemp, but we're also seeking regulatory clarity," he said.
The FSSAI (Food Safety and Standards Authority of India) has approved hemp seeds for human consumption, but the "notorious cousin" and the tainted family are bound to create issues, the Zerodha CEO said. Some states, like Uttarakhand, are working on a policy on hemp, he said. "It will be awesome to get input from anyone who has spent time on this."
Hemp has been cultivated in some parts of the world for years for a wide range of industrial uses, including the production of textiles, paper, biodegradable plastics, construction materials, food, and fuel.
In a special report last year, the United Nations Conference on Trade and Development (UNCTAD) said China has always been the leading producer of industrial hemp, primarily for its fibre. Other important historical producers have been essentially European countries such as France. However, Canada, and the US are becoming large producers with a growing influence on international markets.
"Overall, about 40 other countries currently produce some significant quantities of industrial hemp," the report said, adding that due to a narrow set of hemp products covered by international trade statistics, recorded trade flows do not fully reflect the true size of the global industrial hemp market.
Despite an estimated overall value of about $5 billion in 2020, trade in such products amounted to a mere $42 million, according to the report. "Thus a clear effort is urgently needed to include a more representative set of hemp-related products in international product classifications," the agency said.
In 2020, the average value of one kilogram (kg) of imported hemp yarn was about $9.1 against $0.94 for semi-processed hemp and $1.38 for raw hemp. The price of crude CBD hemp oil on the European market reached $931 per kg in November 2021. CBD isolate3 (a pure form of cannabidiol) was sold at $952 per kg and $1,200 per kg in November 2021 on the European and US markets, respectively.
"However, a significant fall in prices due to over-production of hemp-derived CBD-containing products has been observed since the overheating of the market in late 2019 and early 2020 in the United States," the report said.