Home » News » Buzz » What Happens if India Legalises Marijuana: It Can Reach New 'High' and Beat China at its Game Too

What Happens if India Legalises Marijuana: It Can Reach New 'High' and Beat China at its Game Too

Image for representation purpose only.

Image for representation purpose only.

The market for cannabis products, both recreational and industrial, seems to be on the verge of major growth. Though China dominates global supply, its grasp over the market might weaken if companies consider moving supply chains out of the country, as they have throughout 2020. This sentiment likely won’t last and must be taken advantage of.

Rhea Chakraborty may never have heard of Harry Anslinger and has definitely never met him. Still, much of the harassment she’s faced recently due to her alleged “drug habits” has its roots in his actions almost a century ago, and in a different continent.

Anslinger, as Commissioner of the USA’s Federal Bureau of Narcotics in the 1930s, pioneered the country’s decidedly racist war on drugs. He considered marijuana a “scourge on society, ruining the moral fabric of America, and decreasing Americans’ capacity for gainful employment,” despite the fact that harms of moderate consumption were unproven, and its benefits ignored. As with opium some decades prior, he proclaimed it a villainous substance brought in and consumed by immigrants, primarily Mexicans, which posed a threat to the American way of life.

This rhetoric was later pushed onto the global stage. The goal of marijuana prohibition became paramount and manifested in the UN’s 1961 Single Convention on Narcotic Drugs, a document that has since shaped drug policies across the world. This classified cannabis as a Schedule IV substance, a category reserved for the most dangerous of drugs like heroin. The western world’s perception of cannabis as a menace with no redeeming features was universalised, though not without protest. India, in fact, took issue with this stance and had clauses inserted that made exceptions for industrial and horticultural use.

While the 20th century saw US-inspired stigma against the plant encourage prohibition world-over, the 21st century has seen strong activism and gradual legislation in favour of its legalisation.

The coverage of the US elections last November was dominated by the polarized presidential race which Joe Biden eventually won; what went unnoticed was support across partisan lines for cannabis legalization, resulting in a number of states reforming their laws. Weeks later, the UN, whose 1961 Single Convention on Narcotic Drugs inspired drug prohibition globally, voted to reclassify cannabis from a highly-regulated Schedule IV substance to a loosely regulated Schedule I substance.

These changes haven’t been guided just by the realisation that the rhetoric of cannabis prohibition was flawed. The crop’s vast commercial potential has slowly but steadily created a vibrant and varied global market for recreational, medicinal and industrial cannabis products, projected to be worth almost $90 billion by 2027, and has been a key catalyst for change.

Cannabis, though commonly considered just a recreational drug, is far more than that. Cannabis plants with high levels of THC (Tetrahydrocannabinol), a psychoactive chemical with narcotic properties, can be used recreationally. However, low-THC cannabis, called hemp (specifically from the cannabis Sativa strain), has numerous medicinal and industrial uses. Hemp can potentially be used to manufacture supercapacitors, a key component of high-performance energy-storage devices used in batteries for electric cars, and can be used to make biofuels for regular vehicles. It also contains Cannabidiol or CBD, a chemical that can be used as a medication for anxiety, epilepsy, pain relief, and other ailments.

In recent years, it’s inspired significant innovation. On Kickstarter, an entrepreneurial crowd-funding platform, cannabis-based products being made include cosmetics, clothing, food, eyewear, shoes and even a vehicle. What makes hemp even better are the ecological benefits it offers relative to materials it replaces, be it substituting for cotton in textiles, trees in paper, sand in concrete, or crude oil in plastics. Anurit Kanti, a researcher on the subject, told me in an earlier interview that he even considered it a “silver bullet in the fight against climate change.”

China Cashes In

Given the evident commercial scope of the crop, it’s no surprise that China has emerged as one of the foremost players in the global cannabis market. This, despite the Chinese state’s chequered history with the plant. Though its usage here, especially hemp’s, dates back millennia, the Chinese government remains wary of its narcotic properties – a fear inspired partly by their horrid experience with opium under British rule. Due to this, there’s heavy regulation of cannabis growth and high fines for illegal possession. It also caused China to vote against its reclassification in the UN last month.

Despite prohibiting the cultivation of high-THC cannabis and its narcotic use, China has recognised cannabis’ industrial and medicinal potential. In 2004, it permitted the licensed cultivation of hemp in the Yunnan province. In 2017, the Heilongjiang province followed suit, and in one year harvested nearly 1/3rd of what European and Canadian fields produced combined. Increased acreage and the development of high-yield seeds has enabled these regions to produce more than half the globe’s industrial hemp. With similar plans for other provinces, China’s share of the pie will likely grow bigger. China’s dominance in the industry is underscored by their possession of over half of the 600 important cannabis-related patents filed with the World Intellectual Property Organisation.

Unlike China, India voted for the reclassification of cannabis in the UN, last month. While domestic laws remain stringent, this could be a catalyst for change. Anurit Kanti certainly believes that. “As more governments reckon with the potential of the cannabis crop, they will change their stance.”

India stands to benefit as well. With both the centre and states short of revenue due to the pandemic, tax levied on cannabis products could help fill their empty coffers. Its potential is visible in estimates from ABCD’s research, which showed that tax from recreational cannabis alone (if levied at the same rate as cigarettes) would earn $31.45 million in revenue from Delhi in 2018, and $27.78 million from Mumbai.

Additionally, as the Vidhi Centre for Legal Policy noted, decriminalization of cannabis would bring relief to an overburdened criminal justice system. Significant police and judicial resources are spent on prosecuting cannabis users (and disproportionately those users from low-income groups), which would be better used in the efficient enforcement of law and order elsewhere.

Can India have an impact?

India has an equally storied history with the cannabis plant. Commonly used in the subcontinent for millennia, it was only outlawed in 1985 by the Narcotic Drugs and Psychotropic Substances Act, following from the 1961 UN Single Convention. While the act permitted industrial and horticultural use (as well as the consumption of bhaang), heavy regulation of cultivation and stigma meant that it fell out of favour.

Still, recreational cannabis consumption, though illegal, is widespread. According to a 2018 study by the German firm ABCD, New Delhi and Mumbai were the 3rd and the 6th highest consumers of recreational cannabis in the world, respectively. A 2019 AIIMS study corroborated these estimates, reporting that 2.8% of Indians (3.1 crore people) consumed marijuana products in the previous year. Incidentally, less than 10% of users suffered from harmful dependent consumption, as compared to 20% for alcohol.

Meanwhile, a nascent hemp industry has emerged in the last decade, said Delzaad Deolaliwala, co-founder of Bombay Hemp Company (BOHECO). “When BOHECO started in 2013,” he told me in an interview for an earlier article, “there was barely anyone in the market. This number has grown to over 40 in the time since.” Even Patanjali considered venturing into this space in 2018. At the moment, companies here focus largely on apparel, medicines and food products.

The Uttarakhand government took a crucial step in the right direction by legalising the licensed cultivation of low-THC hemp in 2016. Since then, Madhya Pradesh has considered doing so, though concrete action has been lacking. In 2019, the Union Government permitted research and development in Uttar Pradesh as well. Though there’s money to be made, jobs to be created and innovation to be encouraged here, legal limitations have stifled supply chains to the point of economic unviability, according to Tarun Jami. Jami is the founder of a startup producing carbon-negative building materials called GreenJams, which produces hempcrete. However, the limited domestic supply of hemp has made hempcrete about six times the cost of cement-based concrete, damaging its commercial potential.

The quality, as well as quantity of hemp, supplied needs to improve, requiring investment in research and development of better seeds and cultivation practices. Dilsher Dhaliwal, the founder of Everest EcoHemp, India’s largest licensed hemp producer, said in an earlier interview, “Government regulations have a role to play. Cannabis’ classification as a narcotic places it under the jurisdiction of the excise department. With the excise department being a regulatory body, research into hemp was difficult to conduct until recently.” He added, “keeping THC levels below 0.3% isn’t easy, since Indian cannabis species tend to be high-THC, seeds need to be grafted with imported low-THC varieties, which involves a great deal of trial-and-error.”

Though this is happening on a limited scale – BOHECO, for example, works with institutions like the G.B. Pant National Institute of Himalayan Environment in Uttarakhand and the National Botanical Research Institute in Lucknow – a great deal more is required to unlock the plant’s potential.

Living up to high potential

Decisive action in favour of deregulation could clearly benefit India in a number of ways – there’s money to be made, jobs to be created, an agricultural sector to be boosted, climate change to be fought, and tax revenue to be earned.

We’re in an opportune moment for such action to be taken in many ways. The market for cannabis products, both recreational and industrial, seems to be on the verge of major growth. Though China dominates global supply, its grasp over the market might weaken if companies consider moving supply chains out of the country, as they have throughout 2020. This sentiment likely won’t last and must be taken advantage of.

This opportunity though isn’t India’s alone. Other countries, incentivized by the UN’s reclassification and economic potential, might follow suit as well. The times are changing in the world of cannabis, and India can’t afford to be left behind. If it aims to challenge China’s supremacy and live up to its ambition of becoming a global economic powerhouse, it must take similarly decisive action. In many ways, getting with the times should be perfectly natural – this has been a part of the country’s culture for millennia. Surely, it can’t let a few decades of stigma keep it from embracing its past, and more importantly, what could be a very promising future.

Shantanu Kishwar is a Teaching Assistant at FLAME University, Pune. He also writes The Curiosity Catalogue, a fortnightly newsletter.

Read all the Latest News, Breaking News and Coronavirus News here