These Indian startups are betting on cannabis without the high

New Delhi: In 2014, when Harshaavardhan Redi Sirupa, co-founder and chief executive officer at Namrata Hemp Co. (NHCO), approached the department of excise in Andhra Pradesh for permission to cultivate cannabis, he was directed to the department of agriculture. Four years later, the agricultural authorities led Sirupa to the revenue department. “People in the industry are totally confused about who has to give the licence,” says Sirupa.

Cannabis is misunderstood legally and industrially in India. Despite a rich history of cannabis usage dating back to over 2000 years, marijuana (its other name) is illegal and criminalized under the Narcotic Drugs and Psychotropic Substances Act, 1985, mainly for the “high” it gives. India’s rooted history in the drug is evidence of the high-quality cannabis that Indian soil has the capability to produce, according to industry experts.

It is only now that several firms are looking to create businesses around it. “It (the trend) is a part of the global movement,” says Avnish Pandya, co-founder and director at Mumbai-based The Bombay Hemp Co. (BOHECO), pointing at the several global firms who have created successful businesses around cannabis. “In India we always need external validation from socio-political to economic matters.”

Over the last five years, there has been a mushrooming of cannabis and hemp-based (the non-drug component) start-ups engaging in medicinal research, cosmetic products, textile, accessories and even food. However, the raw material is either imported from China or Europe or bought from Uttarakhand, the only state to have legalised the cultivation and production of hemp for industrial purposes. Cannabis can be used both for treating symptoms as well as pain management in diseases such as cancer and Alzheimer’s. It has analgesic properties, of course. However, unlike opium, cannabis doesn’t have side effects and is therefore gaining popularity among healthcare professionals and researchers. Start-ups such as BOHECO and Nirog Street have collaborated with the Council of Scientific and Industrial Research (CSIR) for medical research to find cures for epilepsy, Alzheimer’s, multiple sclerosis and cancer among other diseases and conditions. In fact, CSIR has obtained the licence to produce such a cannabis-linked drug from the Jammu and Kashmir government recently. However, the research is still in the pipeline.

BOHECO, which was founded in 2013, has 15,000 unique customers. While the company does not reveal details about its customers or the annual turnover, 70% of its customers are currently from the textile sector. The industrial hemp textile market in India could be valued at an estimated Rs ₹240 million, according to the Natural Fibre Policy 2011 report by the ministry of textiles.

Ram N. Kumar, co-founder of Nirog Street, a marketplace for Ayurveda doctors, estimates the cannabis medicine market to be around $1 billion for pain-management in the next two years. “It has a huge export capability,” says Kumar.

The problem is that while Indian companies approach a state government for license to operate in the cannabis industry, it actually falls under the Central Bureau of Narcotics, who in turn passes it to the respective state government. Apart from Uttarakhand, two states (Himachal Pradesh and Jammu and Kashmir) have sought to legalise cultivation of cannabis. Clearly, there is a need for change in the NDPS Act for scheduling cannabis according to its uses, says Dr. Ram Vishwakarna, director of CSIR, adding that “A lot of firms from Canada and Israel have approached CSIR for export of cannabis.”

In the next five to ten years, the cannabis industry would be around $10 -18 billion, says Sirupa, who is now exploring the use of hemp in automobile-car parts and building material at NHCO. “India is desperate for the medicinal benefits of cannabis,” adds Avnish Pandya, co-founder and director at BOHECO. “We have had traditional knowledge of cannabis and the start-ups in the space are trying to translate it into the modern context.” While legalising cannabis in India for its multiple applications still seems a long way, the start-up ecosystem is betting big on hemp managing the legal hurdles along the way.