Here is how Bombay Hemp Company is trying to create business out of Cannabis

Representative image.

Representative image.

Since ancient times, cannabis-based products like Bhaang have been a part of Indian culture, social customs and festivals, but the line between use and abuse is rather very thin.

It was the narrative of abuse that denied cannabis its rightful place in the world of medicines and wellness in India. But it is the same Hemp or Cannabis that fuelled the startup idea of six students of Mumbai-based HR College of Commerce and Economics — Avnish Pandya, Chirag Tekchandaney, Delzaad Deolaliwala, Jahan Peston Jamas, Sumit Shah, and Yash P Kotak.

In 2013, they founded Bombay Hemp Company (BOHECO). The plan was to create a vertically integrated firm that uses hemp to make textiles, building materials, and Ayurvedic remedies for health and wellness.

It wasn’t easy, as BOHECO was up against several hurdles.

Regulatory hurdles

“Cannabis is considered a narcotic commodity under the NDPS Act. Section 10 (2) (d) of the NDPS Act, 1985, requires cannabis to be delivered by the cultivators to the excise department of state governments. But in the absence of any provision in the NDPS Act, the states cannot resell the cannabis produce to private entities for extraction of cannabinoids or compounds used in medicines. Also, most states haven’t framed NDPS rules providing for the cultivation of cannabis,” said Delzaad Deolaliwala, Co-Founder and Director of Accounting & Legal Affairs of BOHECO in an interview to Moneycontrol.

According to Chirag Tekchandaney, Co-Founder and Director of Marketing, the second challenge was the lack of standard varieties or seeds of cannabis to cultivate in India. The absence of standard extracts is a hindrance to making medicines of consistent standards.

BOHECO wasn’t ready to wait; it collaborated with government CSIR laboratories on research projects to produce standard varieties of cannabis.

The job is not done with seeds, BOHECO is assisting local farmers in cultivating the crop by providing optimum seeds, teaching them best practices in cultivation techniques, and innovating agro-products.

The other most important aspect is creating awareness. Tekchandaney says the company spends about half of its time in building ecosystems and advocacy of industrial hemp and its benefits to society.

Growth phase

“We want to grow at least 2.5 times our current size by the end of FY22. We are very close to getting the licence from an Indian state to grow hemp at a commercial level. The idea is to kick off commercial cultivation from a medical point of view, which gives a lot more control over quality and price, and standardisation of raw materials. We are also focussing on having a lot more control over the supply chain, where we can manufacture and do R&D on our products,” Tekchandaney noted.

While it is still a work in progress, BOHECO says states are opening up.

In July 2018, Uttarakhand became the first Indian state to permit large-scale commercial cultivation of industrial hemp. The licence was awarded to the Indian Industrial Hemp Association (IIHA) to plant cannabis on 1,000 hectares. The IIHA will also develop a seed bank, aiming to cultivate hemp across 10,000 hectares within five years for textile fibre.

Aside from medical hemp collaborations, BOHECO will market Food Safety and Standards Authority of India (FSSAI)-approved hemp seed-based food products manufactured from licensed crops cultivated in Uttarakhand and Uttar Pradesh, where the government, in October 2018, permitted low-THC hemp cultivation for medicinal and industrial use.

Currently, BOHECO sells its products through its own e-commerce website and through channel partners.

Tekchandaney says the company has at least 30 percent repeat customers.

It isn’t just BOHECO; now there are over 30 companies working in the hemp and cannabis space in India.

BOHECO estimates the general market size of industrial use of hemp is between $500 million and $750 million annually.

“We are still a nascent sector with huge room for growth,” Tekchandaney added.

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