Money Stories
21:21, 04-Apr-2019
A hot commodity sparks interest: What is industrial hemp?
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The concept of industrial hemp fermentation earlier this year attracted the attention of a large group of investors. Major industrial hemp-related stocks surged in China on Thursday after days of large fluctuations following a long rally that began in January.
Industrial hemp is a plant that belongs to the genus of Cannabis with non-toxic and contains a delta-9 tetra-hydro-cannabinol concentration of no more than three-tenths of a percent on a dry weight basis so that it wouldn't cause any addiction.
The hemp is widely used in sectors including medicine, skin care, food, textile, and construction. Many research institutes estimate that such hemp contribute to a 500-billion-U.S.-dollar market globally.
China's industrial hemp stocks have been going strong since mid-January when A-share listed company Shunhao announced that one of its subsidiaries gained approval to grow industrial hemp. Shunhao's share price has jumped about five fold while the number of related concept stocks also increased from 8 to 35 in fewer than two months.
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However, only Shunhao was allowed to produce samples for testing. More than 20 cannabis-related stocks fell by 10 percent daily since last Thursday after the Shenzhen stock exchange asked several companies to disclose progress on their plantings.
Chinese regulators have been highly strict about industrial hemp. Currently planting is only legal in Yunnan and Heilongjiang provinces. However, China is the world's leading producer and exporter of industrial hemp, taking up about one third of the total market share.
(CGTN's Gao Songya also contributed to the story.)