Many investors saw that foreign countries have high CBD content of cannabis seed varieties, and concluded that “the overseas production of industrial hemp has advantages over China.” Are there any differences between Chinese and American seeds? Why is there a difference? Are Chinese companies at a disadvantage?
4.1. Can foreign hemp seed varieties with high CBD content be grown on a large scale?
Cannabis seeds with high CBD content do exist abroad, but high CBD often means higher THC. Under natural conditions, the ratio of THC to CBD in cannabis is about 1: 1, which means that high-content CBD seeds that are not screened and modified often contain higher levels of THC.
According to the “High CBD Content Varieties” column on the SeedSupreme website, varieties with high CBD tend to have higher THC content. For example, 1024 Feminized Seeds may have a 5% -10% CBD content but will contain 20% -25% THC.
Because China has very strict THC restrictions, varieties other than industrial cannabis are not allowed to be planted. Under this restriction, domestic scientific research institutions have worked hard to increase the CBD content of cannabis varieties, while keeping the THC content at a low level. E.g:
- Hanma No. 7: THC (0.0903%), CBD (1.2073%) (production test quality analysis results);
- Long Hemp No. 5: THC (0.092%), CBD (1.12%) (quality analysis results of production trials);
- Yunma No. 8: THC (0.07%), CBD (1.33%), which has greatly exceeded the ratio of THC and CBD in the original seed state.
The reason why the United States and other countries can have high levels of CBD seeds is because the THC restrictions are relatively loose. However, it is still uncertain whether the seeds with high CBD content can be used on a large scale in the United States and other places.
Because high CBD seeds tend to have high THC, few of these varieties belong to industrial hemp. For example, although 33 states in the United States have completed various degrees of legalization, the transportation of CBD oil is still strictly controlled. Especially for aircraft passengers, if the departure state and the arrival state have different policies, then the passenger may be investigated for carrying prohibited substances.
CBD currently extracted from industrial hemp does not have this problem. Since industrial cannabis became legal in the United States in December 2018, it is legal for passengers to carry CBD oil from industrial cannabis, but it is still illegal to carry CBD oil from other cannabis varieties on airplanes. For travelers traveling with CBD oil, the way to avoid trouble is to carry CBD oil extracted from industrial cannabis and bring an analysis report of the product (proving that its THC content is lower than the limit of recreational cannabis).
Therefore, when comparing the differences between China and foreign countries, the comparison should be kept in the same dimension as much as possible. For example, to compare the CBD content of industrial cannabis, the CBD content needs to be compared on the basis of the THC limit, and the THC content limit cannot be simply ignored. Chinese companies should see the differences between domestic and foreign policies, and cannot blindly promote foreign seeds with high CBD content, and even hope to introduce foreign seeds directly into China.
4.2. CBD product cost: Seed cost accounts for a relatively low proportion, high purity increases the selling price
Production costs account for about 19% of the total selling price. According to the Leafly report, 1 gram of CBD oil sells for about $ 117, and its production cost is about $ 22.5. In terminal products, the cost of retailers (such as pharmacies) accounts for 50% of the terminal price.
The higher the purity of CBD extraction, the more expensive the price. According to CBD information, the price of CBD with a purity of about 95% is 4 to 14 $ / g, while the purity of 99.99% can be sold for 100 $ / g. The improvement of purity depends on the purification technology of the processing enterprise. Good purification technology creates a strong moat for the company.
It is concluded that there are differences between Chinese and foreign seeds, but the cost of seeds accounts for a limited proportion of the total cost. In addition to pursuing seeds with high CBD content, there are many directions that companies can pursue, such as increasing planting output, improving CBD purification efficiency and purity, grasping sales channels and brand building, etc.