China Opening Up Trade Relations Through CBD

by | Dec 22, 2020

Detroiter Karhlyle Fletcher is the host of High Lit, a cannabis research and classic literature podcast featuring leading voices and independent music. In addition to years in written and video cannabis journalism, he is also a traditional author.

In Hong Kong and beyond, western companies are entering the new massive market. 

China and Topical Cannabinoid Skincare

Entering into the Chinese market is difficult, as steep regulations surrounding cannabis make it difficult to enter. Noticing the CBD market’s potential, China is happy to enter into the industry but slowly. The most common CBD-infused products sold in the country are externally applied, such as skincare products and toothpaste, not your typical cartridge or tincture. 

However, the Asia Pacific is the largest market globally for cosmetics. Interestingly, China is the biggest consumer of CBD toothpaste. Due to this unique position as a market, the rest of the CBD industry should keep their eyes on Uncle Bud’s, backed by Earvin Magic Johnson and Hempathy. Both of these American companies have been approved to sell their CBD products in the country.  Hempathy is notable for being the first American manufactured, pure hemp-seed oil beauty brand to launch in China. Both have partnered with Alibaba Group’s Tmall, formerly known as tobacco mall. 

Uncle Bud’s partnership with Magic Johnson and China is likely to hit big because not only does China love the NBA, but they are also starting to love CBD. With star power and growing interest, there’s sure to be a profitable corner to the market to find. Also, as the rest of the world is edging towards legalizing cannabis, China will likely follow suit and join the transformative 2020s. 

In such a massive region as China, there are bound to be complexities and differences. One significant difference does exist, and there is a city within Chinese borders that already serves legal cannabinoid products in daylight businesses. 

Special Regions, Special Rules, Hong Kong and CBD

The subject of many contentious headlines and stories, Hong Kong is technically a Special Administrative Region in China. While Hong Kong is a part of China and populated by Chinese people, several aspects of the country are unique, including its CBD cafes and pop-ups. 

According to Fiachra Mullen, a co-founder of Asia Pacific’s first CBD cafe, Found, “Hong Kong is one of Asia’s most progressive cannabinoid markets. Unlike other parts of the region — Australia, New Zealand, Singapore — it’s quite a progressive cannabinoid law in Hong Kong, so we can sell most cannabinoids in Hong Kong as foods as long as we don’t have any THC in the products,” Mullen told Sky News. 

Now Pure Sunfarms, a company based out of British Columbia, Canada, partnered with Found and Lane Crawford, a Luxury Department store, to offer a limited-time gift set at pop-up shops around Hong Kong. These shops have been active since Nov. 13 and will be active until the end of December. Along with gummies specifically tailored to the Hong Kong consumer, Pure Sunfarms will be offering chocolates, bath salts, and tea bags.

Regarding Hong Kong law, the local center for food safety states that transporting any THC is prohibited due to the Dangerous Drug Ordinance, but that CBD is not treated as such. However, all products containing CBD and no prohibited substances must be registered with the Pharmacy and Poisons Board and meet standards before being sold. Still, this is much more relaxed than the rest of the Chinese region. Pure Sunfarms hopes that this collaboration can educate the Hong Kong consumer about CBD and spread awareness about the novel substance. 

Trials Troubles and the Future of Cannabis in China

While the relationships between Canadian companies and Hong Kong are promising, custom officials in Hong Kong have blamed Canada for Hong Kong’s 500% in cannabis seizures from 2018-2019. However, as far back, or as recent as 1994, two of Hong Kong’s top judges were pushing for legalization. 

Mr. Justice Godfrey, who became a Hong Kong High Court judge in 1986, said, “I am for decriminalization. Since human beings are allowed to smoke themselves to death with cigarettes, they ought to be allowed to smoke marijuana in the privacy of their own homes.”

Mr. Justice Kaplan, who became a High Court Judge in 1990, said, “there is clearly a growing demand for the drug and a lot of money to be made from it. So if someone is going to supply it, why should it be criminals? “Why not have the Government supply it? That way, its use could be much more easily controlled, its use restricted, and its users educated and separated from criminal elements.’

However, in the current environment, several teens have been arrested in connection to $7.6 million worth of cannabis imported to Hong Kong via air. Mr. Kaplan’s suggestions would almost certainly address this issue at its roots, and he was telling them to Hong Kong over two decades ago. 

Deeper in China, progress is being made as a 150,000 square-foot EU good manufacturing practice compliant cultivation and extraction operation is being constructed by Mary Agrotechnologies in Yunnan. While the world waits for Chinese legalization, China will likely corner the market once it’s ready, just as it has for many other materials.