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  • Kündig Group: Innovation
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  • Kündig Group: Innovation
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Tradition / 13. December 2018

The cannabis plant and the agricultural economy

Regarding the history, medical importance and big business surrounding probably the most controversial plant in the world.

In August 2018, former Wrigley company’s CEO, William Wrigley, announced that he had decided to start a new business venture. He no longer deals with the sale of chewing gum and confectionery, but with the sale and cultivation of a long-controversial plant: Cannabis/hemp/marijuana.

But what about the history and effects of cannabis? How big is todays’ hemp business and who dominates the market? We take a behind the scenes look at one of the 21st century’s most interesting agricultural developments: the history of one of the most controversial plants in the world.

Fibers, seeds and flowers: the short history of cannabis

The first civilisation to record the use of cannabis were the ancient Chinese. The plant, named Ma (麻), provided nutritious seeds for domestic consumption as well as fibres that were well-suited for making clothing and other items. In Europe, the oldest traces of the plant have been dated to around 5,500 years old and come from the Eisenberg area of Germany.

The first traces of cannabis cultivation are dated to the Stone Age. Due to its relatively easy cultivation and cross-breeding, its resistance to pests and variety of uses, hemp was enormously popular at that time. Practically the entire plant can be utilised in some way or another. Hemp produces pulp high in cellulose which is comparable to wood - the most important raw material for papermaking.

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The triumphant advance of cotton in the 18th and 19th centuries, increasingly supplanted all other plant fibres within the textile industry. This combined with steadily declining prices of wood-based paper production impeded the development of the hemp industry. With the increasing use of the flowers or buds as an intoxicant and its subsequent illegalisation in the 1920’s, the cultural view of cannabis changed rapidly over the course of the 20th century. During the 1920s, most European countries put cannabis on a par with opiates like heroin. In the 1930s, the demonization of marijuana began in the United States. Following the bans on cannabis cultivation, industrial hemp production in the Western world practically ceased to exist.

It would take until the late 1990s, for hemp products to be made available to the consumer again. Today, 52 varieties of the hemp plant have been certified for use in the European Union. The most innovative hemp products today include, reinforced hemp fibre monocoque automotive frames, hemp-based cosmetic skin care products, and fitness drinks that capitalize on hemp seeds’ high protein content.

THC and CBD: cannabis and cannabinoids in medicine

The medicinal use of the hemp plant is almost as old as its use in clothing production. Ancient Chinese documents on agriculture and medicinal plants mention Ma as a cure for malaria, rheumatism and many other diseases. Marijuana (the dried flowers) and hashish (the resin of the flower fibres) were also used by many other cultures’ not only as a traditional medicine, but also as a food or intoxicant.

The plant contains a variety of natural ingredients. Dronabinol, or Δ9-tetrahydrocannabinol (THC) and cannabidiol (CBD) have been identified as particularly pharmacologically effective components. Dronabinol is the primary active ingredient in the cannabinoid group found in hemp. The active ingredient is mainly used for pain, spasticity, loss of appetite and nausea brought about by serious illness. The Cannabidiol hemp plant is also used, among other things, as a drug for anxiety or muscle spasms and has antibacterial and anti-inflammatory properties. The active ingredients are usually administered in the form of drops, capsules or oral solutions.

In Switzerland, medicinal use is allowed with permission from the Federal Office of Public Health. In Austria, cannabis is only considered a prescription medicine if it is in a pre-approved form of consumption. In addition, cannabis flowers and extracts have been authorized as medicinal products in Germany since 2017, so long as they have been cultivated for medicinal purposes under state control or imports. In most other European countries, cannabis-based medicines are available in one form or another. The recent developments thus lead to a clear conclusion: despite the widespread illegality of cannabis as a means of enjoyment and intoxicant, it’s use in medicine is becoming increasingly popular.

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Business with Blossoms: the new hemp industry

The cannabis industry is booming – and some major companies and investors are already hoping for a hefty profit from the hemp hype. Amongst the biggest news stories coming out of the hemp industry in 2018, was the merger of Canada's two largest cannabis producers, Aurora Cannabis and its rival Medrelief. In November 2018, the Canadian company Aphria, also announced the acquisition of German pharmaceutical importer CC Pharma. Parallel to the import of hemp, Aphria hopes to accelerate the growth of domestic hemp cultivation within Germany. In Germany the cannabis agency will grant licenses for the cultivation of the plant for medical purposes from 2019 onwards. In the US, Constellation Brands (Corona Bier) announced that it has invested nearly $ 4 billion in shares of Canadian marijuana producer Canopy Growth. In addition, the US beverage giant Coca-Cola is also considering the idea of investing in CBD-containing wellness drinks.

It’s not only private companies which are curious about cannabis. Individual countries also hope that legalization will add economic value. For example, by legalizing the use of cannabis as a pure stimulant in California, market experts have predicted a massive increase in sales and employment. According to one study, it is estimated that around $ 40 billion will be generated by 2021, with more than 400,000 new jobs being created in the United States.

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Certified cultivation: Switzerland as a pioneer in the European market

While the legalization of cannabis cultivation in Germany and Austria is being discussed, Switzerland has already taken a big leap forward. Hemp is grown here on a large scale for medicinal products. So long as the THC value is less than one percent, hemp cultivation is permitted by Swiss law. Due to the increased CBD concentration and low THC content, the intoxicating effect during consumption is much lower, whereas the medicinal potential is higher. These legal hemp products are therefore relatively uninteresting for "potheads" but are perfectly ideal for pharmaceuticals, cosmetics and dietary supplements. Switzerland thereby intends to consolidate its pioneering role in the European medical marijuana market for the foreseeable future.

Hemp can grow almost anywhere and is very resource efficient. The plant can be completely utilized and does not require any synthetic spraying agents during cultivation. Be it traditional hemp products such as paper and clothing or modern natural remedies with high CBD content: The hemp plant has been a part of human society for millennia. Today, quite a few big companies and investors hope for a large profit due to the hemp-hype, and the public discussion surrounding this useful and popular plant will not lose any of its significance in the future either. Here at Kündig we keep our eyes and ears open, and eagerly follow one of the most interesting developments in the agricultural sector of the 21st century.