Should Ukraine follow the path of legalization “like in Canada”?
In the fall of 2018, Canada fully legalized cannabis, becoming the second country after Uruguay to legalize medical and recreational use of marijuana. Oleksandr Ignatyuk, President of the Association "Ukrainian Industrial Hemp", told the Agroinsider media resource whether it is profitable for Ukraine to follow the example of Canada, and outlined the prospects for the hemp business in the country.
Legalization in Ukraine following the example of Canada: why?
According to Ignatyuk, the volume of consumption for recreational purposes cannot be compared with the volume of the medical cannabis market. Medcon is used for neuropathic pain, cancer, AIDS, glaucoma, autism spectrum disorders, epilepsy and other diseases, and in 3 years in the US it will occupy more than 50% of the entire cannabis market. And we are talking about certain varieties of industrial hemp, which have a low level of THC - the main psychoactive component - but a high content of other cannabinoids, which gives a strong therapeutic effect.
All over the world there is a tendency to increase the sowing of technical hemp. In addition to the therapeutic direction, this cannabis will be used for industrial purposes. For example, China is going to replace cotton with cannabis, since this crop is more unpretentious in care and gives a profitability of 50-70% - that's $500-$700 per hectare. And if you are engaged in the processing of leaves and inflorescences, that is, work for the medical consignment market, then the income per hectare will increase to $100,000. It is this area that is most beneficial for the country, and, according to Ignatyuk, it should be developed first.
What is the situation with hemp business in Ukraine now
According to the UN Convention on Narcotic Substances, ratified by Ukraine, technical hemp can not only be grown for industrial purposes, but also used in research and administered to patients. However, according to the law of Ukraine, the use of cannabis is allowed only in industry. Therefore, while the area under hemp crops is growing in the world, in Ukraine it is decreasing every year - in 2017, cannabis fields occupied only 2.7-2.8 thousand hectares. With such a high profitability of the hemp business - 50-70% - it is strange to see such low production volumes, but there are 2 reasons for this:
Lack of capacity. In Ukraine, there are only 4 factories - a legacy of the USSR - for processing hemp "straw" for the production of textiles, shoes, paper, and one more was opened in 2018 thanks to foreign investment.
Non-working mechanism of production control by the state. Businesses face significant difficulties in obtaining permits and also endure excessive attention from law enforcement. Often this leads to corruption: the creation of charges for spurious reasons and the dismissal of cases for bribes.
About the prospects of hemp business in Ukraine
In 2018, there were only 30 hemp-growing enterprises in the country, while Ukrainian selection has been at the forefront of the global hemp market since the 1930s. The unique therapeutic varieties developed by Ukrainian scientists are already used as raw materials for the production of cannacosmetics, dietary supplements, and food products. Science is still ahead of business, but this also suggests that business has room to develop. The main thing is to create the necessary conditions, at least by solving the two problems mentioned above.
In Ukraine during the USSR, up to 120 thousand hectares of hemp were grown, which was processed at 35 factories. If such production volumes are set now, the country's budget will be annually replenished by about $100 million. And if it is also allowed to grow cannabis for medical purposes, then not only cannabis growers will benefit, but also the state - due to taxes on the millions that entrepreneurs legally earn. In this case, according to Ignatyuk, no legalization “like in Canada” is needed.