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Investigation | "Rise and Fall

  • January 10, 2023 4:50 PM PST

    Original Title: Investigation | "Rise and Fall": The Rise and Fall of Industrial Hemp in Three Years Every reporter: Yu Yifeng Every editor: Liang Xiao Cannabis, a strange plant native to East and South Asia, has had both devil and angel faces since its efficacy was discovered-on the one hand, it is the source of drugs as famous as opium poppy and Coca, on the other hand, it has medicinal and economic value. The controversy surrounding hemp has never stopped, and the toxic industrial hemp has spread in the cracks of legislation and become one of the hottest outlets three years ago. More than 40 listed companies in China have announced their entry into this field, and as long as the concept of industrial hemp is touched, the stock price often "soars to the sky". The turning point occurred on May 28, 2021. At that time, the National Medical Products Administration issued a notice on updating the catalogue of prohibited raw materials for cosmetics, and the momentum of cannabis nut, cannabis seed oil and cannabis leaf extract was also on the list. Like a basin of cold water falling from the sky, the heat of industrial hemp has dropped sharply. Nowadays, in the capital market, few listed companies have announced the performance information of industrial hemp, instead of the news that the project is stagnant or waiting for delivery. Yunnan is the first province in China to legalize the cultivation of industrial hemp, and it is also the most suitable area for the cultivation of industrial hemp, which has been planted all over the province. In June this year, a reporter from Daily Economic News visited several industrial hemp cultivation counties in Yunnan and found that there were few industrial hemp cultivation in the undulating mountains of Yunnan. The processing and refining workshops of some listed companies are also in a state of shutdown. Some growers told reporters that they had lost all the millions of yuan they had invested. The progress of some industrial hemp projects is not as expected. Industrial hemp refers to the hemp with THC content less than 0.3%, which is mainly used in medicine, food health care, agricultural cultivation, feed and other fields. From the perspective of cultivation scope, China has not yet liberalized industrial hemp cultivation on a large scale, only in Yunnan and Heilongjiang provinces can it be legally cultivated. Chengzhi Stock (SZ000990, share price 10.21 yuan, market value 12.79 billion yuan) is one of the first listed companies to lay out industrial hemp. By holding Yunnan Hanmeng Pharmaceutical Co., Ltd. (Hereinafter referred to as Yunnan Hanmeng) in Kunming, Chengzhi shares have been involved in the field of industrial hemp processing and extraction. In March 2019, through its wholly-owned subsidiary Beijing Chengzhi Hi-Tech Biotechnology Co., Ltd. (Hereinafter referred to as Chengzhi Hi-Tech), Chengzhi shares transferred 37.14% of Yunnan Hanmeng's equity at a consideration of 200 million yuan, and increased the capital of Yunnan Hanmeng by no more than 138 million yuan. After the completion of the capital increase, Chengzhi Gaoke became the controlling shareholder of Yunnan Hanmeng, holding 49% equity. As for the source of funds, Chengzhi shares and Chengzhi Hi-Tech are solved through self-owned and self-raised funds. At that time, Chengzhi shares said that Yunnan Hanmeng had obtained the pre-approval qualification for the preparation of industrial hemp mosaic processing in Guandu, Yunnan. The merger of Yunnan Hanmeng into Chengzhi Hi-Tech will enrich the company's product line and cultivate new profit growth points. Chengzhi Hi-Tech Holdings Yunnan Hanmeng has strategic significance for the company to enter the industrial hemp industry. Investors of Chengzhi shares are also very concerned about the progress of the company's industrial hemp business. Almost every once in a while, shareholders ask Chengzhi shares about the situation of Yunnan Hanmeng through the interactive platform, and most of the replies of Chengzhi shares are that the delivery of factory buildings is in progress, with specific attention to relevant announcements. On June 17, the reporter came to Yunnan Hanmeng, located in Guandu Industrial Park, Kunming. On that day, Kunming had a clear sky, and on the road of the park named after the number plate, the petals falling on the ground were blown up by the wind, revealing the vitality of summer. By contrast, the factory area of Hanmeng in Yunnan is silent. Yunnan Han League has two gates in the north and south, the south gate has the company's logo and company name, and the guard pavilion has only one staff member. The north gate for people to enter and exit is a mobile iron gate, and there are more than ten cars parked outside the gate. Expand the full text Reporters at the North Gate saw that there were two office buildings, several factories and several storage tanks in the company, but few workers came in and out. A staff member of Beimen Security Pavilion came out and told reporters that the factory building in the factory area had been built two years ago, but it had not started production, while the office building had people working. Yunnan Hanmeng Factory located in Guandu Industrial Park, Kunming The reporter contacted Cao yuangang, Secretary of Chengzhi Stock Company by telephone. When asked about the progress of the industrial hemp project, Cao yuangang said that "there is no special progress". Because the plant has not been fully delivered, it has not started formal production. Cao yuangang said that in the industrial hemp project, plant construction is not the core thing, the main value of industrial hemp production is reflected in the process extraction. Our technology is mature, has been produced before, there is a supply of goods technology, the main problem is the plant. In addition, Yunnan Hanmeng has also developed a small program, but there is no product sales on the small program at present. Factory has not been fully delivered, industrial hemp has been unable to formally put into production, then how about the cultivation of industrial hemp in Yunnan Hanmeng? According to the public information of Chengzhi Stock Company,jacketed glass reactor, Yunnan Hanmeng Industrial Hemp Planting Demonstration Base is located in Yunji Community, Tangzi Town, Xundian County, Kunming City, Yunnan Province, covering an area of 3000 mu. It is 1900 meters above sea level, with an average annual temperature of 14.5 C, an average annual precipitation of 1100 mm and an average annual sunshine of 2069.8 hours, which is the most suitable environment for the growth of industrial hemp. In Yunji Community, Tangzi Town, Xundian County, Kunming City, local villagers told reporters that in 2020, some growers rented the land of local villagers to grow industrial hemp, but only planted it for one year, and then no more. The land lease contract provided by Xia Jinpei, a villager, shows that the contract signed with the villagers is Kunming Shangfu Planting Co., Ltd. (Hereinafter referred to as Kunming Shangfu). The agreement stipulates that the purpose of land lease is industrial hemp cultivation, and the lease term is 3 years. Land lease contract signed between Xia Jinpei and Kunming Shangfu Under the guidance of Xia Jinpei, the reporter came to the field where industrial hemp had been planted. There is also a slightly dilapidated sign in the field, which reads "Chengzhi Hanmeng Industrial Hemp Planting Demonstration Base". But now, the fields have been replanted with corn and tobacco. Sign of Yunnan Hanmeng Industrial Hemp Planting Base of Chengzhi Co., Ltd. The reporter contacted Ma Chenglong, the legal representative of Kunming Shangfu. He told reporters that the original planned area for planting industrial hemp was 3000 mu,cbd crystallization equipment, but the final planting area was only 2700 mu. Ma Chenglong explained that the reason for planting only one year was that the sales market was not good. The original industrial hemp plots in the base have been replaced by other crops. In fact, Ma Chenglong signed a planting service contract with Yunnan Hanmeng to grow industrial hemp. He said that the sales situation was not good because Yunnan Hanmeng did not buy the industrial hemp he planted as scheduled. Industrial hemp grown in 2020 was not acquired until March this year. Not only that, Ma Chenglong said that Yunnan Hanmeng also lowered the purchase price and did not pay the price agreed in the contract. I have invested about 1 million yuan, and now I can't get it back. When talking about the benefits of planting, Ma Chenglong said. From cooperation to confrontation Among the growers of industrial hemp, Ma Chenglong's fortune is not the worst, and after the growers planted industrial hemp, the purchaser refused to buy it, so they had to go to court. Yunnan Jinyu Agricultural Development Co., Ltd. (Hereinafter referred to as Jinyu Agriculture), which grows industrial hemp, is fighting a contract dispute with the purchaser, Yunnan Huayun Jinxin Biotechnology Co., Ltd. (Hereinafter referred to as Huayun Jinxin), and is currently waiting for the second trial. In November 2019, Shenzhen Datong (SZ000038, with a share price of 411 yuan and a market value of 2.15 billion yuan), which had not been ST at that time, acquired 51% of Yunnan Chengbang Fuji Biotechnology Co., Ltd. (Hereinafter referred to as Chengbang Fuji) through its wholly-owned subsidiary Qingdao Datong Capital Co., Ltd. at a purchase price of 142.8 million yuan. Yunnan Huayun Jinxin Biotechnology Co., Ltd. (Hereinafter referred to as Huayun Jinxin) is a wholly-owned subsidiary of Chengbang Fuji, which owns industrial hemp mosaic processing and production facilities, and has obtained the Yunnan Industrial Hemp Processing License and Planting License. Huayun Jinxin is registered in Binchuan County, Dali Bai Autonomous Prefecture, Yunnan Province. According to the announcement of Shenzhen Datong, by June 2021, Shenzhen Datong had obtained an industrial hemp planting license with a total planting area of 10000 mu issued by the relevant departments of Dali Prefecture through its holding subsidiary, and had cooperated with local farmers in Dali Prefecture to carry out planting business. There are two industrial hemp cultivation partners in Shenzhen Datong, one is Yunnan Haorun Agricultural Development Co., Ltd. (Hereinafter referred to as Haorun Agriculture), a local company in Dali Prefecture, and the other is Yunnan Jinyu Agricultural Development Co., Ltd. (Hereinafter referred to as Jinyu Agriculture), a company in Kunming. Weng Junmei, the legal representative of Jinyu Agriculture, told reporters that since 2020, the company has planted industrial hemp for Huayun Jinxin in Jizushan Town, Binchuan County, Dali Prefecture for two consecutive years, and signed a mosaic purchase contract with Huayun Jinxin for industrial hemp. According to Weng Junmei, one mu of land can produce about 200 kilograms of flowers and leaves. In 2020, 1000 mu of industrial hemp was planted, with an output of about 200 tons; in 2021, 3000 mu of industrial hemp was planted, with an output of 600 tons. (Huayun Jinxin) In the first year, we bought our industrial hemp according to the contract, hemp extraction centrifuge ,wiped film evaporator, but in the second year, we refused to buy it for various reasons. Weng Junmei said that after the state issued a policy in 2021 that industrial hemp (extract) could not be added to cosmetics, Huayun Jinxin began to refuse to buy industrial hemp from Jinyu Agriculture on the grounds of insufficient planting area and wrong varieties, and took them to court. Huayun Jinxin and Jinyu Agriculture have a relationship of entrustment and cooperation. Industrial hemp cultivation requires a planting license. Huayun Jinxin has a planting license. It entrusts Jinyu Agriculture to plant industrial hemp, and then recycles industrial hemp from its hands. The qualification of Jinyu Agriculture to plant industrial hemp is to use Huayn Jinxin's planting license. The sale of industrial hemp is unique and can only be sold to processing enterprises that have signed purchase contracts, not to third parties. Weng Junmei said that after Huayun Jinxin refused to buy, they chose to destroy the industrial hemp under the supervision of the public security department to reduce the cost of storage. In addition to the lawsuit between Jinyu Agriculture and Huayun Jinxin because of the repurchase contract dispute, the reporter also learned on Qixinbao that Huayun Jinxin and Haorun Agriculture also have related contract dispute lawsuits. The reporter tried to contact Haorun Agriculture by telephone, but the receiver hung up the phone after he learned about the reporter's appeal. On the afternoon of June 24, the reporter sent an interview letter to Shenzhen Datong about the dispute between Huayun Jinxin and growers over the purchase contract of industrial hemp. On June 27, Shenzhen Datong responded by email that the company's related matters were in litigation and there was no effective judgment yet, and the final result was subject to the effective judgment of the court. Silence after the excitement On June 20, a reporter from Daily Economic News came to Huayun Jinxin, located in Guangang Village, Jinniu Town, Binchuan County, Dali Prefecture. The iron gate of the company was closed and the sentry box at the gate was unattended. Looking through the gate, there is no staff activity in the factory. Bypassing more than half of the factory area, you can see the newly built factory building. Villagers nearby told reporters that the new plant was probably built before the end of 2021, but it has not been produced since it was built. In Huayun Jinxin factory, the reporter did not see the figure of the staff. Industrial hemp processing plants do not start production, and cultivation stops accordingly. The local village party secretary said that he had not seen anyone growing industrial hemp in his village and surrounding areas this year. Weng Junmei said that after the company's industrial hemp was rejected in 2021, it would not be planted again this year, and other crops had been planted. On the same day, the reporter came to the anti-drug brigade of Binchuan County Public Security Bureau of Dali Prefecture to consult and apply for the cultivation of industrial hemp in order to understand the local situation of industrial hemp cultivation. According to a Guide for Units or Individuals to Apply for Industrial Hemp Cultivation, Processing and Transportation Services provided by a police officer, those who want to apply for an industrial hemp cultivation license to engage in industrial cultivation need to submit corresponding materials to the public security organs, including an application form for industrial hemp cultivation, a business license, a seed supply contract and a plan contract for product sales. The above-mentioned police officers have repeatedly warned that it is now necessary to be cautious when applying for the cultivation of industrial hemp. At present, no one in Binchuan County is cultivating industrial hemp, and even in Dali Prefecture, there is very little cultivation of industrial hemp. In addition to Shenzhen Datong, Hanyu Pharmaceutical (SZ300199, share price 14.88 yuan, market value 13.64 billion yuan) is also building a planting and processing base in Dali. In May 2019, Hanyu Pharmaceutical announced that the company had signed the Strategic Cooperation Agreement with Dali Economic and Technological Development Zone, and that in the next five years, the company and its partners planned to invest 200-500 million yuan in stages to build an industrial hemp cultivation and deep processing base in Dali, with the application of industrial hemp extracts in the pharmaceutical field as the research direction. Build related supporting facilities platform. However, in June this year, when investors consulted the progress of industrial hemp on the interactive platform of listed companies, Hanyu Pharmaceutical responded that it had completed the on-site audit required before the industrial hemp license was processed, and submitted the rectification report to the Drug Control Bureau, which would disclose the progress in time according to the requirements of the information disclosure management measures. The simple understanding is that the license has not been issued, and without the license, the cultivation and processing of industrial hemp is naturally not followed up. Marijuana is classified as a drug mainly because it contains THC, which has hallucinogenic effects. In addition to THC, cannabis also contains cannabidiol (CBD), which has no hallucinogenic effects. The wind of industrial hemp is blowing towards CBD. In the medical field, CBD has the effects of controlling epilepsy, analgesia, anti-anxiety and Parkinson's disease. In the field of consumption, because CBD can help people relax, relieve muscle soreness and spasm, CBD is also added to food, beverage and skin care products as a major direction of additives. Three years ago, with the announcement of CBD legalization in 50 States in the United States, the share prices of cannabis-related listed companies in North America generally rose sharply. The heat of industrial hemp has also spread across the ocean. At the beginning of 2019, industrial hemp became one of the strongest concepts of a shares. On January 16 of that year, Shunhao shares (SZ002565, share price 458 yuan, market value 4.86 billion yuan) industrial hemp project application was approved. Since then, the company's share price has risen nearly five times in just three months. As a result, the enthusiasm of industrial hemp speculation in the market was quickly ignited. In just two months (from January 17 to March 27 of that year), Wind's 16 industrial hemp index components rose at least 40%, and seven companies rose more than 100%. However, after the prosperity, the market left a chicken feather. Three years later, some enterprises terminated the project without investment, and some enterprises only made one tenth of the investment progress, without substantial progress. The concept index of Wande industrial hemp released on February 22, 2019 is "the peak of debut". Image Source: Wind Screenshot Shouxian Valley (SH603896, share price 40.45 yuan, market value 7.98 billion yuan) announced as early as April 2020 that its subsidiary had not obtained the industrial hemp cultivation license, and the company decided to cancel the subsidiary and no longer lay out the industrial hemp project. Huaren Pharmaceutical (SZ300110, share price 3.9 yuan, market value 4.61 billion yuan) announced in July 2020 that it had decided to terminate the industrial hemp project due to changes in domestic and foreign economic situation and market environment. In May 2019, a wholly-owned subsidiary of Guizhou Bailing (SZ002424, share price 769 yuan, market value 10.85 billion yuan) signed the Strategic Cooperation Agreement on Industrial Hemp with Heilongjiang Hanrong Hemp Biotechnology Co., Ltd. According to the plan, the cultivation license and extraction and processing license of industrial hemp were obtained in Heilongjiang Province (Reporter's Note: At present, only Yunnan and Heilongjiang are allowed to cultivate industrial hemp). However, in response to questions from investors on March 21 this year, Guizhou Bailing said that the above project is only an intentional framework agreement and does not constitute substantive cooperation, and there is no progress at present. With stricter policies, listed companies can hardly dismount. The sharp drop in the enthusiasm of listed companies for industrial hemp is closely related to the introduction of relevant regulatory policies. On May 28, 2021, the National Medical Products Administration issued a notice on updating the list of prohibited raw materials for cosmetics (No.74 of 2021), and the list of prohibited raw materials such as hemp nut, hemp seed oil and hemp leaf extract was also included. The announcement points out that cosmetics registrants and filers are not allowed to produce cosmetics that use prohibited raw materials stipulated in the Catalogue of Prohibited Raw Materials for Cosmetics and the Catalogue of Prohibited Plant (Animal) Raw Materials for Cosmetics in the formulation of imported products. Talking about the impact of the "528 cosmetics ban" on the industry in 2021, Yu Hua, deputy secretary general of Yunnan Industrial Hemp Industry Association, told Daily Economic News that before the ban was introduced, cosmetics were the only open area for industrial hemp to use beneficial cannabinoids in China, so the ban had a great impact, even "subversive". As a result, some enterprises that have begun to grow industrial hemp and produce and process it have slowed down their progress, and some have suspended production directly. The aforementioned case of repurchase contract disputes between Shenzhen Datong and growers occurred after the announcement of the ban on adding CBD to cosmetics. Since 2021, Yunnan Hanmeng, a subsidiary of Chengzhi, has not planted industrial hemp any more, and its processing plant has not yet been delivered. In addition, the industrial hemp investment of some listed companies is stagnant. According to the annual report of Renhe Pharmaceutical (SZ000650, share price 6.12 yuan, market value 8.57 billion yuan) in 2021, the company's industrial hemp investment progress is only 8.94%. At the annual shareholders'meeting in 2021, Renhe Pharmaceutical Secretary Jiang Feng told Daily Economic News that the project has not been abandoned at present, but it still needs to wait and see. If the policy is tightened, it is not excluded to adjust or change the project. Cao yuangang, Secretary of Chengzhi Stock Company, also said in an interview with reporters that the national policy did have a real impact on the company, they had been doing cosmetics research and development before, and there were also some research and development products, as soon as the announcement of the National Medical Products Administration on the prohibition of industrial hemp in cosmetics came out, the company's research and development in this area stopped. Cao yuangang said that scientific reports on industrial hemp show that THC (tetrahydrocannabinol) in industrial hemp is partially toxic, and more than 200 other cannabinoids are harmless or even beneficial to the human body. What we are most concerned about now is the direction of policy to determine the direction of the company's development. Reporters learned that in addition to cosmetics, industrial hemp extraction can also be used in the field of medicine, consumption and so on. The application management of industrial hemp in China is becoming stricter, which has a great impact on the production and processing of industrial hemp. Regarding the current shutdown of listed companies investing in industrial hemp in Yunnan, Yu Hua said that from the perspective of the whole industrial hemp industry chain, enterprises need to constantly enhance their competitiveness and increase investment, but in this process, they must have the ability of self-hematopoiesis to support. At present, the biggest problem is that enterprises have not yet formed this self-hematopoietic capacity, leading to a dilemma. Looking ahead to the development prospects of industrial hemp, Yu Hua said: "The application scenarios of industrial hemp beneficial cannabinoids are very broad.". But the biggest obstacle now is that the basic research on the beneficial cannabinoids of industrial hemp is not comprehensive, in-depth and thorough enough. Yu Hua said that they hoped that the country would lead the basic research on the beneficial cannabinoids of industrial hemp. As long as the basic research can be thoroughly done and its pharmacology and toxicology can be understood, the market can be safely opened, and the potential huge market scale of industrial hemp can be released. For some enterprises that have just started to put their production and processing bases abroad, the impact is relatively small. Recently, some companies have announced the mass production of industrial hemp. On June 28, Rhine Biology (SZ002166, stock price 13.05 yuan, market value 7.38 billion yuan) announced that its construction project of industrial hemp extraction and application in the United States had passed the acceptance and audit of the Indiana government and third parties, and carried out large-scale production, formally entering the stage of mass production. It is reported that the total investment of the project is expected to reach about 80 million US dollars. Rhine Biology said that the formal mass production of the industrial hemp project is expected to play a positive role in improving the company's future business performance. Reporters noted that in recent years, overseas regulatory policies are moving in favor of the development of industrial hemp industry, but the specific policy landing time and cycle of industrial hemp extracts and other products used in food and other fields in various countries and regions are not clear. In addition, Yu Hua also said that before that, the industrial hemp in Yunnan was mainly exported raw material extracts overseas. With the expansion of overseas planting scale and the promotion of their high-content cannabinoid varieties, the raw materials exported from Yunnan have no price advantage in the international market. At the same time, affected by the epidemic and international political and economic fluctuations, the global import demand for beneficial cannabinoids in Yunnan has decreased, which is also one of the reasons for the reduction of industrial hemp cultivation. (Source of cover photo: taken by reporter Yu Yifeng) Daily Economic News Daily Economic News Return to Sohu to see more Responsible Editor: (function() { function getBrandHtml() { var brands = [],wiped film distillation, html = ''; for(var i = 0; i < brands.length; i++) { var brand = brands; if(brands.length i+1) { html+= ''''; } else { html+= '''、'; } } return html; }; if(document.getElementById('linkBtn')){ document.getElementById('linkBtn').onclick = function() { $('#brands').removeClass('brand');$ ( '# tipInfo').text ( 'Real name responded'); $ ('#linkBtn').remove();$ ('.real-response .content').css('line-height', '20px');$ ('.real-response .time').css('line-height', '20px'); }; document.getElementById('brands').innerHTML = getBrandHtml(); }; })();。