Activists gather to support the legalization of marijuana on December 10, 2013, outside the Congress building in Montevideo, Uruguay. Photo: IC

On January 1, 2014, hundreds of people in the state of Colorado, US, queued up in the cold to buy marijuana from the first batch of stores legally allowed to sell it for recreational use, Reuters reported on the same day.

Washington State also plans to legalize marijuana later this year, British newspaper The Independent reported on January 5.

In addition to the two states in the US, Uruguay is also set to legalize the growing, processing and use of marijuana, the BBC reported on December 11, 2013.

From April 2014, Uruguayans above the age of 18 will be allowed to buy up to 40 grams of cannabis per month.

The increasing legalization of marijuana has been seen as a potential bonanza for China, which has more than half of the world's patents relating to the drug. Some believe the country could become dominant in the marijuana trade, The Independent reported.

China's leading position

Chinese companies have 309 out of the 606 patents filed around the world that relate to cannabis, partly because traditional Chinese medicine has used cannabis for thousands of years, The Independent reported.

China has strict controls for the cannabis industry, and the kind that is permitted is industrial hemp, which contains low amounts of THC, a psychoactive compound, Wang Jian, an analyst at industry research website askci.com, told the Global Times on Thursday.

Unlike the marijuana that is used as a drug, which usually has 5 percent to 15 percent levels of THC, industrial hemp has less than 0.3 percent THC, according to the website of Yunnan Industrial Hemp Inc (Yunnan Hemp).

Nonetheless, the controls in place for industrial hemp are strict, and the planting as well as processing of industrial hemp must be permitted and supervised by local drug control authorities, a staff member surnamed Zhong from the marketing department of Yunnan Hemp told the Global Times on January 8.

China has a leading position in the industrial hemp market, Wang said, noting that the country produced 50,000 tons of cannabis sativa seeds in 2012, which accounted for 37.94 percent of global production.

In recent years, the sales revenue of Chinese companies in the cannabis industry has been about six or seven times the value of their fixed assets, he said, noting that the industry enjoys a high return on investment.

There are more than 40 kinds of registered industrial hemps in the world, and Yunnan Hemp develops four of them, including Yunnan hemp No.1, which is China's first and most widely planted industrial hemp, according to the company's website.

Multiple uses

Industrial hemp can be widely used in the textile and food industries, as well as for medicine, and in China, 80 percent of industrial hemp is utilized by the textile sector, Wang said.

In the first 11 months of 2013, China exported 591 tons of hemp yarn worth $11.9 million, a 145.2 percent year-on-year increase, according to Wang.

It also exported 840,000 meters of woven hemp fabrics worth $5.16 million.

The yarn and woven fabrics were mainly sold to East and Southeast Asian countries. Meanwhile, China also exported a small amount of raw hemp to South Korea and Japan for scientific research purposes, he said.

Currently, there are no statistics for hemp food or medicine exports, Wang said.

In addition to fabric, Yunnan Hemp also produces a series of foods with cannabis sativa seeds, including cooking oil and protein powder, said Zhong, noting that the protein contained in the seeds can promote digestion and improve the immune system.

According to China's State Intellectual Property Office, there are 16 patents in the country for manufacturing edible cannabis sativa seed protein, and Yunnan Hemp has nine of them.

Marijuana hemp, also called medicinal hemp, can be used to produce anesthesia and analgesic drugs for serious diseases such as cancer, Zhong Hongyue, a health sector expert at consultancy Frost & Sullivan, told the Global Times on Fridauy.

There are also strict controls on production of drugs containing medicinal hemp, Zhong noted.

Uncertain future

Nearly 147 million people, or about 2.5 percent of the global population, use cannabis, The Independent reported, citing data from the World Health Organization.

By 2018, the US will have a legal cannabis trade worth $10 billion, according to the report.

The legalization of marijuana will encourage the public to accept hemp-based products, leading to a better future for Chinese hemp exports, Wang said.

However, the legalization in Uruguay and the US is for marijuana hemp, and is aimed partly at tackling drug cartels and reducing overall drug consumption, but most patents owned by Chinese companies are for industrial hemp's use in textiles, medicine and food, he said.

This means the positive influence for China may be limited.

Also, the market for products manufactured with industrial hemp is still in its early stages, Wang noted.

For example, food products containing cannabis sativa seeds are mainly bought in Southwest China's Yunnan Province and South China's Guangxi Zhuang Autonomous Region because the two regions have the tradition of consuming such goods, and they are also the main areas for production of marijuana, according to Wang.

It will be difficult to promote such foods in other areas of China, partly due to people's negative impression of cannabis as a drug, he said.

Meanwhile, Zhong from Yunnan Hemp said the company sells products to the US, Canada, Europe and Australia, but has not received much positive market feedback in recent years, because of the sluggish world economy and the growing strength of the yuan against other currencies.