(Yicai Global) Jan. 20 -- A Hong Kong unit of Chinese packaging materials firm Shunho New Materials Technology will make inroads into industrial hemp business in North America after it secured a permit to plant the versatile crop on its home turf.
Lvxin Packaging Resources Holdings will establish an affiliate in the US with a registered capital of USD4 million, the Shanghai-based parent said in a statement yesterday. The rationale may be to sell the fruit of Shunho's unit Yunnan Luxin Biological Pharmaceutical which secured a related planting license in southwestern Yunnan province in mid-January.
The 2018 Farm Bill, that the US Congress passed last December, removed hemp that contains less than 0.3 percent of tetrahydrocannabinol from the Controlled Substances List, which has essentially made the less intoxicating variety of the plant legal. It may be used for dietary supplements, paper, cosmetics and cattle feed.
Shunho's stock price [SHE: 002565] rose by the daily limit of 10 percent today to CNY12.72 (USD1.90). Its equity has been aspirational since the planting permit came through.
The global industrial value of cannabidiol will reach USD5.7 billion this year and USD18.1 billion in 2021, according to US market research firm Brightfield Group's estimate. CBD is a cannabis-derived compound that can be extracted from hemp and used to medicate anxiety, pain, and movement disorders.
Editor: Emmi Laine