Mr. Tan Wei, the founder of HMI Group, is interviewed by the Chinese vape trend culture magazine Dr. V and published forward-looking opinions on the concept of industrial marijuana, and views on the present and future of the cannabis industry and the trend of the combination of vapes and marijuana.
“CBD is synonymous with health. The wave of global legalization of cannabis is due to the strong effects of cannabis on human health, especially for neurological diseases. Medical marijuana fully reflects people’s pursuit of physical health. This is something that no organization or government can block.”
Background: Selling recreation use cannabis to people in China is very likely to be sentenced to death
The following is the original interview:
Dr. V: “You have done a very large legal cannabis business in China. So what is the legalization of industrial marijuana?”
Tan Xin: “In traditional education, we began to hate drugs because of the opium war against the Chinese people. The attitude towards drugs is actually the same in the world. But everyone seems to have overlooked a problem, that is, the use and dosage, if properly controlled, many so-called poison ingredients can also become a good medicine.
For example, arsenic trioxide, also known as ‘arsenic’, has special effects in the treatment of certain leukemias. This shows that in a reasonable place, mineral poisoning can also be very good medicine.
The same is true for morphine, which is a form of opioid, but patients with advanced cancer use morphine to relieve pain. When morphine is used as a medicine, it gains world recognition. Morphine drugs are also known as opioids in the United States. In the recent ‘Fentanini Incident’, Trump has said that opioid products are poisoning Americans (such drugs are mostly produced in Chinese factories) because the drugs are addictive. But at the same time, the stock price of the companies involved in the production and sales of cannabisdiol (CBD) has risen sharply. This shows that in the future, cannabidiol will replace traditional morphine pain killer drugs.
The third example is Yunnan Baiyao, which is familiar to all of us. There is a Chinese medicine called Yunnan Uygur in the formula of Yunnan Baiyao. It is the ‘breaking grass’ mentioned in our martial arts novels and is toxic. Yunnan Baiyao was removed from Hong Kong in the past few years. Europeans and Americans have never agreed with this ingredient. However, the Chinese believe that the legal preparation process and legal use will bring benefits to the human body. Just like in ancient China, people have used poison to kill the poison.
We can say that marijuana is a useful ingredient as long as it is established as a starting point for the sake of health after talking about the above three cases. And it’s beneficial when using at a proper dose.”
Dr. V: What is your understanding of medical marijuana? What is the prospect of HMI in this regard?
Tan Xin: Pharmaceutical is the most healthy and ideal direction. Cannabis has more toxins than other plants. For example, poppies are difficult to make fast-consuming products and beverages, because a little use will immediately activate the human spirit, so it can only drugs can be used. Because of its complex composition, marijuana has more than one hundred ingredients that are not found in other plants. Many substances extracted from hemp is isolated from toxins can be used as food health products. Therefore, we cannot use the term “marijuana” to cover all the characteristics of marijuana.
Dr. V: What are the specific differences between recreational marijuana and industrialized marijuana? Does it mean that entertaining marijuana is cannabis that retains some toxins? Is medical marijuana that removes toxins and only retains health-care substances?
Tan Xin: It can’t be fully understood like this. Because the “toxin” component of cannabis, a “toxin” component, also has medicinal value, it is also a raw material for pharmaceuticals in biopharmaceuticals. However, if this ingredient is not used in medicine, it can become a major component of entertainment cannabis in the market.
CBD with Infinite Potential
Dr. V: As far as you know, what is the competitive advantage of the CBD in the legalization of cannabis worldwide?
Tan Xin: Cannabidiol is not legally available worldwide. Some countries are still relatively in the gray area. The latest news is that the regular session of the sixty-second session of the UN Commission on Narcotic Drugs will be held in Vienna from March 18 to 22, 2019. The cannabis industry is looking forward to the resolutions of the conference, as this meeting received and considered the following recommendations from WHO: Pure cannabinol (CBD) should not be included in the international drug control conventions, it is legal worldwide since this day. The application of CBD is quite extensive. I have seen reports that 7 out of 100 people in the United States will use related products, and the usage rate is very high, far exceeding THC. In the electronic cigarette industry, THC cigarettes have a market advantage in the early days of opening, but in reality, the potential of THC is limited. In the United States or Canada, people who smoke marijuana usually have a party, and some people may only smoke it one or two times in their lifetime. It is not a standing fast-consumer product. The CBD e-cigarette can be turned into a product that can be vaped at any time. It can relieve stress and so on, and it will be more competitive in the future.
Dr. V: How do you think about the legalization of CBD in China?
Tan Xin: There’s a future from the beginning. Everything has a breakthrough. Now that China has a breakthrough in “industrial use” of cannabis, we will develop it in a formal and state-prescribed form and gradually expand its influence. Whether through the way of atomization or eating, people should be able to enjoy the benefits of CBD.
Dr. V: We already know that many domestic enterprises have obtained industrial marijuana licenses. What do you think is the core of CBD in the future?
Tan Xin: I think these companies belong to those who see the potential of the future in the capital market, but can these new companies stick to it? First of all, we need to know what licenses are. Planting licenses are totally different from industrial hemp mosaic processing licenses. Planting licenses without subsequent extraction and processing capabilities are not of great value, so many planting enterprises must rely on extraction and separation enterprises to develop, and it is difficult for them to have core competitiveness in the industrial hemp industry.
Dr. V: As a listed company with permission to grow cannabis, what do you know about Shunhao Co., Ltd?
Tan Xin: Shunhao is one of the partners of Hanma Investment Group. The electronic cigarette company jointly owned by Shun Hao and Dongfeng is called Lvxin. A joint venture company was established with Hanma Group’s Hansu Biology, an extraction plant with the Industrial Hemp Mosaic Processing License, to explore the application of industrial hemp substrates in HNB vape products.
Dr. V: PAX, JUUL, PMI and other enterprises are involved in the CBD industry. What are your views on the global CBD industry future prospect?
Tan Xin: I don’t think the industry data of this industry is real enough. Every time an industry report comes out, it will be overturned by other industry reports in a month or two, and the number of reports is extremely large. I can not use a single data to summarize the future CBD market usage, but I can give an example of Hanma Group. We produce a drug for epilepsy, 300 mg per person per day, then 10,000 people will use one ton per year. In the future, if 5% of China’s 9 million epilepsy patients use our medicine, it will be 45 tons of CBD. China currently has 300 million smokers, so it would be a gigantic number for CBD usage.
CBD and Electronic Cigarette
Dr. V: At present, CBD has been integrated with electronic cigarette industry in North America, and electronic cigarette has become a derivative of cannabis. What do you think of this problem?
Tan Xin: If CBD is used in electronic cigarettes, it really changes the traditional entertainment scenario and use of electronic cigarettes. Therefore, making CBD electronic cigarettes needs later market education. In fact, electronic cigarette does not belong to cagarette in my opinion, but is an aerosol route of drug administration. We know that many asthmatic patients use aerosol route because of faster absorption. CBD electronic cigarettes are easy to understand if we change our concept into an atomized route of administration. But it can’t be the form of cigarette, which is also the idea I advocate with many electronic cigarette companies. Atomization platform is the concept of health, just like your magazine’s original intention is to focus on big health. In fact, the same thing can be said differently, and it will be more accurate for people. Therefore, the combination of electronic cigarette and marijuana cannot leave the word “health”, so that the application of industrial marijuana will have a stronger vitality.
Dr. V: Do you think that the combination of CBD and electronic cigarette equipment will become the best way of CBD intake and the industry trend?
Tan Xin: Some people have said that cannabis products will be the world’s largest consumer goods. In combination with marijuana, we can adjust the vapes to allow people to vape until there is a fantastic feeling. More marijuana consumers do not actually want to enjoy the overwhelming pleasure, just like many people drink but not to get drunk, they enjoy a slightly drunk feeling. Electronic cigarettes have the ability to make you little drunk, it can be controlled, so that the market space will be very large. From the perspective of investment of Altria and Anglo-American tobacco, the CBD industry is very promising.
Dr. V: How does a small electronic cigarette device realize the medical effect of CBD through atomization?
Tan Xin: If the electronic cigarette itself is added to the CBD, no matter what oil is used as the carrier, there is a problem of solubility, so it does not work well. Most electronic atomization device is also a conceptual product. For example, a 1-2 mg CBD does not have much impact on the human body. In the biopharmaceutical field, the CBD needs to achieve a certain amount of efficacy. The development of higher-end devices capable of heating pure CBD will have market space in the future. Our group is also doing this work, it will be more targeted at people with diseases that need treatment, not just a concept.
Dr. V: In the export of the vape industry, CBD has become one of the main raw materials of vape juice containing nicotine. Do you think China is likely to become an exporter of raw materials in the future?
Tan Xin: China’s not going to be the biggest exporter. Because with 40 years of development, China has no production advantage now. Our labor costs are very high. Countries like Vietnam and Myanmar have greater advantages. We need to make our own market now.
HMI, Present and Future of Industrial Cannabis in China
Dr. V: What are the main businesses of Hanma Investment Group at present?
Tan Xin: Hanma Group is the only enterprise with the whole cannabis industrial chain in China. From seed planting, extraction, processing, R&D, intellectual property rights, to products and markets, we have formed an industrial closed-loop. Hanma Group has done so many things from beginning to end, which is not my wish, because China’s law is not sound at the beginning, no company can cooperate with us, to make the industrial chain is also a special case of the times. From the first day of participating in the industry of cannabis, we have positioned the investment group in the direction of biopharmaceuticals, and its strategic direction is very clear.
For some non-pharmaceutical patents and research results, we will also slowly release to integrate with the fast-food industry. At present, ALD, who has worked as our partner, has the main direction of marijuana oil vape product. Some large domestic electronic cigarette companies are also buying products from us to do research. A listed company providing flavor for China tobacco is also developing and heat not burn cigarettes with our raw materials.
In addition to the tobacco fast consumer industry, we have also made some cooperation with some food brands to make cannabis food, of course, in accordance with Chinese law. We have plans to do research and development with some big cosmetics companies. Cannabis catechol is the raw material of some skin care products in Europe and America. It has good effects on anti-aging, whitening, acne removal and cell regeneration.
Hanma Investment Group concentrates on one thing. We are more focused on the research and development of upstream, midstream and application technology of industrial hemp. It is not the advantage of Hanma Group to push a variety of fast consumables to the terminal retail market. We will find some companies that are able to and willing to differentiate and upgrade, and use the channel advantages of their traditional industries to develop together.
In China, marijuana in the form of entertainment is problematic and prohibited. As a Chinese enterprise, Hanma Group opposes the legalization of all forms of entertainment marijuana. We only pursue its industrial and medicinal uses. We will also widely promote the use of fast-consuming products. We will never touch entertainment marijuana.
Dr. V: What is the global industrial prospect of Hanma Investment Group now? What kind of plan will HMI carry out in the future?
Tan Xin: We don’t invest in recreational marijuana. There’s no capital market for recreational marijuana. It belongs to some special countries and regions, and industrial marijuana belongs to the whole world. We have set up a factory in Nevada and obtained a full license for industrial marijuana. We plan to start production in the second half of this year. Hanma Group will also get a license in Canada this year to improve the development in North America. Relying on Canadian federal cannabis law, American federal industrial cannabis law, and Chinese industrial cannabis law, Hanma Group accounts for almost one-third of the world’s most cannabis consumable market, with a population of about 17.8 billion, which is our first step in the plan.
The second step is in Europe. For example, in Germany and Britain, the grow of vapes is also very fast, so our strategic direction will be developing there and promote products.
Dr. V: We noticed that you also used iQOS’s heat not burn product. Do you have any feelings or suggestions about this product after using it?
Tan Xin: I’m also designing a product that specializes in hemp heat not burn. Heating cannabis without burning is also the preferred direction of tobacco giants in the world. Now we can see how much tar is on the packages of cigarettes. Our products are made from cannabis leaves. It can also clearly indicate the content of CBD and THC, or only contain CBD. This requires classification and superb technology. Industrializing agricultural products like marijuana can complete what I said. Firstly, all the ingredients of hemp should be separated and then reassembled to make this kind of tobacco. This is much more complicated than the ordinary vapes, but the experience will be more than the ordinary vapes. Large international tobacco companies have visited our factories and are hopeful to cooperate with Hanma Investment Group, because only we have the technology and ability to separate and restructure agricultural products. This product will be more competitive in the future market.
At the end of the interview, Tan Xin told Dr. V’s readers: “I hope the development of the cannabis industry, the application of cannabis bisphenol, in the field of electronic cigarettes, is not only a process for us to enjoy entertainment, but also to enjoy health.” This is the hope for every vapor, and also a good vision for the combination of vapes with the CBD industry.