Wednesday, October 27, 2021

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This Indian brand is bringing the goodness of Hemp & Cannabis to people, legally.

BOHECO (Bombay Hemp Company), an agro-based enterprise is imagining the future of Indian agriculture and sustainable living with hemp as a lens. Their mojo is to take this nine-thousand-year-old ‘wonder crop’ from Himalayas – Cannabis, and transform it into a channel that powers the future.

Hemp’s uses are multi-fold – this one plant has the ability to provide us with all the basic necessities required by humans, food, clothing, shelter, and medicine! Hemp seeds when harvested can transform into all the health and nutrition a human body need. The design of BOHECO fuses the very potential with the existing industries of agriculture, technology, health and nutrition, to bring together community, impact and value.

Unkrate’s Suman Prasad in an exclusive interview with Yash Kotak , Co-founder & Director, BOHECO digs deep into the different facets of the brand, role of farmers in the value chain, legalities in the country for hemps and cannabis, breaking the misconceptions, wellness related to this multidimensional plant and many other things.

Excerpts from the interview.

Making agriculture sexy – Conception of BOHECO

The idea behind BOHECO was born during the collegiate days of co-founders, when they used to be a part of a larger team working on social enterprise projects across India. During their expeditions to the rural countryside during some of their projects, they happened to notice the growth & utility of cannabis were ubiquitous regardless of the geographical location. In the same time frame, one of the co-founders happened to be in West Australia visiting family when he got exposed to the rapid rise of Hemp as a base commodity all over the country.

During college, they also realized that most people from this generation were focusing on the technology sector. “We were struck with the thought that agriculture is the backbone of the Indian economy, where it then employed 55% of India’s workforce but contributed only 14% to the country’s GDP, and it made no sense. Through our college expedition, we became aware of the myriad problems within the agriculture sector. We realized that there’s a lot of opportunity for radical change in the industry and the need for a new tool for development became more prevalent,” says Kotak.

“We identified that the reason for most of our peers not getting into agriculture was that it wasn’t sexy! What better crop to establish that than Cannabis,” he added.

The above reasons came together to create a eureka moment for the team.

Challenges to make hemp and cannabis mainstream

Lack of education to the standardization of Hemp production. Scalability and the lack of alternatives (such as hemp replacing plastic) is the biggest challenge. There is a wide space that has not been explored with Hemp due to the lack of funds for research and development. This often places the price of hemp a notch higher than other alternative sources. “Notwithstanding these setbacks, we strive to keep our prices affordable,” says Kotak.  

Legalities of hemp and cannabis in India

From a cultivation POV, cannabis falls in the concurrent list which means the basic guidelines are set by the central government but every state has their own powers to draft the rules & regulations. As per the NDPS Act, 1985 the fibre, seeds and leaves when not accompanied by the flowering tops are exempted and can be used for industrial, medical and/or horticultural purposes. 

From a product POV, each industry has their own policy. For example, hemp is not recognized as a food source as yet by FSSAI thereby making it tough for it to be utilized as food but it is recognized as a medicine under AYUSH so many end uses can be explored keeping the AYUSH rules in mind. 

For the market and industry to grow, a robust policy by a state contextualized to the Indian landscape is essential if we were to have the same quality of outcome that some dominant global Cannabis players have.

Breaking misconceptions around the wonder plant and building a brand around it

A plant like cannabis comes with a set of preconceived notions and instead of learning about something new, one must unlearn and relearn about the many facets of cannabis. Hence, education becomes an important objective for the organization. “We need to constantly strive to make people aware about cannabis and its uses and this includes the entire ecosystem from farmers to regulators to scientists to industry partners and the end consumer,” says Kotak.

The brand conducts their own research due to the dearth of scientific literature on the subject. They have been mindful of the fact that R&D on this plant in India is extremely essential and since it was the need of the hour combined with the fact that with a strong research-backed approach would always help them stay ahead of the curve.

Despite having all the possible licenses and reassuring the prospective retail partners of the credibility of cannabis-based products, there are various channel partners that have a conservative view to stock hemp products because they have a reserved understanding on the subject. It’s understandable that they might not want to jeopardize their existing operations but it’s usually not an informed decision.

Thereby, this becomes more so of a bigger responsibility of any organization working with hemp and cannabis products that they uphold the sanctity of working with this plant by selling licensed products that are labelled correctly, etc. “With the right kind of efficacious products, scientific evidence and working with credible individuals such as doctors, nutritionists, plant breeders, etc. helps us achieve the goal of repositioning cannabis in people’s mind. Once people subscribe to our products, our products do the talking and that itself acts as a base for an educated conversation around the crop in a household,” adds Kotak.

BOHECO’s products and demand among consumers      

BOHECO’s product offerings are categorized under three buckets: BOHECO Life offers cannabis ayurvedic health and wellness products; B Label offers sustainable hemp and clothing accessories and Hemp Fabric Lab offers hemp and sustainable fabrics.

BOHECO successfully became one of the first licensed companies to legally sell & distribute hemp hearts, hemp seed oil and hemp proteins within the Indian marketplace. At the end of 2019, BOHECO also became one of the first companies in India to be licensed by the Ministry of AYUSH to manufacture and commercially distribute Ayurvedic products with multi-spectrum Cannabinoids sourced from the Cannabis leaves, for varying indication areas, such as Pain management, mental Health, skin inflammatory disorders, to name a few.

However, BOHECO’s first commercialization endeavours were related to entering into the space of sustainable fashion & apparel from Hemp, along with Hemp based fabrics and textiles. This was done while simultaneous efforts were made to create greater awareness amongst regulators and technocrats regarding the commercial potential of other industry categories such as Foods, Pharmaceuticals and ayurvedic products.

Talking about the demand, Kotak says that it has been overwhelming. “While consumers have an initial apprehension for our health & wellness products owing to the stigma attached, but after the un-learning process, the journey becomes a lot smoother. We have seen our repeat purchase rates scale though the roof with an annual average of 42% which just goes to show that once people get their hands on our products, most come back looking for more, adds Kotak.

On the other hand, while pandemic slowed the textile-based brands, they saw a surge in the offtake of their products once consumption resumed. “Given that awareness for this plant is low, has led to reduced demand initially and once awareness will increase, so will the demand which will make this category thrive, says Kotak.

Role of farmers in the operation

BOHECO is a vertically integrated company with a direct role to play in the entire value chain – Lab, Farm, Factory and Market. Their aim is to create a robust ecosystem to make cannabis a gold standard for health & wellness and textiles in the country. “Farmers by far are the most important stakeholders in our value chain and also the prime reason why we established the brand. We want to empower the many small and marginal farmers in the country where we aim to provide the approved varieties for them to cultivate with a 100% buyback model,” Kotak.

He further adds, we engage with farmers for a range activities, from assisting in collecting the right seeds for cultivation to eventually cultivating the plant and deploy the right kind of post harvesting techniques for a standardized outcome. We work with 2 primary framer groups which house over 500 Himalayan farmers in the state of Uttarakhand primarily from areas such as Almora, Bageshwar, Chamoli and Pithoragrah.”

Cannabis related wellness and why people should care about this

If there’s one thing that the pandemic has taught us, is to not take our and our loved ones’ personal health for granted. It has also given way to new lifestyle conditions such as social anxiety, change in sleep patterns, etc., long term effects of which are yet to be seen. Additionally, there are multiple other chronic ailments such as arthritis and psoriasis that have no known cure or have limited options for treatment. India is also the pain capital of the world with majority of the solutions available largely cause dependence. This is where Cannabis can plug itself in.

The cannabis leaves and the flower contain a full spectrum of cannabinoids such as CBD, THC, CBG, CBN, to name a few among at least 113 other cannabinoids. These plant compounds aid with a variety of ailments including but not limited to pain, stress, anxiety, loss of appetite, loss of sleep, etc. Every mammal has a system in their body called the Endocannabinoid system (ECS) which mainly consists of 2 receptors – CB1 and CB2 receptors. The ECS plays an important role in multiple aspects of neural functions, including the control of movement and motor coordination, learning and memory, emotion and motivation, addictive-like behaviour and pain modulation, among others.

When the cannabinoids bind with the ECS, that’s when the health benefits of cannabis are derived. Cannabis based medication for oral consumption needs to be taken under medical supervision and access to the oral consumption-based Cannabis medicines can only be availed through a valid prescription. On the other hand, the hemp seed range is a superfood range where the hemp seed is power packed with plethora of nutrients such as protein, omegas, vitamins, calcium, magnesium and dietary fibre thereby making its nutritional profile unparalleled versus most alternatives, the by-products of the hemp seeds can be used for a range of daily dietary needs.

Growth of BOHECO

BOHECO was self-funded by promoters and bootstrapped its way through the first 3 years of existence. Given a certain proof of concept acceptance in market, it raised its first round of external funding issued in November 2015. This round of financing was led by marquee investors and captains of industry such as Ratan Tata, Rajan Anandan, to name a few coupled with family offices. It carried on issuing CCDs across various series at different terms through 2017-18 (bridge round) as well as a Pre-Series A round of financing undertaken 2020-21.

Over the course, many angel investors, entrepreneurs, venture capitalists, as well as equity hedge funds have participated in the form of committing investments to the company. Cumulatively, BOHECO has raised approximately USD 2.33 million so far, to deploy across revenue generating activities, paving a regulatory pathway, in seed/genetic development programs amongst other research projects. Our revenue as on last FY has been 4.5 crore with a 3Y CAGR of 93%.

Health & Wellness category leads the annual revenue with 70% contribution, followed by 30% from textile business.

Future plans

Talking about future plans, Kotak puts out four goals across lab, farm, factory and market that the team is aiming to achieve in their value chain. As part of the lab, their aim is to develop a state-of-the-art research infrastructure to continue to study and develop Indian genetics, and develop highly efficacious clinically validated products.

With regards to farm, the brand aims to work with the small and marginal farmer groups in India to organize the cultivation of industrial hemp and also to deploy a best in class cultivation framework for medical cannabis varieties for a standardized output.

As part of the factory goal, the brand aims to establish a GMP grade facility that can make products to match the global standards, whereas under market, BOHECO aims to setup a completely integrated D2C platform that can make available great quality products that are recommended by highly qualified health professionals

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