Cartridges of cannabidiol (CBD)-rich hemp oil for medical use are displayed during the International Cannabis Association Convention in New York, October 12, 2014. Photo: VCG

The first batch of Chinese companies to legally develop industrial hemp for consumer goods are developing in cosmetics, as China has not yet approved industrial hemp for medical and food usage.

"We began to supply cannabidiol (CBD) as a raw material to the beauty industry and research institutions in 2015," Pan Zongbing, general manager of Hankang (Yunnan) Biotechnology Corp, told the Global Times on Thursday.

CBD, an extract of marijuana purified from hemp leaves, has been used in cosmetics products in the US and Europe, including face masks, lotions, essences and face creams.

Hankang Biotechnology was the first company to obtain an industrial hemp processing license in Southwest China's Yunnan Province, which is one of the two provinces in China that are allowed to grow industrial hemp. The other is Northeast China's Heilongjiang Province.

"Yunnan Province grows 150,000 mu (10,000 hectares) of marijuana," said Pan.

At present, the company can produce 350 kilograms of CBD monthly, with more than 99 percent purity.

"Skin-care products that contain CBD are gradually entering the market," Pan added.

Lacking psychoactive-activity characteristics, CBD is not included on the Chinese list of narcotic drugs, according to the Ministry of Public Security. 

The tetrahydrocannabinol (THC) extracted from marijuana is the addictive ingredient. Its content in industrial hemp should be less than 0.3 percent, and its upstream cultivation and extraction are highly controlled in China, according to the ministry.

INBRIZ CBD, a Shenzhen-based company, is an example of a recent investor. It recently completed a round of financing, raising 10 million yuan ($1.42 million) for channel-construction and brand-building, 36kr.com reported on Wednesday.

INBRIZ CBD's brand focuses on daily cosmetics and skin-care products with CBD.  

As a country with strict laws and regulations for hemp cultivation, processing and usage, China is expanding its cultivation area. Heilongjiang Province was allowed to grow marijuana in 2017, together with Yunnan.

China has the largest area of industrial hemp cultivation in the world, accounting for nearly half of the world's total, and its production accounts for 25 percent globally, according to a white paper on the industrial hemp industry in 2019.

The industrial cannabis global market will hit $5.7 billion in 2019 and $22 billion in 2022, with a compound annual average growth rate of 56.8 percent, per Brightfield Group, a market predictive analytics agency. 

China's market size is expected to reach 760 million yuan by 2020, up from 570 million yuan in 2019.