This year has been one of exceptional growth for Chinese cannabis production. But as interest in the fast-growing market surges, government authorities are clamping down on its production.

Companies like Shanghai Shunho New Materials Technology Co and Zhejiang-based Conba Group have been moving into the space since the beginning of the year. And just this month, Huaren Pharmaceutical in Qingdao announced its collaboration with a biotechnology company in Yunnan Province to cultivate cannabis production in greenhouses — the joint venture (heh heh) could be the first of its kind.

According to Huaren Pharmaceutical (via Yicai) and others, stock market value jumped dramatically after the news came out. It’s not as scandalous as it sounds, though — the plant’s production is to be used solely in hemp-based fabrics and as seeds, and it’s still far from receiving approval for medical, food, or recreational use. Indeed, China has a strict zero tolerance policy on the latter.

Perhaps as a result of this, regulation surrounding the plant’s cultivation is strict and highly-monitored; only Yunnan and Heilongjiang provinces have the green light to produce it. Liu Yuejin, Deputy Director of the National Narcotics Control Commission, spoke at a press conference in March, assuring the concerned masses that industrial cannabis production was being tightly managed, and that planting, storage, and transportation of the plant was being conducted under the strict supervision of relevant government departments.

He went on to note that, in the face of widespread legalization in other countries, China will require anti-drug authorities to tighten their approval of permits for the cultivation of industrial cannabis crops.

China is still far, far away from legalizing consumer-level production or consumption of the plant. But — speaking to the government’s economic sensibilities — a fast-growing international market interest in it could be the most convincing argument yet.

Cover image: © Ryland Zweifel | Dreamstime.com