Market Information

Hemp is one of the oldest useful plants in the world and was already used in many ways hundreds of years ago. The hemp plant and its various components contain diverse groups of active ingredients, of which the cannabinoids are the most prominent. Within the cannabinoids, a distinction is made between approximately 80 different ingredients. The two best known of these cannabinoids are cannabidiol (CBD) and tetrahydrocannabinol (THC).

The hemp plant

Hemp is the German name for the Latin word Cannabis. Cannabis and hemp accordingly mean the same thing and in the botanical context refer accordingly to the hemp plant and its components. The hemp plant is versatile and can be used, for example, for the extraction of oils or for the production of textiles, cosmetics, food, consumables as well as alternative raw materials.

Hemp plants, whose scientific name is Cannabis ruderalis, Cannabis sativa or Cannabis indica depending on their parentage, come from the hemp family, also called Cannabaceae. Hemp plants are annuals, flower only once, and are dioecious. Accordingly, both male and female hemp plants exist. For research purposes, the female hemp plants are in the foreground in science, with cannabinoids such as cannabidiol (CBD), cannabigerol (CBG), cannabinol (CBN) and tetrahydrocannabinol (THC) currently being analyzed in particular.

Hemp leaves
Hemp leaves can be infused pure or mixed with other herbs as tea. The leaves of the hemp plant can also be used to flavor other foods. Hemp leaves are also used as a tobacco substitute geanuso as for the extraction of cannabinoids, which are then incorporated in isolated form, for example, in cosmetic formulations.
Hemp flowers
The hemp plant and its ingredients are said to have various positive properties. In addition to cannabinoids, the individual plant components contain other active ingredients such as terpenes, vitamins, proteins and minerals. This is also true for the hemp flowers. These are female, unfertilized inflorescences and can be used in many ways. The hemp flowers are the component of the hemp plant with the highest concentration of active ingredients. Due to this property, hemp flowers are increasingly used in pharmacy, e.g. as a raw material for extracts or as a ready-to-use preparation. Furthermore, hemp flowers are also used for recreational consumption. Also in the food sector hemp flowers have been used for a long time as tea or for the addition of flavors.
Hemp fibers
Hemp fibers have good tensile strength and durability and are therefore well suited for use in ropes and textiles, so they have been used in shipping for centuries. A particularly important component is the so-called bast fiber, which is located in the stalks between the wood and the bark. Monoecious hemp varieties are usually preferred for hemp fiber production, as these plants all undergo the same ripening process and can therefore be harvested at the same time. Hemp fibers are also used in other areas, whether in paper production, packaging, consumables or as a substitute for plastics such as plastic.
Hemp seed
The seeds of the hemp plant also represent an important raw material that has already been used for a long time. In addition to the hemp seeds themselves, the hemp seed oil, which is usually obtained by cold pressing, also serves as the basis for many foods. Hemp seeds have a versatile, valuable and extensive nutritional profile and are therefore becoming increasingly popular in the food industry for humans and animals, for example as a substitute for overbred grains such as wheat or soy or as an alternative to meat. Hemp seeds are also used as a raw material for various technical products, e.g. in the field of alternative fuels. For seed production, diözische hemp varieties are usually used, because they naturally produce more seeds than monözische genetics.
Hemp roots
The roots of the hemp plant have been used as a traditional medicine in various cultures for several thousand years. For example, it is known today that the hemp root was dried and ground to form the basis of a pain-reducing ointment. Today, hemp roots are still used in naturopathic medicine. Thus, the roots are still crushed in some cultures today to extract fresh juice or to make a decoction.
Hemp history

Hemp is considered the oldest useful plant in the world, has been used in a variety of ways for thousands of years and has been proven to have various positive properties, both in medical as well as in recreational and industrial areas. Despite these aspects and the thus constantly growing demand, there is still a lack of education and trust across all dialogue groups due to the last century, in which hemp was prejudged as an illegal narcotic. Accordingly, there are still many prejudices and uncertainties around the handling of the hemp plant and its ingredients, which are often based on a lack of or incorrect knowledge. For these reasons, it is important to show the extensive cultural-historical use of the hemp plant.

Diverse cultural and historical use
Social environment
Prohibition background
For a long time, the hemp plant and its components represented the most widely and diversely used raw material. But the age of industrialization changed everything. It allowed the textile industry to produce alternatives to hemp, such as cotton and synthetic fibers, faster and cheaper. In the paper industry, hemp began to be replaced by pulp made from wood, as trees and forests were available in greater masses than hemp in nature. Therefore, after the end of alcohol prohibition in the early 1930s, the American William Randolph Hearst, newspaper publisher, media mogul and investor in the nylon industry, decided to launch a public media campaign to negatively influence and weaken the reputation of hemp as a raw material, which was in competition with most of Hearst's business activities.
The media campaign, financed by William Randolph Hearst, was directed by Harry Anslinger. Anslinger was a U.S. diplomat with Swiss-German roots who had taken over as head of the Department of Prohibition in Washington, DC in 1929. He was a clear opponent of psychoactive substances and publicly declared that especially members of minorities would become aggressive and insane through the consumption of substances like hemp and would commit more crimes in this state. By doing so, he spread a sense of fear and insecurity among the population through the media, which belonged to Hearst's empire. He even went so far as to use a movie called "Reefer Madness" to reinforce his message, namely that the consumption of hemp leads to violent crime and social ruin. The campaign eventually had its effect and hemp would be banned in the U.S. in 1937 by the Marijuana Tax Act, authored by Harry Anslinger. However, the reputation of hemp had already been negatively affected globally to such an extent that consequences also followed at the international level, so that in 1961, as a consequence, the UN Single Convention on Narcotic Drugs, again co-drafted by Harry Anslinger, was signed by the UN member states. This treaty explicitly allows the import and trade of hemp only for medical or scientific purposes and is still in effect today. Despite the ban by the Unity Convention, since the early 1990s more and more countries have started to allow hemp for cultivation again for economic reasons. Since the beginning of the 2010s, a wave of liberalization has been taking place, starting in North America and Europe, which has led to legal hemp products being allowed to be sold in many countries for some years now, with the cannabinoid cannabidiol (CBD) in particular being the main focus to date.
Global liberalization trends
According to the World Health Organization WHO, the active ingredient cannabidiol CBD is not addictive and does not cause dependence when consumed, which means there is no potential for abuse. As long as the tetrahydrocannabinol (THC) content of a product with hemp plant ingredients is below one percent, this product does not fall under the Narcotics Act, as no psychoactive effect can occur at this level. In Switzerland, therefore, such products have been allowed to be sold since 2016, provided they comply with the further legislation relevant to the respective product category. In the meantime, voices from all political camps are increasing in various regions of the world calling for liberalization in the handling of the hemp plant and its ingredients, which is also reflected in the many countries that are currently considering a revision of their laws. Topics that are being discussed at the political level in this context include health promotion, youth protection, addiction prevention, education, or technical aspects such as the regulatory differentiation between medicinal and recreational products.
Environment analysis

The legal market for products with hemp plant ingredients is a very young and dynamic market. Therefore, SWISS Gate AG continuously analyzes its environment, records its observation in a PESTEL analysis and adapts its entrepreneurial thinking and actions to the changing market circumstances with foresight.

Each individual environmental sphere must be analyzed in detail and continuously monitored. In today’s rapidly changing society, which is characterized by regulations, individual needs, and constantly changing requirements, it is important to always be up to date with the latest developments and to see sustainability as an integrated part of one’s own business in order to be successful in the long term.

Political environment

Complex construct

The market for the production and distribution of products containing hemp-derived ingredients is in a highly complex political environment, both on a national and international level. Due to its decades-long past as a prohibited narcotic, cannabis is still stigmatized in many ways.

Opinions on the subject of hemp range in the political camps from proponents to neutral attitudes to opponents of liberalization. Accordingly, there are many different interests and backgrounds to consider.

In addition, aspects such as international agreements and economic relations between countries play a major role, which must always be kept in mind.

Stigma towards hemp

Due to its decades-long past as a prohibited narcotic, hemp is still often stigmatized. A lot of education and consultation is still needed to bring the level of knowledge on the different political levels on a consistent basis.

Many of the stigmas towards hemp are based on prejudices and uncertainties due to a lack of knowledge.

Relevant topics

In the meantime, more and more voices can be heard from various political camps calling for a liberalization in the handling of hemp plant ingredients.

Topics that are often discussed politically in this context are, for example, the protection of minors, the prevention of addiction, education, or licensing aspects such as the distinction between medical products and stimulants.

Economic environment

Growth & increasing demand

From an economic perspective, the hemp market offers enormous growth potential and has demonstrably grown strongly in recent years. Internationally, the market is still very young and Switzerland has been able to position itself as an attractive location partner in recent years.

Products of Swiss origin enjoy great demand and acceptance on the international market. In general, the demand for products with hemp-based ingredients is increasing across all stakeholder groups, in the medical as well as in the recreational and industrial sectors.

The growth of various stimulant markets such as cosmetics, nutrition as well as dietary supplements has continued for several years. Due to the Corona crisis, the global e-commerce business has experienced great growth, which now seems to be slowing down again. At the same time, innovative pop-up concepts are gaining ground.

Multiple applications & advantages

The hemp plant and its ingredients can be used in many ways and are used in many different areas today.

Components of the hemp plant are now used for consumer goods such as cosmetics and food or as medicines, but also for other areas such as plastic and paper substitutes, alternative fuels, CO2 reduction, construction and automotive industries.

As a result, the economic benefits of the hemp plant are constantly expanding. Therefore, hemp has the potential to become one of the most important resources for the next decades.

Supporting trends

Economic issues such as regionality, traceability, transparency and sustainability have gained enormous importance.

In addition, awareness of health promotion & prevention is also increasing in economic terms, since in the long term the available resources of social and economic structures can be used more efficiently through the conscious use of natural resources.

Consumers are increasingly paying attention to the promotion of their own well-being again and are turning more and more to natural ingredients and products for this purpose. E-commerce will remain one of the most important sales channels in the long term, even if stationary retail is now gaining in importance again.

As early as the 5th century BC, Buddhist monks used hemp plants for various rituals. Cannabis has also been used for centuries in other religions, such as the Rastafarian religion, for example to communicate with divine powers. In Germanic cultures, hemp was considered a symbol of fertility. Christopher Columbus reached America in 1492 with sails made of hemp fiber and a cargo hold full of hemp seeds for food and sowing. Centuries later, future U.S. President Benjamin Franklin opened one of North America's first hemp paper mills. Henry Ford built the so-called hemp car in 1941, which consisted of a mixture of hemp and soy fibers mixed with resin. Until the 20th century, about 80% of all textiles were also made from hemp. It was not until the advent of cheaper cotton production that hemp became less and less important for the textile industry.

Prejudices & Insecurities

Die Hanfpflanze und ihre Inhaltsstoffe sind im gesellschaftlichen Kontext mit verschiedenen Vorurteilen und Unsicherheiten behaftet, was auf mangelnde Aufklärung und fehlendes Wissen bei den verschiedenen beteiligten Dialoggruppen zurückzuführen ist.

Das jahrzehntelange Verbot von Hanf in verschiedenen Bereichen hat zu Stigmata gegenüber der Hanfpflanze geführt, die heute eine Vielzahl von Aufklärungs- und Beratungsmaßnahmen erforderlich machen, um die mentalen gesellschaftlichen Barrieren abzubauen und die positiven Vorteile von Hanf in den Vordergrund zu rücken.

Nichtsdestotrotz trifft Hanf auf eine grosse Awareness in der Öffentlichkeit, welche zusätzlich dadurch gefördert wird, dass Naturprodukte allgemein eine grosse Nachfrage erleben. Weiter gesellschaftlichen Trends wie faktenbasiertes Wissen, Nachhaltigkeit, Individualisierung und Rückverfolgbarkeit haben zudem einen grossen Einfluss auf die erfolgreiche Positionierung von Produkten mit hanfpflanzlichen Inhaltsstoffen.

Greater awareness of health

Due to the COVID-19 pandemic, the issues surrounding the protection and promotion of personal health have gained tremendous attention worldwide. The need for natural, sustainable alternatives in various fields has also increased.

These aspects promote public awareness of hemp and its ingredients, as a variety of positive influences of hemp on our health and the environment are now known and are being further scientifically researched, while social issues related to topics such as equality are increasingly being noticed and discussed by the public.

Sustainable thinking & acting

Other social trends such as fact-based knowledge, sustainability, individualization, regionality and traceability also have a major impact on social behavior.

In addition, the convenience needs of the various stakeholder groups continue to increase, whereby it is important for them that the information relevant to them can be accessed at any time and anywhere, whereby personal and corporate as well as governmental thinking and action will increasingly be oriented to the principle of sustainability.

Due to the current political as well as economic situation, the topic of social security has once again moved more into the focus of society.

Technological environment

Hohe Erwartungen & Anforderungen

Technological aspects play a key role along the entire value chain in the cannabis market.

From the cultivation of raw materials to the targeted extraction of individual ingredients and distribution via various channels - all process steps require a functioning technical infrastructure for quality assurance and compliance reasons, which allows products to be manufactured to the highest quality standards and made available to people safely and easily.

Data Protection & Cybersecurity

There has been an enormous increase in the area of virtual crime.

For this reason, the requirements for protecting data and systems are becoming increasingly stringent and extensive, both in the social and corporate context as well as in the economic and governmental context.

There is now a wide range of tools and applications that can help in these areas.

In addition, there are more and more specialized companies offering broadly diversified services in the field of technology.

Information availability

The increasing number of tools and applications that can be used for data analysis makes it possible to collect and gather more and more data.

It is therefore important for a company to define exactly what data is collected for what purposes, how and where it is stored and, above all, how this information is to be evaluated so as not to lose track of it all in the flood of data.

A clear, structured and efficient approach is therefore essential when it comes to acquiring and using information to adapt one's own thinking and actions.

Ecological environment

Broad spectrum of relevant topics

There are some ecological aspects that influence the activities of SWISS Gate AG.

It is imperative that corporate social responsibility be fulfilled, which is why an active commitment in areas such as nature conservation, equal rights or sustainable business is essential for market participants in the international market. It is important that all ingredients come from conflict-free areas and, as far as possible, from organic bio-productions.

Products made from hemp-derived ingredients offer an interesting diversification opportunity here, as various ingredients can also serve as substitutes for wasteful or unhealthy resources, for example in nutrition and personal care, or even in construction or the textile industry.

Protection of plants & animals

In recent decades, nature has been affected more than ever by negative influences that can be traced back to human behavior.

For the future, it is essential that mankind finds a more conscious way of dealing with plants and animals and thus restores the natural harmony between all living creatures and nature.

International efforts are therefore now focusing more strongly again on the protection and conservation of species that are already threatened, as well as on preventive education and information for people to promote environmentally conscious behavior.

CO2 Neutrality & Food-Wasting

Another important issue is CO2 neutrality. Most CO2 emissions today still come from the combustion of fossil fuels.

To a lesser extent, industrial processes such as the production of cement and other building materials are also responsible. Agriculture also plays a major role in the release of climate-damaging gases, for example in the mass production of animal foods such as beef.

Various measures are therefore now being taken in these areas in order to be able to reduce CO2 emissions and the associated negative impact on the global climate in the long term.

Another important issue is the scarcity of resources that meet humanity's basic needs, such as food and water.

In the long term, therefore, there is a risk of increasing global inequality in the distribution of vital resources, which will lead to humanitarian disasters if timely countermeasures are not taken.

Therefore, food waste is an ethical problem that must be addressed immediately for environmental, social and economic reasons.

Legal environment

International agreements

When it comes to the international regulation of hemp, the United Nations (UN) Single Convention on Narcotics is basically the guide.

This convention was created in 1961 as an international treaty with the goal of restricting the availability of certain substances. As an international treaty, the Single Convention binds more than 180 countries on an international legal basis and, in some cases, directly influences national narcotics laws.

The treaty is continuously adapted, but often lags behind the more rapidly changing regulations of individual countries and is therefore considered outdated in certain areas.

Liberalization & Legalization

Due to the lack of topicality of the international agreement, as well as from the point of view of protecting the health of their own population, especially youth, in recent years more and more UN member states have begun to adapt their legislation regarding hemp and its ingredients.

The existing laws often refer to the hemp plant as a whole and not to individual ingredients. This outdated view is to be countered with new, more liberal legislation, with the aim of drying up and suppressing the existing illegal market.

Generally relevant legislation

In addition to hemp-related regulations, there are many other legislations that are relevant today.

For example, legislation in the field of pharmaceutical law, food law, cosmetics law, competition law, commercial law, tax law and energy law are of great importance, to name just a few of the legal areas concerned.

Other subject areas are, for example, agricultural law, health law, information law and traffic law, which are applied in connection with hemp.

Market segmentation
Medicines & Remedies
Cannabis medicinal products are understood to be the totality of cannabis products used, including flowers, regardless of their legal classification. As a rule, these products contain more than 1% THC. In medicine, cannabis is mainly used for chronic conditions such as pain caused by cancer, seizures, spasms, as well as for malaise or to stimulate appetite during chemotherapy.

The interest in medicinal products with hemp-derived ingredients is steadily increasing, although the research regarding the effectiveness in medical applications is still very young and therefore insufficiently proven. There are many reports of experiences, but often no clinical studies yet.

In 2019, the Federal Office of Public Health FOPH issued nearly 3000 exemption permits for cannabis medicinal products in Switzerland. In June 2020, the Federal Council also adopted a recommendation to parliament recommending that medical access to cannabis with a THC content of more than one percent be facilitated. To this end, the relevant legislation is to be amended so that the dispensing of medical cannabis no longer requires a special permit from the Federal Office of Public Health FOPH and the responsibility for treatments with medical cannabis lies with the medical profession. The corresponding amendment to the law came into force in August 2022, lifting the ban on cannabis for medical purposes.

As a result of the amendment, the cultivation, processing, production and trade of cannabis for medical purposes became subject to the authorization and control system of the Swiss Agency for Therapeutic Products swissmedic. Since then, doctors have been able to prescribe cannabis medicines (e.g. so-called "extemporaneous preparations", i.e. medicines produced by a pharmacy on a doctor's prescription). As a medicinal product, Sativex is still the only cannabis-containing medicinal product that is approved under medicinal product law in Switzerland and may be dispensed directly by physicians.

Currently, cannabis medicinal products are reimbursed by the compulsory health insurance only in exceptional cases. However, the available evidence on efficacy and cost-effectiveness is currently insufficient for general reimbursement.
Luxury food
For some years now, products with hemp plant ingredients whose tetrahydrocannabinol (THC) content is below a certain limit have been allowed to be marketed as stimulants in various countries.

The cannabidiol (CBD) content of a product is generally not subject to any legal restrictions. The product range offered on the market extends from lifestyle products such as CBD flowers, CBD hash as well as CBD pollen and CBD oils for humans and animals to accessories.

All products are subject to clear legal regulations, which may vary depending on the geographical market.
In the area of foodstuffs, the focus is primarily on hemp seeds and hemp leaves. In order to be able to place foodstuffs with hemp plant ingredients on the market or to use them as a food ingredient, it must be checked in each case whether these foodstuffs qualify as novel foods.

This is the case if it cannot be proven that the food was already consumed to a significant extent in Switzerland or the EU before May 15, 1997.

The maximum permitted THC content in a foodstuff is defined in Switzerland in the Contaminants Ordinance (VHK) Maximum Levels and may not be exceeded.

On the other hand, foods containing cannabinoids such as CBD, CBG, CBN, etc. are listed in the Novel Food Catalogue of the European Commission as novel foods, since their use as food is not detectable before May 15, 1997. They can only be marketed in Switzerland with a permit from the Federal Food Safety and Veterinary Office (FSVO) or an authorization from the European Commission.

The following products made from hemp seeds are not considered novel foods and can therefore be used as an ingredient in food: Hemp Seed, Hemp Seed Oil, Hemp Seed Flour & Defatted Hemp Seed.

For these products it could be proven in the EU that they were already used as food before May 15, 1997. They are therefore not subject to approval.

Herbal tea made from leaves of the hemp plant is basically not considered a novel food in Switzerland. On the other hand, anyone wishing to produce, import or place on the market herbal tea obtained from the flowers must provide evidence that this herbal tea was already being consumed as a foodstuff in significant quantities before May 15, 1997 and is therefore not to be classified as a novel foodstuff.

Herbal tea made from hemp leaves can be used to flavor food without a permit. The basic requirement is that the herbal tea is used as an aqueous infusion and not in any other form (e.g., concentrated or syrup).

When hemp leaves are used, the novelty of the food product must always be verified, as only one use as herbal tea is known. In addition, products with hemp plant ingredients must not fall under the Therapeutic Products Act (HMG) if they are to be approved as foodstuffs.
Wellness & Cosmetics
Cosmetic products with hemp plant ingredients, especially CBD, are gaining more and more acceptance in the areas of body, skin & hair care. The offer ranges from various creams to liquid care products and bath balls as well as bath salts to shampoo, conditioner, shower gel.

Only CBD extracted from hemp leaves or produced synthetically may be used in cosmetic products. CBD extracted from hemp flowers may not be used in CBD cosmetic products.

In general, a cosmetic product must be safe by definition. The safety of the individual ingredients must be proven in a safety report. Furthermore, references of any kind to disease-curing, disease-soothing or disease-preventing effects of cosmetics (e.g. medicinal or therapeutic properties) are prohibited.
Industrial & Raw Material
Hemp is popular as a renewable resource because of its easy cultivation and complete usability. No herbicides are needed because the plants completely shade the ground after only a few days, so no weeds can find light. It is also extremely pest resistant and low maintenance.

Hemp produces more biomass than any other native crop, absorbs an above-average amount of CO2 per hectare under cultivation, and requires little water to grow. In addition, hemp is extremely versatile and is valued for its high durability, environmental compatibility and low energy footprint.

Hemp is accordingly used as a diverse industrial & raw material in various industries. Thus, biomass and fibers are used for the production of textiles and paper as well as consumer & packaging material and in the automotive industry.
Illegal narcotics
Cannabis products with a THC content of more than one percent that are not approved by authorities for medical purposes are prohibited for production, consumption and distribution in Switzerland.

On March 31, 2021, the Federal Council approved the ordinance on pilot trials for the controlled distribution of non-medical cannabis with a THC content of more than one percent.

"These studies are intended to expand knowledge on the advantages and disadvantages of controlled access to cannabis," the Federal Council announced in its March 31, 2021, media release (Swiss Confederation - The Federal Council, 2021). Once evaluated, the results of the pilot trials will serve as a scientific basis for further political regulation regarding cannabis.

Starting May 15, 2021, applications for the implementation of a pilot trial can be submitted. In this regard, the Federal Office of Public Health communicates the following: "Pilot trials can be carried out by private or public organizations such as universities, municipalities, cantons, research institutes, associations, foundations, etc.. A recognized research institute must be involved in each pilot trial.

A permit from the FOPH is required to conduct a pilot trial. The cantonal and municipal authorities must be contacted prior to submission of the application in order to clarify aspects relating to the protection of public order, safety and the protection of minors. The proposed outlets are to be approved by the relevant municipal authorities." The first results of the pilot tests are expected by the Federal Office of Public Health FOPH from 2024.
Key market figures
Market volume
In 2022, the market volume of the international cannabis market was around USD 25 billion.
Market potential
The market potential of the international cannabis market is estimated to be around USD 47 billion by 2025, almost double the current market volume.
Awareness level
In surveys, 74% of all participants say they have heard of products with hemp-derived ingredients.
Usage rate
26% of all consumers use products with hemp-derived ingredients at least once a day.



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