China's factory zones serve global cannabis industry —but don't try getting high there

Posted on September 18th, 2018 by Bill Weinberg and tagged , , , , , , , , , , , , .

ChinaThe global cannabis industry is increasingly dependent on factories in China's industrial zones—and fears being impacted by Trump's trade war with Beijing. Chinese pharmaceutical firms meanwhile explore potential applications of cannabis. Yet possession of herbaceous cannabis can land you before a firing squad in China. Human rights groups express alarm about the furious pace of executions in the People's Republic—outstripping the rest of the world combined. And drug offenses—including pot possession—top the country's capital crimes.

Corporate globalization has hit the cannabis business as much as any other industry. US-based cannabis companies are now looking to low-cost labor in China to handle aspects of the industry that do not directly involve contact with the plant.

Industry leaders have expressed fears of being hurt by President Trump's trade war with Beijing. Those fears were given yet greater urgency by this week's news that Trump plans to impose 10% tariffs on a further $200 billion worth of Chinese imports—rising to 25% at the end of 2017. CNBC reports that Trump threatened in his statement announcing the move that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports."

KushCo opens Ningbo office
The latest cannabis-industry player to seek opportunities in China is KushCo Hodlings of Garden Grove, in California's Orange County. KushCo just announced the opening of an office in China, to seek production facilities there for child-proof packaging for cannabis products. Proactive Investors quoted CEO Nick Kovacevich saying:  "We continue to invest in stateside production but also recognize that strong relationships and serious investments in China are extremely important for any robust supply to function efficiently." KushCo is corporate parent for companies including Kush Bottles and Koleto Packaging Solutions that serve the legal cannabis and medical marijuana industries.

The office will be located in the Jiangbei district of Ningbo, a major port and industrial hub in Zhejiang province. 

Executions still off the charts...
But there's a certain grim irony here. Just as KushCo made its announcement, the Australian Broadcasting Corporation released a harrowing mobile phone video of an execution that took place somewhere in northern China. In the video, a man is taken into a field, flanked by dozens of security officers. He is forced to kneel—and then shot in the back of the head.

The account paints a disturbing picture. The death penalty is mostly imposed for murder and drug offenses—with the latter far in the lead, and including for cannabis. Convictions are usually secured through a confession, not evidence—and that is often extracted under torture, according to human rights monitors. An intimidating 99% of cases result in convictions.

Organ harvesting from executed convicts was banned in 2015—but the practice likely continues. The ABC report quoted one courageous mother in Jiangsu province who has spent years protesting the 2008 execution of her son on what she calls a wrongful murder conviction . "We demanded to see the remains of my son, but the court refused," said the mother, Zhu Jingru. "His father was a surgeon, we wanted to see whether my child's body was intact.  They only gave us a slip of paper to collect his ashes the next day. It means they took his organs."

Executions in China are classified as state secrets. The names of those put to death are not released—even families only find out after the execution has taken place.  Also quoted was Zhen Lin, one of the few activists inside China publicly advocating against the executions, with an organization founded by dissident lawyers called China Against the Death Penalty. "Our estimate, sourced from court judgment documents and related media reports, says 2,000 [people] were given the death penalty in the last year," she said. "And that is a very conservative estimate."

The situation has actually improved compared to a decade ago, when there were an estimated 10,000 executed annually. Due to legal reforms, there is greater judical review for death-penalty cases, and the number of capital offenses has been reduced. But drug offenses remain on the list. "Thirteen types of crimes for the death sentence have been abolished, but China still has 46 types of crimes for capital punishment," Zhen Lin said. "We are pushing for non-violent crimes and drug-related crimes to be excluded too."

...including for cannabis
Back in April, Amnesty International issued its annual report on executions around the world, reporting the welcome news that they had dropped to 993 in 2017 from a 2015 peak of over 1,600. But the figure doesn't even include China, where the number of executions is not disclosed. Amnesty believes that China carries out more executions than the rest of the world combined. 

In its report the previous year, Amnesty called on China to "come clean" about its "grotesque" level of capital punishment.

And executions for drug offenses seem to be rising. Last December, The Guardian reported that authorities kicked off a new anti-drug campaign with grisly public spectacles in which suspects received summary "trials" before assembled onlookers at a stadium in the southern city of Lufang—and were promptly taken off to be shot. (The good news is that there was much outrage over this on Sina Weibo, China's social media network, according to the BBC News.)

And while most drug-related executions seem to be for methamphetamine, you can still be shot for cannabis possession, in quantities deemed to indicate trafficking. According to a report in Hong Kong's South China Morning Post last August, the quantities sufficient to land you before a firing squad are 10 kilograms of resin (hashish) or 150 kilograms of herbaceous cannabis.

An intolerant 'cannabis superpower'?
In an absurd contradiction, the South China Morning Post headline refers to China as the world's emerging "cannabis superpower." The People's Republic is the planet's top hemp producer, and a growing proportion of its massive yield is going to medicinal rather than the old industrial purposes. And not only for export—Chinese companies are now exploring the age-old use of cannabis in traditional Chinese herbal medicine to develop new patented products.

The Beijing-based Hemp Investment Group has partnered with the People's Liberation Army to develop a CBD-based product to treat post-traumatic stress disorder. "We expect the sector will grow into a 100 billion yuan industry for China in five years’ time," said HIG president Tan Xin.

In the most recent development, South China Morning Post reported in February that Hong Kong pharmaceutical company Meilleure Health International Industry Group has entered into a partnership with HIG to provide cannabis for development of new medicines.

So China is poised to become a major player even in aspects of the industry that do involve contact with the plant.

But meanwhile, you can still get the firing squad for possessing herbaceous cannabis—despite a tradition of medicinal cannabis use that goes back millennia in the Middle Kingdom.

Cross-post to Cannabis Now

Graphic: Perry-Castañeda Library Map Collection


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