Hemp Vs. Cannabis: What's The Difference?
Although they both belong to the same species, hemp and cannabis plants have very different attributes. Understanding these fundamental differences is crucial when it comes to making investment decisions. Keep reading for everything you need to know about the differences between hemp and cannabis.
Thanks to misconceptions by mainstream media, and legal classification by the government, it is easy to see why people assume hemp and cannabis are the same. That assumption is not entirely misguided though, as both hemp and cannabis derive from the same subspecies—Cannabis sativa. However, when you compare them side by side, the differences start to become apparent.
Knowing which plant will provide the most significant investment opportunity is a tough call, but at least by identifying their differences, you can analyse the market with a greater level of understanding. If you want more information on the different subspecies of the Cannabis sativa L. genus, you can read our previous article here.
Take a look at both plants under a microscope, and the differences become distinct. Both feature a complex and diverse mix of several vital components; these include cannabinoids, flavonoids, and terpenes. While both hemp and cannabis have a similar collection of compounds, it is the ratio in which they feature that separates the two.
Cannabis, the core commodity in the recreational marijuana market, has something hemp doesn't—vast amounts of the cannabinoid THC (tetrahydrocannabinol). It is the most abundant cannabinoid found within cannabis, and is responsible for the psychotropic effects for which the plant is famous (or infamous, according to the law).
Hemp, on the other hand, contains trace amounts of THC (less than 0.2–0.3% depending on jurisdiction). Instead, the most prominent cannabinoid within hemp is CBD, a compound that has gained acclaim for its therapeutic value. Although THC and CBD are the dominant chemical compounds, both plants contain a blend of over a hundred other cannabinoids. However, concentrations of these cannabinoids are significantly smaller, and at present, we do not know the full extent of their capabilities.
Hemp's minute levels of THC and years of selective breeding have made it the workhorse of industries like textiles, agriculture, and food. Hemp can be made into rope, cloth, paper, animal feed, and wax, to name but a few uses. The structure of the plant produces fibres that are incredibly strong and versatile. Before even thinking about extracting its vital cannabinoids, hemp can be utilised in a variety of ways.
In the case of the legal cannabis industry, hemp is most commonly used as a provider of CBD. By subjecting hemp to a sophisticated extraction process, it is possible to separate the chemical compound from all the others found within hemp. Once extracted, CBD can then be used in tinctures, oils, edibles, beverages, topicals, and cannabinoid-based research. Due to the intricacies of the equipment necessary for extraction, companies that utilise hemp tend to specialise in it. This also makes navigating the legal landscape significantly easier, and is something we will cover in more detail shortly.
The uses of cannabis come well publicised. Since 1961, the plant has been prohibited by the Single Convention on Narcotic Drugs. However, that hasn’t stopped it from becoming the world’s most used illicit substance, or from clawing its way back into favour. Many parts of the world have made local decisions to allow the legal use of cannabis for recreational or medicinal purposes. The cannabis plant is predominantly used recreationally for its effect on the mind when smoked, vaped, or eaten. Cannabis is also used medicinally, and is now prescribed to treat numerous medical conditions.
Legality is the one factor where both plants sit in very different camps. Having said that, until recently, hemp was lumped together with cannabis when it came to legal classification. However, a recent change in perception has seen the industrial use of hemp receive backing from several governments around the world.
The United States of America signed a bill in 2018 that made the cultivation of hemp legal as long as strict regulations are adhered to. In most of Europe, hemp is also permissible to cultivate as long as it contains less than 0.2% THC. Companies focussed on hemp will have a significantly easier time expanding their efforts due to the legal nature of the plant.
Cannabis, however, has not received the same amendments. The plant is still prohibited under regulations laid out by the UN, and across the majority of the world it is still considered illegal to grow, sell, or consume. That situation is slowly changing as many nations start to understand the real impact that cannabis has on health, lifestyle, and society.
Cannabis-centric companies are still perfectly viable, but they have to remain at the forefront of any legislative changes. It is also the constantly changing cannabis legislation that can cause share prices within the industry to fluctuate.