By Guest Author
Just when you thought the ‘hype’ around CBD adoption was a passing fad, UK’s nascent CBD market happens to be among the few industries maintaining an upward growth amidst the recent COVID-19 pandemic devastation in the UK economy.
The past few years have seen unprecedented growth in the UK’s CBD market. Thanks to vague regulatory standards, low entry barriers and increasing consumer interest, this industry has been a profit haven for SMEs in the country. Today, the UK has the largest CBD consumer market in Europe –worth over £400M and expected to hit the £1bn mark by 2025.
Also known as cannabidiol, CBD is a major compound found in the Cannabis sativa plant –mainly the hemp plant. CBD’s non-psychoactive and therapeutic effects drive the current consumer curiosity. More so, with COVID-19 leading to loss of jobs and people struggling to cope with lockdown measures and self-quarantines, more Brits turn to CBD for these, much needed, therapeutic effects.
A recent 2020 survey found that over 8 million Brits are spending on CBD products this year for its various benefits. By the end of the year, this sharp spike in CBD demand will see the industry’s revenue grow by 50% compared to 2019.
UK’s CBD Regulations
Despite research-backed benefits and significant consumer adoption, the CBD industry still faces major restrictive regulations from the authorities. Most of these CBD regulations revolve around;
- cultivation of specific cannabis plant, i.e., industrial hemp
- levels of THC in CBD products
- marketing and labelling CBD products accordingly
Today, most of the UK’s CBD is imported due to restrictions on the cultivation and extraction of hemp flowers –the major CBD source. One major stipulation when obtaining a license for hemp cultivation is that the farmer lawfully destroys the plant’s flowers and leaves after harvesting.
This means farmers can only grow and harvest industrial hemp for its fibre and seeds. These hemp parts contain very little CBD. As a result, UK companies obtain CBD extracts from around Europe or the US.
This lack of a level playing field with other hemp producers in Europe means UK’s hemp industry may not be financially viable in the long term –unless UK hemp farmers can also process hemp flowers and leaves.
Moreover, while there are no strict regulations on CBD importation, the imported extract should not contain more than 0.2% THC.
On the other hand, the THC content in a CBD product container shouldn’t exceed 1 mg. This is irrespective of the size of the container. Therefore, a 30ml bottle of CBD product should contain 1mg of THC; a 10ml vial should also contain 1mg of THC.
Besides, the UK’s Medicine and Healthcare products Regulatory Agency (MHRA) has made it clear that any product containing CBD cannot be sold as a medicine or make any medical claims. However, UK retailers can label and market their CBD products as food supplements. The Cannabis Trades Association provides a comprehensive guideline on how to market your CBD lawfully.
Is CBD a Narcotic? The FSA Disagrees
A lack of legal clarity and standard regulations on trading CBD products has led to huge variations in the quality and safety of products in today’s heightened market.
For instance, while the UK CBD market has some high-quality products, there is also a boom in high street products with misleading labels on CBD content and illegal THC levels.
As a result, the UK’s Food and Standards Agency (FSA) decided to follow the European Union recommendation that CBD is treated as a novel food. This move would require CBD companies to apply for novel food authorisation certificates for all their products.
While this move has the consumer’s interest at heart as it guarantees product safety, CBD experts believe it will lock out small CBD companies due to the financial outlay required to submit the novel food applications.
What’s more, the European Commission (EC) recently decided to classify CBD as a narcotic, hence pausing all novel food applications for CBD products. Most CBD players see this as an attempt to nip this young and vibrant industry by the bud. The decision –albeit subject to an EU vote– would make CBD illegal in all EU member states.
Luckily, for UK CBD companies, the FSA came out in September, stating they would not comply with EC’s decision. The FSA has already laid out plans to approve novel food applications in the country.
UK companies have until 31 March 2021 to comply with the new FSA legislation.
The Future of UK CBD Market
The UK’s CBD market hasn’t been well regulated for some years now –leading to an increasingly crowded marketplace. The industry is already diverging from the popular CBD oil to other product types such as capsules, topicals and even CBD-infused gummies like ZenBears. This trend is likely to triple the market worth to over £1bn by 2025.
Market statistics show high street chains are driving this market trend. Unfortunately, most of the high street CBD products don’t comply with set regulations, as shown by the 2019 Centre of Medicinal Cannabis Report. Consequently, we are now seeing most CBD companies providing 3rd party verification to prove quality and safety and maintain customer trust.
This need for independent verifications and the upcoming FSA regulations means few companies will get access to the UK CBD market going forward. On the one hand, this might be bad news for small companies due to the financial outlay required, while on the other, it might help root out bad practices in the CBD sector.
Besides, this will lead to the production of high-value CBD products and increased CBD acceptance by Brits.
What’s more, we might see CBD companies relocate to the UK for its growing market. This might go a long way to convincing UK’s Home Office to loosen the laws around hemp flower cultivation –ultimately levelling the playing field for UK hemp farmers.