The Changing Landscape of CBD in the UK

By Mike Barnes
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Reports estimate that up to 8 million people in the UK use CBD for its variety of wellness benefits. The market is currently worth £300 million, a figure which is expected to more than triple in the next five years.

Sales of CBD already outstrip those of Vitamin C at £301 million vs £119 million and given that almost 90 percent of users in the UK purchase CBD online, new investments into omnichannel and e-commerce capabilities are likely to lead to even more growth.

Yet, for all this excitement, the truth is the UK’s CBD industry is facing a bit of a roadblock.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Until this year, CBD has been in a period of regulatory uncertainty and the industry faced understandable criticism when high profile cannabis probes found that over half of the most popular CBD oils did not contain the amount of CBD promised on the label. On February 13, 2020, the Food Standards Agency (FSA) unveiled new plans to better regulate the industry and announced a deadline of March 31, 2021 for the submission of a valid application for novel food licence for businesses selling food and food supplements containing CBD in the UK. Contained in the announcement was a warning to all CBD companies that failure to comply may result in products being taken off the shelves.

Consumers are also advised by the FSA to “think carefully” about taking CBD, and not to consume more than 70mg a day, making the UK the first country in the world to set recommended limits for CBD consumption, despite no scientific basis for the 70mg recommended limit.

Whilst it is undeniable that the CBD market requires some form of regulation and standards need to be raised for CBD products, to ensure consumers are receiving safe, legal and quality products, this will be a complex and costly process. CBD companies, particularly smaller CBD brands, will need to ensure they have the necessary infrastructure, expertise and resources to meet this deadline.

The deadline is fast approaching, and no extension has been granted despite of the difficulties caused by COVID-19. This will put all businesses under pressure, as the process for applying for Novel Food status requires supplying a large amount of data from rigorous testing. For larger players, this will likely be nothing more than a costly inconvenience, but for smaller, nascent businesses, these costs may put their longevity at risk. There are hundreds of CBD start-ups which have done great work to future-proof their businesses and create safe, high-quality products. Now, instead of preserving costs to try and stay afloat during the pandemic, these businesses must put a significant amount of precious resource and funds into finalising their applications in time.

Improving end user confidence in CBD products and understanding the process from seed to shelf is crucially important in this developing industry, however, I firmly believe these regulations are suffocating the market. I fear that on April 1, 2021, many smaller firms who haven’t managed to achieve Novel Food status yet have a superior product, will suddenly find themselves unable to legally trade.

On the other hand, there is the argument that the FSA ruling may increase the importation of CBD products from firms based outside of Europe. So far, the large cannabis firms in North America, which have the budget and expertise to meet FSA standards, have held back on importing CBD products to the UK. This may well have to do with the slightly dubious legal status CBD has so far had in the UK, so it will be interesting to see whether this changes in April next year and which players will enter the market. The CBD market will continue to grow and diversify but it will be essential that this leads to increasing consumer choice rather than confusion.

In my opinion, the only way the UK will be able to fully harness the potential of CBD is to create an independent, self-sufficient industry that not only helps consumers but contributes to the wider economy through jobs, skills and investment. The pandemic has done well to put a spotlight on the huge access issues cannabis patients face in the UK, bolstering the case to ‘onshore’ the industry.

Whilst this would require a streamlining and simplification of the licensing laws around growing cannabis, the development of a UK-based industry would have endless benefits. Not only would medical cannabis patients see improved access to their medication, CBD firms would no longer have to ship oil in from the dominating wholesale nations such as Poland, Czechia and Italy, this in turn having huge economic benefits. The development of a UK industry should involve the creation of a new regulatory system specifically designed for cannabis products and preferably for a new regulatory body, similar to the Office of Medicinal Cannabis in the Netherlands, to oversee all cannabis regulation, licensing, importation and approvals. This would mean a move away from the current solution of forcing CBD products into the Novel Food category and subjecting them to inappropriate regulations which will soon begin to smother the market with unnecessary red tape.

People are increasingly turning to more natural health and wellness solutions, so as Britons become better informed about CBD products and as the market matures, demand will certainly increase. Yet with both Brexit and standardisation of cannabinoid regulations occurring in parallel, the future and scale of the CBD market is still to be determined. A huge UK market could potentially help push it in a positive direction, facilitating processes for CBD producers.

The cannabis industry is resilient and until this point, has managed to grow at an exponential rate despite regulatory uncertainty. As acceptance and demand continues to increase, so the case for an independent UK industry will strengthen and regulatory roadblocks finally overcome.

Navigating COVID-19 in the Cannabis industry in the UK

By Mike Barnes
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There is no doubt all industries are feeling the effects of the coronavirus pandemic; however, cannabis businesses face a unique set of challenges.

Business operations, consumer behavior and financials will be analysed more than ever as businesses seek to position themselves during the pandemic and beyond when lockdowns will eventually be alleviated. As Benjamin Franklin said, “Out of adversity comes opportunity.” COVID-19 is an opportunity for cannabis firms to restructure their business model from a direct, consumer, wholesale and partnership level; eradicate inefficiencies and reassess launch or expansion plans.

Like many other sectors, the cannabis market should still expect to lose revenue due to factors like store closures, disrupted supply chains and restricted transport.

The outlook may seem bleak, but it’s not all doom and gloom when looking at the CBD and medical cannabis markets in more detail.

CBD consumption  

With social distancing measures still in place, cannabis firms which offer an online sales platform are seeing a surge in business. During COVID-19, there has been a greater focus on staying healthy and boosting immune systems which is driving consumers to a variety of health-focused products including CBD.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Fortunately, many of the physical retailers who stock CBD products in the UK have been permitted to stay open, despite a nation-wide lockdown, so some consumers are bulk buying their usual products while others are turning to e-commerce and delivery services. This demonstrates how quickly some firms have adapted to keep their businesses afloat.

However, border restrictions have tightened and as many supply and logistics workers remain in quarantine, the CBD market could see challenges in maintaining supply lines as the pandemic continues.

This comes in addition to CBD firms working to process a Novel Food Application and fulfill the necessary requirements by March 31, 2021. Despite lobbying from the Cannabis Trades Association (CTA) and despite the impact the global pandemic is having on the sector, the deadline has not been extended.

CBD businesses need to capitalise on the opportunities arising during this downturn; be creative and pin-point ways to keep CBD consumers engaged. By building on their brand and refreshing where necessary, they can attract consumers and develop a loyal customer base. Sustaining a strong online presence and enhancing social media and marketing strategies can lead to an increase of online sales. The brands which can leverage awareness and embody trustworthiness will be the winners.

CBD cannot cure COVID-19

As the epidemic continues into May, there has been no shortage of scammers attempting to try and short-change a fearful, confused population. Unfortunately, the cannabis industry has seen some shameful claims by CBD and hemp companies, notably in the US, who claimed their products could cure or fight off the symptoms of COVID-19.

CBD has been positioned as having several positive health effects by manufacturers and retailers – most notably in reducing pain and inflammation, decreasing anxiety and helping sleep – which may be on the rise within this unsettling environment.

The International Association for Cannabinoid Medicine (IACM), issued a statement on the coronavirus pandemic saying, “there is no evidence that individual cannabinoids or cannabis preparations protect against infection … or could be used to treat COVID-19.” Trials have been launched in Israel to explore whether CBD’s anti-inflammatory properties can be an effective COVID-19 treatment. Until this has been clinically proven, cannabis firms must not make unsupported claims.

Medical Cannabis

During COVID-19, health systems are under unprecedented pressure, which is impacting patient access to all medical treatments, including cannabis.

The medical cannabis industry has swiftly adapted to these challenges by rolling out video consultations and other online consultation services to enhance patient access.

While the Home Office activity for licencing will be limited during this time, companies must work with regulators to keep supply lines open, so that those in need receive their medicine without relying on black-market activity.  On April 29, the government published emergency legislation to allow patients to continue accessing controlled drugs for the duration of the epidemic, from pharmacies, without a prescription. This only applies to patients with ongoing NHS treatment, so there is still a long way to go, as private cannabis clinics must fill the gap in the meantime.

The global pandemic has impacted us all, and many patients are concerned about how they will access vital services. Many patients receiving medical cannabis have underlying health conditions which make them more susceptible to contracting COVID-19 and those with chronic neurologic conditions like epilepsy are in danger of suffering potential side effects.

Several of the qualities needed to survive the coronavirus pandemic – awareness, self-containment and support – are basic skill sets to carers. Beyond the pandemic, policy shifts, investment and education are needed to lift the barriers to medical cannabis access, and this will require all businesses operating in the cannabis industry to drive change.

2020 is a defining year for cannabis 

The cannabis industry is resilient against socio-economic, political and policy drivers- this we’ve seen time and time again. Now we must create an even stronger UK industry, where products are safely and readily available to those who need them. As the cannabis market matures and the competition things out, only quality cannabis products and services will be in play. Those that can innovate their approach to production, distribution and consumption during the pandemic can be the catalyst for long-lasting changes for the cannabis industry to operate for the better.