Cannabis & CBD – a fast-growing UK industry
Just a few years ago, cannabis was seen as a harmful ‘gateway’ drug, a dangerous psychoactive that was illegal pretty much everywhere. However, in the past few years, attitudes to cannabis have changed fairly dramatically. From legalisation for medical and recreational use in Canada, some US states and other countries, to medical studies into the possibility of using cannabis to treat illnesses like Anxiety and improve sleep quality, the times are certainly changing.
These global changes are having an impact on UK law and medicine, as people look to cannabis as a way of treating mental health issues as well as life threatening illnesses. A drug known as Sativex, derived from the cannabis plant and containing both THC and CBD has been available in the UK since 2010, but is only available when prescribed by a doctor and is not widely used. In 2018, a review was published by the government examining the possibility of allowing certain patients to apply to use cannabis in order to treat life-threatening health issues, such as children with severe epileptic seizures and people suffering from multiple sclerosis.
Where there’s such overwhelming need for a product, the new entrants into the market can number in the thousands, and there is certainly money to be made. We’ve taken a look at exactly how much cash can be made from cannabis and its derivatives, as we form part of this market we also share some of our own insights into the industry.
The UK market, ranking behind the US, Canada and Germany in overall size is still worth an estimated £300m as of 2019, estimates range upwards of £500m in 2020.
Who benefits from the CBD Industry?
As with any rapidly growing industry, there are a lot of people who want to carve out a chunk of the rewards for themselves, and this makes the industry hard to control and hard to trust whilst in it’s infancy.
Currently, CBD products are sold as health supplements and are used by people who hope to improve their health and wellness. The problem with this is that as a largely unregulated industry, a lot of unscrupulous sellers try to make a quick quid by selling products of dubious origin for highly inflated prices.
Also, the fact that CBD is derived from cannabis makes for a potentially murky area of legality as well as a certain stigma – “is this a drug?” “Will I get ‘high?” are both common questions, No being the only answer!
Some people feel that CBD should be treated as purely medicinal, and as such should only be consumed under guidance, like many conventional drugs. This could lead to CBD only being available over the counter and not available as a food supplement, making it harder for people to access it. Naturally this is all par for the course for a relatively new supplement, and as more businesses start producing products, the price will fall, and consumers can be more discerning when shopping for CBD products
What does the future of the UK cannabis and CBD industry look like?
As more and more countries decriminalise and move towards regulating legal cannabis, experts suggest that the UK could be missing out on their share of a potential £49 billion industry by dragging their feet on legalisation. This is a generous estimate, but the huge increase in potential revenue from legal cannabis is undeniable.
Currently the UK has allowed for certain patients to access medical cannabis, although the current Tory government is somewhat tied up with COVID management as well as Brexit negotiations and implementation , meaning that cannabis legalisation is not a primary concern and is unlikely to be discussed in Parliament for some time. This is unfortunate as the cannabis industry across the rest of the world may surge ahead and leave the UK behind, depriving us of a potential tax revenue of an estimated £1 billion per year!
CBD & Novel Foods, how will this impact the market?
Novel foods regulations kick into force in March 2021, it’s a welcome addition to an industry that needs secure regulatory frameworks to allow it to continue to grow. Overall, we feel the impact from Novel Foods will be positive, a recent report from the ACI – (association for the Cannabinoid Industry) claimed that over 48% of consumers do not have total confidence in the CBD market at present. Novel Foods should fuel a change in how the industry is perceived and in turn, more people will begin using CBD in the lives.
The result of this path of new regulatory power may well spell the end for many small and independent companies providing CBD products, the cost of ensuring compliance with Novel Foods is high, in both costs and time. Some businesses simply won’t be able to afford the raft of testing required for a sufficient novel foods submission. Taking them out of the market from March 31st.
Consumer demand still climbs, we may see a market with less players but each with a proportionally larger share of the market as a result.
Only time will tell when it comes to how the market will look in the next 12 months!
If you’re looking to get involved in the CBD market with your own products, enter your details below and one of the team will be in touch to talk through our services with you in more detail.
James Rogers – Director