Rules hold back local players as UK CBD market seen hitting €800 million

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A report released today shows the UK CBD market could generate £690 million (€800 million) in 2021 sales, outstripping estimates made in 2019 which predicted the market would reach only £526 million (€609 million) this year. Still, more government intervention and investment is needed “to ensure that the UK optimizes ‘Britain’s quiet cannabis revolution’,” the report urged.

The study, “Green Shoots – Sowing the Seeds of the New UK Cannabis Industry,” adds to the debate about guidelines for CBD in the UK, where sector interests are continuing a spirited fight over proposed rules which some say would stunt the industry.

The report was authored by the Association for the Cannabinoid Industry (ACI), a membership organization for businesses in the cannabis extract sector; and the Centre for Medicinal Cannabis (CMC), an industry body for medicinal cannabis producers.

Observing the potential doubling of CBD sales since 2019, a year during which the market was pegged at £314 million (€364 million), the authors said the “Green Shoots” report aims to sharpen up assessments of the UK’s market size. The £690 million estimate for 2021 is based on consumer survey results from polling last month by public policy and research specialist Public First, and population data from the Office of National Statistics.

‘Impossible to ignore’

“The size of this cannabinoid sector is now impossible to ignore,” said Paul Birch, Co-Founder of the CMC and ACI. “Almost without notice and certainly by accident rather than design, the UK has improbably become the world’s second largest consumer cannabinoids market.”

While the market estimate may cheer companies in the CBD sector, some stakeholders sharply dispute the “Green Shoots” study’s claim that the UK has “one of the most evolved regulatory frameworks in the world for CBD, and other cannabis extracts.”

“The Food Standards Agency has become the first regulator in the world to start the process of approving CBD products for legal sale,” the “Green Shoots” paper said in extolling advancements in UK rulemaking. “The Home Office have launched a consultation process to consider what is a safe and tolerable THC presence in a consumer product . . . and the first positive human clinical study results have been published,” the paper observes.

But stakeholders are pushing back against recommendations in an earlier CBD safety review now before the government, also produced by ACI and CMC, which they say would not be helpful.

Potential ‘disaster’

First, four UK hemp stakeholder organizations say proposed rules in the safety review, “Health Guidance Levels for THC in CBD Products,” if adopted, “would be a disaster for the burgeoning domestic UK hemp industry.”

The Scottish Hemp Association, British Hemp Alliance, Cannabis Trades Association, and the Northern Ireland Hemp Association recently issued their remarks on the ACI-CMC safety review in a letter on behalf of more than 1,000 domestic hemp and CBD businesses in the UK who are members of the organizations.

Those organizations are also signatories in support of a recently released white paper that found outdated laws and regulations are hindering the UK’s domestic CBD and medicinal cannabis industries. That report was endorsed by a total of 16 stakeholder groups, including the Parliamentary Group on Drug Policy Reform, a key body.

In their letter, the four associations specifically criticized a recommendation in the ACI-CMC safety review that would set a THC limit of 0.03% in finished hemp food and supplement products. Moreover, the document also recommends that CBD products containing between 0.03% and 0.2% cannabinoids be classified under Schedule 5 of the country’s Misuse of Drugs Regulations act of 2001.

Other organizations, such as the European Industrial Hemp Association, supported by other UK associations, believe that the ACI’s recommended daily intake of 21 µg of THC, nearly four times lower than current super strict guidance from European Food Safety Authority, “is not sound.” The organizations have said if the proposed THC rules are adopted by UK regulators, not a single drop of hemp seed oil would be available on UK supermarket shelves.

Key contention

While the ACI-CMC THC proposal would make CBD available over the counter in the UK, it is a key point of contention with sector stakeholders, who propose that hemp extracts derived from plants with under 0.2% THC be removed from all controlled drugs regulations.

THC levels can easily be calculated on a product by product basis, said Lyle Esplin, Chairman of the Scottish Hemp Association. “The 0.03% maximum was calculated based on taking 70mg CBD per day, and that would be the corresponding max THC, with an overhead ‘safety margin’ on the calculation,” Esplin said. “Many consumers want to take around 10-30mg CBD per day in a whole plant extract containing 0.1 – 0.2% THC. Why should their needs be overlooked?”

“CBD as a food supplement should be available to anyone who wants it, and all hemp extracts and foods up to 0.2% THC should be completely removed from the misuse of drugs act and exempt from controlled drug handling licenses,” the associations urged in their letter.

‘Unnecessary bureaucracy’

Like the EU, the UK’s Food Safety Agency has determined that food products containing CBD are subject to novel food safety standards, which must be met before new products can go on the market. FSA has already started the process of approving some CBD products under novel food rules.

“The ACI’s proposal will create further red tape around the plant and hinder the progress of the British hemp industry with unnecessary bureaucracy and restrictions,” the hemp associations wrote.

Esplin, who has been a leader in efforts to set clear hemp rules in the UK, said there is now cross-party support in the government that whole plant extract derived from CO2-based processing should be exempt from novel foods, with only CBD isolate and synthetically made CBD considered new foods. He said surveys have shown more than 90% of consumers want labels that indicate if products contain synthetic CBD.

The associations also chided the CBD safety review’s authors for even mentioning drug abuse in a report about CBD-based nutritional supplements, “which we know are safe as the UN removed the Schedule IV on CBD.”

“These recommendations are hugely damaging to a burgeoning industry that is visibly flourishing globally, where there are no restrictions,” the letter continues.

ACI-CMC safety recommendations

In addition to addressing key issues of THC levels and drug designations, ACI-CMC recommendations to the government based on the CBD safety review also include:

  • That warning labels be required to protect consumers who may be at higher risk of adverse reactions;
  • Development of post-marketing surveillance measures, such as a consumer app, to better identify product health risks;
  • That public guidance be constantly updated to clarify the legal controls on the manufacture and possession of products containing CBD and other cannabinoids;
  • That the Home Office and FSA issue joint guidance to the CBD industry regarding the regulations and requirements for the transport, manufacture, and supply of CBD-based novel and non-novel food products.

The Barnes paper

A second, related document supported by the 16 stakeholder groups aligns with that of the four associations’ positions on THC levels in consumer products, and removal of hemp products containing up to 0.2% from drug designation.

Presented in a white paper directed by Mike Barnes of Maple Tree Consultants, London, the argumentation calls attention to the potential for UK CBD production if clear regulations are established.

“Convoluted laws mean the UK currently imports the great majority of its CBD products and 100% of its medical cannabis, despite being one of the largest exporters of medical cannabis in the world,” the groups said in a release announcing the white paper.

That study also cited a “growing outcry from hemp farmers” who see the potential to earn as much as €11,500 per acre by growing hemp flowers. That would mean the UK’s 900 hectares of hemp farmland could be worth over €25 million if put into CBD production, the study found.

“A 1% THC maximum in hemp flowers (“on the field”) would establish a secure hemp flower industry in the UK and is the logical way forward to economically boost and support the domestic hemp market, thus keeping the UK competitive with the rest of the world,” the white paper also suggests.

‘Damaging lack of access”

Regarding medical cannabis, the Barnes paper suggests the government establish an “Office for Medicinal Cannabis,” such as that operating in the Netherlands, and encourage wider patient access by allowing general practitioners to prescribe medical cannabis.

“The cannabis industry is being held back and there is a real and damaging lack of access for patients in need of these products across the UK,” the paper observed.

In addition to the four UK associations, other stakeholders supporting the findings of the Barnes report are: CanCard, Cannabis Health Magazine, Cannapro, Clear, Conservative Drug Policy Reform Group, Labour Campaign on Drug Policy Reform, Medcan Support, Medical Cannabis Clinicians Society, Patient Led Engagement for Access (PLEA), Primary Care Cannabis Network and Prohibition Partners.

Profits fleeing

As noted in various previous reports, the ACI-CMC “Green Shoots” market analysis shows that due to restrictions on harvesting and processing hemp flowers in the UK, the bulk of the profits in the CBD industry are “going overseas.”

The “Green Shoots” report makes 20 recommendations, drawing on a submission recently made to a new governmental Taskforce on Innovation, Growth and Regulatory Reform, which is aimed at stimulating post-COVID economic growth in the UK. Among the recommendations, the report’s authors call for:

  • A dedicated agency to licence and oversee the industry;
  • A new center of excellence to fund, synthesize and promulgate the best new clinical evidence to boost the UK’s medicinal cannabis market;
  • Urgent reform of licensing policy to steer and harness the emerging scientific evidence across the whole industry spectrum: from agri-science and plant genetics, to novel synthetics, new therapies and clinical trials.

Discussion paper: UK Medical Cannabis & CBD Market
Health Guidance Levels for THC in CBD products: Safety Assessment & Regulatory Recommendations
Green shoots: Sowing the seeds of the new UK cannabinoid market

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