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The UK has the potential to become a leading player in the CBD sector | CBD World Online

 

For the CBD market to thrive, it requires clear regulatory framework, a supportive government and strong consumer demand. All three have aligned in the UK this year.

From a regulatory and government perspective, signals from the FSA and the Home Office are increasingly positive. While rightly making consumer safety the top priority, they seem to be putting consumer choice and the desire to support the development of the UK industry in a firm joint second.

The final ingredient – consumer demand – is certainly there. As a ‘hero ingredient’, CBD has the potential to enhance multiple categories and formats. In the soft drinks industry, for example, it could in time match the £2bn energy drinks subcategory, representing over 5% of the sector’s value. Another growing area is supplements. During Covid, consumers have increased their focus on supplements and health-promoting ingredients, including those providing CBD as the main component.

It’s all providing a renewed interest in the sector. I have seen major organisations that have been looking at CBD for several years now actively engaging in entering the market. When the owner of a multibillion-pound organisation joins a call on CBD, you know things are getting exciting.

But there remain challenges ahead. Last month the FSA validated the European Industrial Hemp Association’s novel food application (first stage) for both isolate and full spectrum CBD oil, and the Home Office opened constructive discussion with the industry in relation to permitted levels of controlled cannabinoids in CBD products.

While these are positive developments, full spectrum CBD oil poses the biggest challenge from the regulatory standpoint. By way of background, full spectrum or ‘regular’ CBD oil contains all the compounds found in the plant with only waxes, cellulose and fibres removed. These include a range of phytocannabinoids (notably cannabidiol or CBD) and many other ‘minor cannabinoids’ such as CBG plus terpenes and flavonoids. These components work in synergy to create what is known as the ‘entourage effect’, delivering greater benefits to the consumer than CBD alone. As a result, full spectrum CBD oil is preferred in the UK and represents the majority of sales by volume.

However, within full spectrum oils there will also be a trace level of ‘controlled cannabinoids’ including tetrahydrocannabinol or THC. These ‘naturally occurring’ levels of THC are far too low to have any intoxicating effects and are not present to the extent that would make recovery practical, but they have been an issue for the industry for some time, mainly due to the interpretation of the Misuse of Drugs Act (1971), which would technically make many of these products non-compliant. This legislation was written when CBD consumer products simply did not exist and hence the act was never intended to address the issue of low-level controlled substances within legal consumer products.

Still, post-Brexit Britain presents fresh opportunities for creating a vibrant and growing CBD sector. Indeed, the Taskforce on Innovation Growth and Regulatory Reform states its primary objective is to “scope out and propose options for how the UK can take advantage of our newfound regulatory freedoms”, and will report to the prime minister this month.

Against this backdrop, the UK is uniquely placed to become a leading operator within the sector and is already viewed as a key market by manufacturers across Europe and North America. An attractive market has high barriers to entry but low barriers to growth. A sensible regulatory framework, quality standards, and an increasingly educated customer base is building the entry barriers. And, for the brands that can comply and deliver, the market holds endless possibilities.

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