The UK’s CBD market has flourished despite the impact of COVID-19.
The rest of the world has steamed ahead with the legalisation of medical and recreational cannabis creating multibillion-dollar industries, while the UK has watched quietly from the sidelines. However, the UK’s CBD industry is now flourishing, creating ample opportunity for entrepreneurs and investors alike.
Professor Mike Barnes, of Medical Cannabis Clinics and Maple Tree Consulting, speaks to Health Europa editor, Stephanie Price, about the evolving UK cannabis industry and the opportunities for investment.
Medical cannabis and CBD in the UK
Despite the use of medical cannabis being legalised in the UK in November 2018, , the country’s CBD industry is only now coming into force and Barnes says the beginning of 2020 has seen the market grow despite the impact of COVID-19.
“At the beginning of 2020, the cannabis sector in the UK hardly exploded because COVID-19 came along and prevented that, however, it has still thrived even during this pandemic,” he said. “There are two aspects of the industry in the UK, the first being the prescription medical market. There are four cannabis clinics, and I am associated with one called the medcicalcannabislcinics.com. Our patient numbers are going up about 20% month on month and we have now seen 470 people who have been prescribed cannabis.
“Patients in the UK now have a bigger choice, we have about eight producers who can bring in oil or flower. Most importantly, from the patients’ point of view, costs are coming down. The cost has halved from January because of more patients being prescribed cannabis and partly because the UK Government changed its mind in March about getting bulk supply in the country, as previously it was only on a patient by patient basis – which added to the costs.”
It was recently revealed that the NHS may manufacture its own cannabis-based medicinal products (CBMPs) with a view to conducting clinical trials for children with epilepsy.
Barnes said: “In one sense it is good news – at last the NHS is taking this seriously. On the other hand, we need to know a bit more about it. However, it will force the children on the study to come off the cannabis medicines that is suiting them at the moment and go onto the trial medication or placebo. Taking children off medication that is working and putting them on a placebo is immoral, frankly.
“The other problem is that there is already a lot of good quality EU GMP producers in the UK now who could participate in the study to make the oil. The NHS making its own oil will delay the study by at least a year, if not more, because they will have to apply for licences and build an approved extraction facility.”
The other side of the cannabis industry in the UK is CBD, he explained, which is taken by around six million people, with a market worth about £300m.
“This is big business; the market is worth about £300m, and six million people are said to have taken CBD. Sales now outstrip Vitamin C and there are lots of good quality CBD companies springing up in the UK. With cannabis, it is such a personalised medicine that it is not something that lends itself to ‘big cannabis’ like ‘big alcohol’, or ‘big pharma’. It can be nimble and make different varieties with different terpenes and strains to suit different people. I would hate to see this industry dominated by ‘big cannabis’, I would like to see the industry in the UK very diversified, with good quality, smaller producers, which have different niches.”
The implications of Novel Foods applications
Companies looking to sell CBD products will now have to go through the Novel Foods application process. A Novel Food is defined as food that had not been consumed to a significant degree by humans in the EU before 15 May 1997, when the regulations were introduced. The Food Standards Agency (FSA) has given the industry a deadline of 31 March 2021 to submit valid authorisation applications.
Barnes said: “The Novel Foods application process may have an impact – the CBD industry has been a little bit of a mess up until now. There are some really good producers with high quality products, but equally there are people selling products that do not contain ingredients stated on the label. I agree there needs to be more regulation in the sector. To start, we need proper labelling. The public deserve quality, consistent products, but I am doubtful whether the Novel Foods process is the right route as it will drive the smaller players out of the market. We should not push out the ‘small guys.’ However, now we are out of Europe we need not go along with the EU. The sooner this is sorted out the better.”
The CBD market
While the international market dropped significantly after increasing in the latter half of 2019, it is now showing signs of stabilisation, making it a good time to invest in CBD, said Barnes.
He added: “It is a good time to invest in CBD, the international market went up in the latter half of 2019 then the market dropped significantly, however, it is now showing signs of stabilisation. CBD is going to continue to be a real player and its would be lovely to see a UK vertically integrated medical cannabis industry. There are two or three farmers in the UK who want to diversify into cannabis, which would stop supply chain and importation issues, and would also help with good quality, quick product supply that is reasonably cheap. This would also produce jobs at a time when the economy needs jobs and tax income. Colorado alone made several millions of dollars in tax revenue.
“There are 50 countries ahead of us on this. Big players like Canada, the United States, Australia, and Germany have come into the market and there have been mistakes made with investments. There is a lot the UK can learn and hopefully, we can get a lot of it right and get it better than those who are ahead of us.”
Please note that the opinions expressed in this article do not constitute any form of financial advice. Always seek independent, expert advice.