In 2019, the value of the UK’s cannabidiol (CBD) market was put at around £300 million. To put that into perspective, the Vitamin D and Vitamin C markets are estimated to be worth £145M and £119M, respectively. It’s believed that the average customer spends around £25 a month on CBD products. Customers with more severe medical needs can spend up to £55 a month.
What’s more, unlike the vitamin market, the growth of the CBD market appears to be only just beginning. It’s projected to be worth £1B by 2025. If this seems like an unrealistic prediction, then it’s worth remembering that previous growth predictions have been shown to have underestimated growth rather than overestimated it.
The current legal status of CBD and cannabis in the UK
It is hard to say exactly when CBD went mainstream in the UK. It is, however, clear that the market is growing at a rapid pace. Between 2017 and 2018, the number of CBD users rose from 125,000 to 250,000. Between 2018 and 2019, it rose to 1.3 million.
Although CBD itself is perfectly legal, CBD products have long occupied a regulatory grey area. They were typically marketed as ‘supplements’ that did not make any formal claims about their medical benefits. This avoided the financial and logistical challenges of organising testing.
However, when it comes to cannabis, it is either already accepted or is moving towards acceptance. Its exact legal (and social) status can vary (greatly) from place to place. The overall trend, however, is clear. Unfortunately, the UK is, currently, way behind the curve.
The UK’s position on cannabis is fairly clear. It is illegal to grow cannabis. It is also illegal to grow hemp without a licence. These licences are virtually impossible to get.
It is also illegal to possess any cannabis-derived product with more than 0.2 percent tetrahydrocannabinol (THC). The only exception to this is if you have a medical prescription. These are also virtually impossible to get.
In principle, it is legal to sell, buy and use cannabis-derived products if they have at most 0.2 percent THC. In practice, this is about to become a whole lot more challenging. As of April 1, 2021, all CBD products will need to be validated by the Food Standards Association before they can be sold legally in the UK.
The validation process is expensive, extensive and logistically-challenging. It is therefore questionable how many smaller CBD-companies will be able and willing to go through with it. This question becomes especially pertinent considering how Brexit may impact the CBD-supply-chain.
Brexit and cannabis
The fact that it is effectively impossible to grow hemp in the UK, let alone cannabis, means that the UK’s CBD sector is dependent on imports. For logistical reasons, the vast majority of these imports come from the EU. Pre-Brexit, this was a minor inconvenience. Post-Brexit, it could become a major hurdle.
Right now, the new procedures for transporting goods between the UK and the EU (in both directions) are leading to all kinds of confusion and, hence, delays. These are, of course, being compounded by the knock-on impact of COVID-19.
Hopefully, both of these problems will be resolved soon. It is, however, virtually unavoidable that the increased administration required to transport goods between the UK and the EU will lead to increased costs.
It’s also questionable to what extent these costs may be passed onto the consumer. People needing medical CBD may have little choice but to pay up. People using CBD for general wellness or milder conditions may, however, decide to cut back on their CBD usage.
Even those who are willing (or essentially forced) to pay may run into post-Brexit complications. This has already been demonstrated by the fact that people with severe epilepsy are currently unable to get anti-seizure medication, which has to be imported. Again, hopefully, this will be resolved, preferably very quickly.
Public opinion is already largely behind CBD
According to a survey by Cowen & Co., almost two-thirds of UK adults were in favour of CBD products being sold through either pharmacies or high street stores. This massively outweighs the 5 percent of people who thought that the sale of CBD products in the UK should be halted until further research was conducted.
What’s more, demographics favour the growth of CBD. The same survey determined that 15 percent of 25- to 29-year-olds had used a CBD product within the previous year. By contrast, only 7 percent of 55- to 64-year-olds had done so and only 8 percent of people in the 65+ age group.
These figures tally with other surveys by YouGov and Dynata, which showed that between 8 and 11 percent of all UK adults had used a CBD product in the previous year. Interestingly, survey data also shows that CBD usage is noticeably higher amongst females (13 percent) than males (9 percent). This may be because females are using it to treat menstrual pains.
Another survey conducted by YouGov in 2019 was focused on what CBD users looked for when choosing products. Over a quarter of respondents placed the highest value on clear product labelling and information on how the CBD was produced. Over a seventh cited advice on how to use the product.
With the younger generation firmly behind CBD, the pressure will surely mount on the government to do more, much more, to help the sector. It’s also possible that the younger generation will educate their elders on the benefits of CBD and encourage them to use it for common age-related issues such as rheumatism. This could build up even more traction for the recognition and growth of the CBD sector.
Glimmers of hope
The status of cannabis in the UK has long been an anomaly, and it has been increasingly hard to justify on any rational grounds. Even if you believe that cannabis is harmful, the fact that tobacco is legal makes it challenging to justify a prohibition on public health grounds. Similarly, the psychoactive effects of THC are analogous to those of alcohol, which is legal.
In short, it looks suspiciously like cannabis is banned, not on scientific grounds, but on political ones. It is probably not a coincidence that the U.S. Federal government also bans cannabis. That, however, may be about to change.
Prior to the election, the Democrat-majority House of Representatives passed the H.R. 3884 Marijuana Opportunity Reinvestment and Expungement Act (The MORE Act). The bill must now go through the Senate. This was controlled by the Republicans but is now held by the Democrats.
In other words, the U.S. Federal government may be on the point of doing an about-face on its position on cannabis. This would open the door to it using cannabis-based taxation to pay off its COVID-19 bill. It might also encourage the UK government to follow suit.