Embracing the CBD boom post-Brexit
We’re in the midst of a CBD boom in Britain
Everyone is talking about cannabidiol. Extracted from cannabis plants, CBD doesn’t have the psychoactivity of THC - CBD’s close cousin. In October 2016, the Medicines & Healthcare Products Regulatory Authority (MHRA) re-classified CBD in the UK as a medicinal ingredient - and people from all demographics are getting stuck into the new craze.
There is some concern that the MHRA’s current regulation of CBD, however, is too strict. The overly tight guidelines could, according to some in the industry, lead to CBD shortages as start-up companies struggle to cope with rigid guidelines. As always, it’s smaller suppliers and innovative start-ups which are hurt by tighter regulations – licenses to register CBD products as ‘traditional herbal remedies’ cost ridiculous amounts. The application itself costs £100,000 in the UK, and staff to keep up with the ever-changing regulatory landscape aren’t cheap either. Although the EU has seen phenomenal progress with the sale of CBD products in recent years, current laws are limiting growth. Perhaps it’s no wonder that markets like Switzerland – outside of aspects of EU regulation - are booming.
That’s why Brexit provides such an opportunity to unleash the CBD market in the UK. According to business analysts Prohibition Partners’ European Cannabis Report, even a No-Deal Brexit won’t threaten ‘the sustained development of the legal cannabis (particularly CBD) market in Britain. Indeed, there’s a strong chance that Brexit could super-charge the growing industry; Blair Gibbs, Policy Lead at the Centre for Medicinal Cannabis, said at the CBD Europe Expo last Friday that: ‘Brexit gives us a chance to diverge (from European regulation) and gain a competitive edge’ – pointing to Switzerland as a good example of the benefits of a regulatory landscape which allows CBD entrepreneurs to innovate.
Of course, regulation is important in order to protect consumer welfare – but government needs to be wary of doing what it usually does – and regulating innovation out of a flourishing market. The potential for CBD is enormous. In the United States, analysis from the Brightfield Group estimates that the CBD-hemp market alone could be worth $22 billion by 2022. Bethany Gomez, the Brightfield Group’s Research Director, points out the wide variety of issues which people are using CBD to medicate – PTSD, arthritis, sports injuries – but notes that federal regulations in the US are putting an invisible cap on the progress of the industry.
For Daragh Anglim, Managing Director at Prohibition Partners, the key issue facing the CBD market in the Brexit process is the uncertainty faced by industry leaders. He notes that investors are undoubtedly nervous about the future – but suggests that the CBD industry is one of the sectors likely to ‘emerge unscathed from the Brexit drama.’
There’s definitely a feeling that the CBD industry is only going to continue to rocket. At the CBD Europe Expo in London recently, I was amazed by just how broad the options are for the consumer. Vapes, gummies, moisturiser, muscle balm, lozenges and bath bombs – for example – mean the CBD industry is catering for consumers with all kinds of preferences or ailments.
The cannabidiol market, and the wider legal cannabis industry, is one of the most exciting prospects for the British economy – and a great example of how a lightly regulated free market can provide choice to consumers and improve standards of living for many. Post-Brexit, it could boom – provided lawmakers don’t regulate away all scope to innovate. The market for legal cannabis products is flourishing – and government should keep its hands off as much as possible.