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How Hemp Can Deliver Growth In Agriculture – And Boost The UK Economy

By Mike Morgan-Giles, CEO, Cannabis Industry Council

NEW Prime Minister Rishi Sunak is set to face a daunting inbox of challenges, including stabilising our economy and protecting businesses and jobs. This is likely to include taking difficult decisions over tax and spending, some of which may prove to be unpopular.

Any improvement in economic growth will though help make these decisions easier, with more tax revenues available to the Government. However, it won’t be enough to tinker with existing sectors, but to enable the new industries of tomorrow to thrive and flourish.

Reforming The Agriculture Sector

One example of an industry ripe with potential is the cannabis sector. The UK is a leading player within the nascent global industry, but an array of regulation is putting this position in significant jeopardy.

Additionally, UK farmers are facing multiple challenges, including competing with larger businesses based abroad who may have lighter regulation, changes to agricultural subsidies, and the wider challenge of climate change.

Industrial hemp can play an important role in making the agricultural sector more dynamic and successful. It has a range of uses, such as paper, bio-composites, textiles, building materials and animal food, all of which are currently an untapped opportunity.

Environmental Benefits

Hemp also offers environmental benefits via carbon sequestration, and its use in crop rotation enables the following crop’s yield to increase by over 15% – therefore contributing to our food security. Hemp plants also require less fertiliser than other crops such as corn, thereby reducing costs, as well as the environmental impact of fertiliser usage.

The beneficial impact of hemp on biodiversity is considerable, due to it not requiring any pesticides or insecticides, it also provides a much needed late season source of pollen for our bee and pollinator populations. 

Hemp can also used as a biofuel, bringing further environmental benefits through reduced emissions, as well as potentially greater energy security. Additionally, hemp’s use as a source of alternative protein can bring down carbon emissions.

Reaching out to the construction sector will also help maximise the opportunities associated with hemp. The sector has to decarbonise in line with the Government’s binding net zero commitments, and the use of hemp can help bring down emissions.

Hemp is already used in eco-friendly homes and commercial buildings within Europe and Canada. Hempcrete, an alternative to concrete, brings savings in the long run, such as being an insulator and being resistant to both mould and fire. While hemp wood can be used as a sustainable option for flooring, instead of alternatives like oak.

Regulatory Changes

However, to see the full potential of hemp, regulatory changes are needed, including:

Hemp cultivation (except for flower production, for human consumption) should be removed from the need for an Industrial Hemp licence, while the licence condition requiring the flowers and the leaves to be destroyed should be scrapped (as UK farmers are currently disadvantaged compared to the EU and US).

The THC limit of approved hemp seeds should be increased from 0.2% to 1%, bringing the UK into line with Switzerland, and more competitive than the EU (which plans to bring in a limit of 0.3%).

UK farmers should be able to cultivate non-EU seeds, rather than having to utilise those listed within the EU Plant Variety Database (and their linked subsidy arrangements).

These three changes would bring significant benefits to farmers and consumers, notably by increasing choice, reducing bureaucracy, making the UK more internationally competitive with the EU, USA and elsewhere, and enabling farmers to make greater returns on hemp growing.

Other Opportunities

There are of course other regulatory barriers to maximising returns on cannabis cultivation. For instance, the EU Novel Food Regulations which authorise CBD products in our domestic market stifle competition, and hinder SMEs seeking to enter the market.

Reform of this policy by exempting CBD products produced safely for food supplement use from the rules (with synthetic and isolated CBD remaining part of the rules), would grow the UK industry. This would in turn bring benefits across the supply chain, including for farmers.

Furthermore, reviewing regulations around investment in the UK’s cannabis sector would help deliver direct foreign investment, and hopefully lead to the creation of a number of globally competitive ‘unicorn’ companies with a valuation of £1 billion or more.

If the cannabis sector is enabled to unleash its full potential, it will result in a more dynamic agricultural sector, generate economic growth, as well as helping us meet our environmental commitments.

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