CAPSULES are set to replace oils as the preferred method of CBD consumption – as new research show the UK sector is set to generate £690m in sales this year.
On-going regulatory changes in the UK and Europe look set to drive a shift in consumer habits, says Tim Phillips, founder and Managing Director, of CBD-Intel.
If his prediction is correct this will signify a significant shift in consumer behaviour with its recent research showing that almost three-quarters of UK consumers use oils compared to just 16% using capsules.
Novel Food Shake-Up
Mr Phillips was speaking at the CBD Live on-line event organised by industry publication Cannavist, saying the switch will be driven by the regulations classifying CBD as a Novel Food.
This comes as new research from Association for the Cannabinoid Industry (ACI) and Centre for Medicinal Cannabis (CMC) says lockdown has boosted demand for CBD products.
Mr Phillips said: “The first products to get through the Novel Food process will be the most simple possible, the most conservative products with the least risk involved.
“This is going to lead to a supplement-style market to start with. A capsule, with a particular dose, in a conservative bottle saying take one a day has a much lower risk-profile than a fizzy beverages, which could be mixed with vodka in a night club, or a bar of chocolate where a child could eat 20 of them! We have to be realistic about the risk profile.
“We also believe isolates, from a toxicology and manufacturing perspective, will be safer supplements in the eyes of the regulators.
“And, consequently capsules will be much easier for regulators to approve than oils, and they will overtake them in the market.”
He went on to say Europe will follow UK ‘which is setting the regulatory pathway for the global industry’.
“The UK Novel Food rules will change the market dramatically and will give the industry the confidence to invest,” he said
Prices To Fall – Then Rise
He highlighted how prices retail CBD prices had fallen – by as much as 10% in the edibles category – with wholesale CBD prices in the US said to be down to as little as $200 a kilo.
However, as the industry consolidates, and as the Novel Food process forces non-compliant brands out of the market then the ‘price drops will slow down, stop, and then begin to rise’.
In the UK, CBD Intel has identified more than 8,000 products and some 420 brands with two-thirds of these brands selling into the ingestible space which are subject to Novel Food regulations
He went on to say he believes the Food Standards Agency is going in the right direction with the Novel Food process and despite getting a ‘hard time’ from the sector he believes it is ‘doing a very good job, balancing the creation of a regulatory environment with the interests of the industry’.
Sowing The Cannabis Seeds
The new £690m market sizing estimate from the ACI and the CMC comes with the launch of a new report pressing for a shake-up of the UK CBD and cannabis industries.
Entitled Green Shoots – Sowing The Seeds Of The New UK Cannabis Industry it concludes that the UK now has the most evolved regulatory framework in the world for CBD.
It cites the work of the Foods Standards Agency – to regulate products as dietary supplements, and by the Home Office – to consider what are safe and tolerable levels of THC contained in products.
The report calls for more government intervention and investment to ensure that the UK optimises what it describes as ‘Britain’s quiet cannabis revolution’.
And, it makes 20 recommendations drawing on a submission recently made to a new governmental Taskforce on Innovation, Growth and Regulatory Reform, established by British Prime Minister Boris Johnson to stimulate post-COVID economic growth.
These include; A dedicated agency to licence and oversee the industry, a new centre of excellence and a greater emphasis on agri-science, plant genetics, novel synthetics, new therapies and clinical trials.
