The APPG for CBD has addressed a letter to George Freeman MP stating that the UK has a once-in-a-generation opportunity to drive new growth with the cannabis industry.
The group highlights that the UK cannabis industry could be similar in size to the Scotch Whisky industry if the Government seizes the opportunity.
In order to drive the industry forward, it has requested an urgent meeting to establish a single point of contact between industry and government and to discuss the inclusion of the industry’s views around new regulatory frameworks.
In its letter to Freeman, Parliamentary Under Secretary of State in the Department for Business, Energy and Industrial Strategy, the group states that this framework will determine whether the CBD industry can flourish in the UK or whether it will be “destined for bankruptcy”.
Read more: Could ACMD recommendations put the UK CBD market out of business?
The APPG has been established to encourage the development of UK regulation on CBD products and its Secretariat Advisory Board (SAB) is comprised of 701 UK businesses – approximately 70 per cent of all active cannabis-related businesses in the UK.
Also included is Tenacious Labs, acting as secretariat, the Medical Cannabis Clinicians Society, the Cannabis Industry Council, the Cannabis Trades Association, the European Industrial Hemp Association (EIHA), the Scottish Hemp Association, the British Hemp Alliance and the Cannabis Services Advisory Board (Jersey). Co-chairs of the board are MP Crispin Blunt and Baroness Manzoor.
Developing a new economic sector
With the UK’s CBD sector having been estimated to generate £690m in annual sales in 2021, getting CBD product regulation right could create thousands of new jobs and generate millions for the UK, much akin to the Scottish Whisky industry.
This post-Brexit opportunity could build on the UK’s international bioscience reputation and would provide a new way to generate income for agricultural farmers who can use the crop when others fail.
Read more: Brexit: the perfect opportunity for UK to be centre of European cannabis
However, getting to this point will only be achieved if the UK government seizes the opportunity and listens to input from the industry when establishing regulations.
The letter states: “The Scotch Whisky Association estimates their industry in 2021 directly employed 42,000 people, with 7,000 of these jobs benefitting from being in the rural economy, and had an annual gross value added of £5.5bn.
“The UK finds itself with an enviable opportunity to take advantage of a leading position in the nascent stages of this novel burgeoning international industry which is already heavily consumer demand-driven and is crying out for clear and practical regulation.”
Speaking to Cannabis Wealth, CEO of Tenacious Labs which is secretariat of APPG, Nicolas Morland, commented: “What we have at the moment is a situation where the industry has not spoken with a single voice.
“This has got to be done as a public, transparent process with the industry genuinely being represented – because one of the issues we’ve had to date is that people with very narrow interest bases are presenting themselves as representing the industry – and it’s not true.”
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Morland is chairperson of Jersey’s Cannabis Services Advisory Board, which is acting as an official conduit between industry and government.
In 2021, Jersey’s States Assembly passed an amendment allowing businesses on the island to have direct or indirect involvement with legal cannabis sectors overseas, meaning directors will not fall foul of Proceeds of Crime legislation. This progressive development is miles ahead of where the UK currently stands on cannabis-related business – with the majority of companies unable to list on the LSE, for example.
Morland said: “We need to change the law on Proceeds of Crime because otherwise you can’t have a bank account, and the investors can’t send their money across. It needs to be updated – Proceeds of Crime involves multiples of gross international turnover. We have got a window where we can in effect set up the equivalent of Scotch Whisky, and it would be premium and long term.”
Establishing regulations that work
The UK is making moves to be the world’s first regulated CBD market. The Food Standards Agency (FSA) recently published the anticipated list of credible CBD Novel Food applications which will be able to remain on the market as they progress towards final authorisation. Whilst the process has been welcomed by many in the industry, others have described it as “monumental waste of time and money”.
Additionally, Kyle Esplin, chair of the Scottish Hemp Association has pointed out that the Novel Foods authorisation process was triggered by reports of CBD products containing four times the recommended amount of THC. Esplin states that the FSA has not followed its own criteria after CBD food products have appeared on the list with well above the FSA’s criteria and the Advisor Council for the Misuse of Drugs (ACMD’s) safety recommendations.
The ACMD produced a report containing recommendations that CBD products should contain no more than 50ug THC per serving. A separate report from the Association for the Cannabinoid Industry (ACI) suggests a THC safety limit of 0.03 per cent, which is 21 μg per day. At this point, the ACMD’s recommendations are not law, but the APPG is emphasising getting regulations right from the outset to ensure that the industry is not quashed before it can blossom.
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Edward Henry QC and Jade Proudman, founder of Savage Cabbage and official UK distributor of Charlotte’s Web CBD, have suggested that some of the ACMD’s recommendations included in the report are “less than scientific” and that the “CBD sector is at risk of being put out of business by them.”
Esplin highlights that: “If the ACMDs recommendations were applied then full spectrum products on the list with 0.2 per cent THC greatly exceed serving limit,” and that “if the ACIs recommendations were applied then one single drop of oil at 0.2 per cent THC would have to be divided across four days of consumption to stay within ACI’s safe levels for trace THC consumption.”
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Morland highlights that the ACMD recommendations have been developed around isolate-only products and that elsewhere in Europe, there is a limit of 5mg.
Morland commented: “What’s happened with the ACMD report was that there was nobody commercial on that at all. Nobody’s involved. There should absolutely be consumer protection. The issue with Novel Foods is that whoever has provided some of the information the first draft has done it with laboratory-grown isolates, for which there is very little consumer demand.
“There is some, and there are specific parts of the market where it’s relevant, but it’s not broad-based enough to mean that anyone would invest in the UK for it. We need to make sure that the law doesn’t change so that you can’t have plant-based cannabis products, because consumers aren’t interested in just having isolate products. Isolates are an important but small part of the industry.”
Whilst the recommendations have been developed on the basis of consumer safety, the World Health Organization (WHO) has confirmed that CBD is not a narcotic, and poses no health or safety risks.
Esplin highlights that if the UK follows the path of the ACMD or ACI recommendations, and legislation was changed to allow farmers to harvest flowering crops and process them, it would lead to a situation where there would be so much extra refinement needed to the materials that the supply would not compete with ongoing importation of isolate and distillate.
Esplin commented: “We feel the industry has not been well represented within the political circles and within Westminster.
“We’ve put forward about the importance of full-spectrum and how consumers were not really satisfied by an isolate-only or isolate-dominant market, or along the lines of what would fit with the ACMD recommendations. They very much give the impression that they didn’t think consumers are so well informed to know that they want full-plant. That has given the impression their understanding was not fully comprehensive of all those operating within the hemp and CBD space.
Read more: More than half of UK public supports cannabis legalisation
“It’s been great to see Tenacious Labs turn up and start this process – they’ve been influential on Jersey and Jersey is ahead of mainland UK. We can learn from other experiences around the world and set a real shining example of how the hemp and CBD industry could be in the UK and go a different way from Europe given the opportunity we have just now.”
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