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Amid the U.K.’s CBD Boom, Some Sound Concerns for Its European Success

Amid the U.K.’s CBD Boom, Some Sound Concerns for Its European Success

By Oliver Bennett, Special Contributor to New Frontier Data

As the pandemic tentatively recedes and nonessential shopping re-establishes some previous normalcy, CBD is gaining further inroads to mainstream retail activity in the post-COVID environment. In the U.K., CBD start-up Trip has joined Sainsbury’s Future Brands initiative and gained USD $5 million (GBP £3.52 million) to help launch its RTD cans and CBD oils into the markets including the U.S.

There is added significance given that Sainsbury’s is the U.K.’s second-largest supermarket chain – and rather than the pharmacies and boutiques commonly stocking CBD, it primarily operates big-shed grocery stores. It is also consistent, then, with the Food Standards Agency (FSA) rules to classify CBD products as novel foods. Trip, for its part, is rolling out drinks and oils across the high-end members club Soho House, and has established a partnership with London-headquartered multinational delivery company Deliveroo, demonstrating how even broader elements of the market are being addressed.

Suffice it to say that the CBD market is fast-growing in the U.K., and now worth more than both the vitamin C and -D markets in the wellness sector. CBD has for some while been available on High Street shelves of retailers such as Holland & Barrett, and Boots, with boutique wellness stores and pop-ups also selling vapes. Such segments have grown expansively since the 2017 change to CBD’s novel food status, and comprise the world’s second-largest CBD market, according to a report from the Association for the Cannabinoid Industry (ACI) and Centre for Medicinal Cannabis (CMC) called Green Shoots. As Paul Birch, cofounder of the ACI and CMC, asserts: “The size of this cannabinoid sector is now impossible to ignore.”

Demand for CBD grew during the U.K.’s pandemic lockdowns, with the market now estimated as worth £690 million (USD $980 million) – up from £400 million (USD $568 million) in 2020, and more than 2x over the oft-quoted 2019 figure of about £300 million (USD $426 million). It has been predicted that the U.K.’s CBD industry will surpass £1 billion (USD $1.42 billion) by 2025, making it the second-largest market behind the U.S., helped by a compound annual growth rate (CAGR) of 40.4% throughout 2020-2025.

Now is the market’s time to attain maturity, notes the Green Shoots report in calling both for a dedicated agency to licence and oversee the CBD industry, and a National Centre of Excellence to gather evidence for a baseline to support CBD’s efficacy in the wellness and medical domains. CBD is legal to be sold in the U.K. both over the counter and as a prescribed medicine, yet still needs to be proven reliable by having its claims tested and confirmed.

In moving toward those goals, the U.K.’s Association for the Cannabinoid Industry (ACI) has introduced a new 2022 Accelerator Package membership program to help CBD stakeholders navigate food safety regulations and hasten their success. The ACI package’s safety message is imperative, and its membership program is designed to further guide fledgling CBD products through the U.K.’s novel foods regime. It also hopes to raise public consciousness raising about cannabinoids and food safety in the U.K.

With the U.K. already a leader in Europe’s CBD industry, it may offer leadership elsewhere in the continent. Alphagreen, the U.K.’s leading CBD retailer for selling CBD since entering the segment in 2019, is set to expand across six other European nations – Germany, France, Spain, Italy, Sweden, and Poland. The broader availability affords CBD consumers to use the more convenient platform as a one-stop shop for a wider choice of products. Alphagreen has come to represent a de facto index for the CBD market, having expanded exponentially from its original listing of four brands with 50 products, to 160 brands with over 2,800 products.

As it continues, the CBD industry branches into ever more niches: As in the U.S., beverages mark a fast-growing category, both in CBD-infused alcoholic and non-alcoholic beverages. Pet food supplements, too, are growing apace, along with the aforementioned beauty and wellness products.

Consequently, the U.K.’s CBD market seems set to build on its historic strengths and move forward as a constituent component of the country’s post-COVID reconstruction. Nevertheless, some significant constraints persist, including the sector’s unregulated uncertainties and reliance on imports, notably from Switzerland.

For instance, despite CBD’s veritable momentum full-steam ahead, U.K. hemp farmers are up in arms, as they find themselves unable to extract CBD from hemp flower due to a U.K. Home Office policy disallowing their extraction of CBD from the whole hemp plant, instead offering licences which permit only the extraction of stalks and seeds. The policy has been decried as uncompetitive, while a report calls for a business model more like that of Switzerland (a key exporter), where farmers can grow crops containing up to 1.0% THC and avoid essentially ditching 80% of the crop. For the U.K.’s CBD rush to be sustainable, such supply-chain obstacles need to be overcome.

The post Amid the U.K.’s CBD Boom, Some Sound Concerns for Its European Success appeared first on New Frontier Data.

#CBD #Hemp https://newfrontierdata.com/cannabis-insights/amid-the-u-k-s-cbd-boom-some-sound-concerns-for-its-european-success/ June 1, 2021 11:59 pm

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