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ULU at the Natural Resources Forum
ULU founder Paul Hembery recently took part in a webinar hosted by the Natural Resources Forum – a well-known independent London-based think-tank covering industry and investment issues – about the outlook of the CBD industry in the UK. The Natural Resources Forum aims to bring together a number of different perspectives from the legal, political, and industry worlds in order to construct an accurate picture of what the CBD business in the UK might look like in future: a topic that is often shrouded in confusion and mixed messages.
The popular expectation was, post-Brexit in particular, that the CBD industry in the UK had an opportunity to take off in a mirror image of the burgeoning USA market. But, despite numerous studies outlining the benefits of CBD in relation to common medical problems, has this actually happened as anticipated? If not; why not?
The answer lies in a number of regulatory road blocks that have muddied the waters, even though their intention was to make the way that CBD is sold and marketed clearer. And in many ways, the legislative fall-out from Brexit has only added an extra layer of complication: with different rules potentially applying to the UK compared to the rest of Europe.
Taking part in the hour-long Natural Resources Forum session alongside Paul were some leading figures who offered their own takes on this contentious subject. Crispin Blunt MP chairman of the Conservative Drug Policy Reform Group, has consistently lobbied for a more intelligent approach to legislation. Sarah Ellison is Co-Head of Regulatory and Partner at law firm Fieldfisher, Tristan Gervais is Head of Chrystal Capital Cannabis Advisory – an investment banker specialised in the cannabis industry – Tara Raveendran is Head of Life Sciences Research at Shore Capital and Marcus Stuttard represents the London Stock Exchange Group.
The wide-ranging discussion – which you can watch in its entirety here – touches on a number of different viewpoints, but as Paul points out, the biggest single influence on the future direction of the CBD industry in the UK was the announcement at the start of last year that CBD products would be classified as a ‘novel food’ under new legislation and as such, that products could eventually be pulled off the shelves if they were not suitably certified within the framework of the rules.
Rather than opening up the market, this has shrunken it: because the expense and bureaucracy associated with novel food certification makes it a viable option for only the biggest players. Instead, the industry is likely to converge on white label solutions that focus on synthetic CBD, which is far easier to control throughout the manufacturing process.
That’s not good news for consumers as it means they will miss out on broad spectrum CBD, which – as the name suggests – contains the full range of terpenes found in hemp extract, contributing to the ‘entourage effect’ that allows users to gain maximum benefit from their CBD.
CBD isolate – the CBD on its own – is less effective. But that’s only a small element of the problem. People are likely to be presented with numerous different food choices, from beer to biscuits, in future: all of which nominally contain CBD. In reality, the actual CBD content will be so low that the effects could be barely noticeable.
And that’s likely to discredit CBD still further, reducing it to a marketing gimmick rather than an effective wellbeing remedy, eroding consumer confidence at a delicate time when education is key.
Education is one of the planks on which ULU is built, because without that people will never be fully aware of the reality of CBD and the market will never grow as planned.
“The lack of speed of delivery of the new legislation is a major struggle,” says Paul, talking about what Crispin Blunt describes a “regulatory nightmare” that is “wholly unfit for purpose for the types of products that this business is capable of producing.”
This opaque situation has also led to a lot of confusion between what is a “novel food” and what is a healthcare or beauty product, such as CBD topical creams – which ULU also specialises in. In all likelihood, the legislation is set to push more and more companies down that particular route, rather than products that are taken orally and can provide real solutions to real physical and mental problems.
Having said all that, the CBD business as a whole is still growing rapidly with plenty of interest: Tara Raveendran points out that the London listed cannabis market has doubled in size this year. But the challenges are still there, with urgent action required to make it easier for more people to benefit from the full range of products that ULU and similar companies in the UK can produce, to the highest possible medical standards.