The growth rate of the CBD (cannabidiol) industry has been incredible. A recent market report estimates the UK’s consumer CBD sector to be worth £690m in 2021 – more than double that of 2019, making it one of the largest markets globally.
With the rise in popularity of hemp derived CBD products, you would think UK hemp farmers are cashing in on this booming industry. Unfortunately, that’s not the case. Let us explain why…
Firstly, what is hemp?
Hemp is one of the most versatile plants on the planet with thousands of potential end uses for its fibre, seeds or flowers. It is a type of Cannabis sativa which has been used for millennia for many industrial purposes.
Hemp differs from recreational or medical cannabis as it is legal to grow in many countries and it contains only trace amounts of the more infamous cannabinoid, THC.
Historically, hemp fibres were used to make clothing, rope, paper and textiles while the seeds have traditionally been used for food and seed oils.
Hemp was once considered so vital to the economy that in the 1530s, King Henry VIII made hemp cultivation compulsory by law. For every 60 acres, farmers had to grow about 1/4 acre of flax or hemp, or else they would face a fine for breaking the law. You could even pay your taxes with hemp.
The traditional applications of industrial hemp still apply today and in more modern times we see hemp being used for the likes of biofuel, plastic composites and even as an environmentally friendly alternative to concrete, known as hempcrete.
Most recently, hemp has seen a resurgence in cultivation with the rise in popularity of hemp derived CBD products. As the market exploded in growth, hemp farmers had high hopes of turning their crops into extraordinary yields of CBD, at a crop value of £10,000 per acre. This is certainly far more appealing than the average of £400 per acre of wheat and £1,000 per two acres of industrial hemp.
However, while hemp farmers in other parts of the world have been able to cash in on the new CBD industry, UK growers have been left behind.
Why are UK hemp farmers not profiting from CBD?
To grow hemp in the UK, you must obtain a hemp cultivation licence from the Home Office, or the Department of Health if you reside in Northern Ireland. There needs to be a defined commercial end use and licences are only issued for the cultivation of hemp plants from approved seed types with a THC content not exceeding 0.2%.
Licences in the UK are only granted for the production of hemp fibre for industrial purposes or for obtaining seeds, which are then pressed for their oil. Sadly, hemp growers in the UK are unable to utilise the whole plant without an additional licence called a Controlled Drugs Licence, which is very difficult to obtain.
According the Home Office Industrial Hemp Licensing factsheet, the controlled parts of the plant (leaves and flowers) must be destroyed at the licensed location or otherwise lawfully disposed of. These are the parts of the plant which contain the most amount of CBD - it’s an incredible waste!
This means that UK hemp farmers are unable to lawfully process the valuable CBD-rich flowers and leaves under a hemp cultivation licence alone, and therefore miss out on profiting from the whole hemp plant.
For this reason, over the counter CBD products sold in the UK will have almost always been sourced from elsewhere, where the farmers are permitted to process the CBD-rich flowers and leaves without an additional licence.
Of course, wholesalers and retailers are making margins on imported CBD products, but much of the sale price comes from the production of the plant itself. Currently, despite the domestic demand for CBD products being quite substantial, this income is almost entirely lost to foreign markets.
In early 2021, Maple Tree drafted a special discussion paper for the Government outlining ten recommendations for the UK medical cannabis and CBD market.
One of the recommendations is to allow the cultivation of hemp flowers in order to extract CBD under an industrial hemp license. This would allow farmers and investors to make more advantageous returns on growing hemp and assist with more readily available high CBD medicines and supply for the wellness market.
If you’re interested in learning more about hemp and CBD, enrol in our online course and start your cannabis education journey today.
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