CBD (Cannabidiol) is a component of the cannabis plant that has historically-proven health benefits.
There is a lot that CBD can do. Its benefits range from reducing inflammation to easing anxiety and helping combat sleeplessness.
The CBD industry remained stigmatised for the major part of the twentieth century. But that is now changing. Increasing customer awareness about CBD has been one peg of the change. The second one is a regulation change. Both these issues have together brought about a boom in the CBD industry in the UK.
But that was before a massive public health crisis hit the world.
Before analysing the effects of coronavirus on the UK CBD industry, let us take a look at the state of the industry before the pandemic.
CBD Industry in the UK, Before Coronavirus
The Basics
CBD, Cannabidiol, is the most famous out of the 112 cannabinoids found in cannabis. Another prominent cannabinoid is Tetrahydrocannabinol (THC). THC has psychoactive properties and is addictive, unlike CBD.
CBD can be extracted from marijuana or hemp, but the latter remains the popular choice. This is primarily because of hemp’s high CBD and low THC content.
Tinctures, oils, skin patches, creams and vapours are the most common product forms of CBD.
Legality in the UK
CBD is legal in the UK. It is not a controlled or restricted substance but is subject to strict regulations.
The following regulations apply to the production and sale of CBD in the UK –
- Only registered companies can indulge in the production/sale of CBD in the UK.
- The maximum THC content allowed in CBD products in the UK is 0.2%.
- The CBD products should be produced from EU-approved industrial hemp strains.
Consumer and Market Trends
Here’s an overview of the CBD industry in the UK, depicted in figures
- About 8% to 11% of adults in the UK use CBD. That is around four to six million people.
- Better health and wellbeing was the most popular reason behind CBD consumption in the UK (54%). Followed by improving sleep (52%) and pain management (42%).
- The UK CBD industry was worth £300M in 2019.
- The industry is expected to hit the £1B mark by 2025.
- The average amount spent on CBD by CBD users in the UK is £25/month.
Impact of the COVID-19 Pandemic
The coronavirus has been a disrupter of routine for most industries. But, it has brought forth specific challenges for the CBD industry. With its unique set of pre-existing challenges, the CBD industry in the UK is facing peculiar struggles today. However, these challenges can become excellent opportunities too. Existing and new players just need to identify and tap the presented potential.
The impact of the COVID-19 pandemic on the UK CBD industry can be summed up in the following subhead –
Increased Demand
The pandemic has brought the media spotlight on boosting immunity and staying healthy. Most people are much more concerned about health and wellness now. And the tables have turned in favour of CBD manufacturers in the UK.
People are looking for natural products that promote well-being. And this has renewed interest in CBD.
During the lockdown, several physical retailers of CBD fell in the essential category. And remained open.
Demand has also increased for online channels. This is because Britons are following social distancing measures and stepping out less.
The medical cannabis industry has also taken apt steps to keep patients satiated with online and video consultations.
An emergency legislation was also rolled out on April 29. Patients with ongoing NHS treatment could source controlled drugs from pharmacies without prescriptions.
But for non-patient users of CBD, private CBD clinics and online retailers remain the only hope during the pandemic and beyond.
Fluctuating Finances
Cash strapped CBD manufacturers are facing a whole different level of financial fluctuations. The pandemic has pushed not just the national but even the global economy towards recession. And Forex rate fluctuations have negatively impacted many.
Opening international bank accounts is a solution. But it presents another set of challenges for the smaller market players. There is a need for detailed documentation, which acts as a deterrent.
All these issues have not just caused losses but have also made risk management a tough yet must, next step for most players in the CBD industry.
The Supply Struggle
The lockdown has kept several key workforce members at home. Thus, the supply of CBD is under severe pressure.
International border closures and movement restrictions have made it even more challenging. And now it has become tough for the CBD industry in the UK to meet heightened demand.
However, the supply situation is slowly getting better. Meanwhile, brands must rethink their presence and keep customers engaged.
This could involve brand image reconstruction, social media presence and spreading awareness.
Information & Acceptance
The most persistent and long-drawn hassle that the CBD industry faces is misinformation. And this is not limited to the UK but is a global phenomenon.
Social acceptance for CBD has been low. And it is more often than not related to the ‘drug’ aspect rather than the ‘wellness’ aspect.
During the pandemic, people have struggled much more than usual with anxiety, pain, and insomnia. These are conditions that can be tackled with CBD.
In such unprecedented times, the CBD industry needs to fight misinformation and expand its consumer base.
However, certain companies tried to bank on distressed masses. False claims were made that CBD can treat/prevent coronavirus. Those brands received major public and legal backlash.
But, responsible industry players like CBD Mania (cbdmania.eu) are taking positive steps. They have taken steps to spread awareness with a dedicated blog section. And it serves as a legal and convenient place to buy CBD-based products.
The Future
With Brexit getting no extension, it is expected that the economic disruption will deepen. And it might also continue for prolonged periods.
Jobs are at stake. Cash flows are dwindling. And now, it is natural to assume that even the CBD industry will face reduced demand. But, the situation is not all grim.
With the ongoing medical and economic crisis, a massive mental health crisis also looms over Britons.
The CBD industry in the UK is likely to benefit from the situation. People are likely to turn to CBD for a healthy and legal solution.
The industry, as a whole, should, however, take conscious and cumulative efforts to help society. This should be done while strengthening the customer base.
Also, increased online activity has opened new realms for the CBD industry.
Being responsible and shifting online is the only way forward for the CBD industry in the UK.
