The CBD market is one of the fastest-growing industries in the world and the UK is one of the biggest consumers of CBD products.
According to the Association for the Cannabinoid Industry (ACI), the UK has ‘improbably’ become the world’s second-largest consumer cannabinoids market after the US, spending more on cannabis extracts domestically than vitamin B and C combined.
Research from Alphagreen.io, the UK’s largest marketplace for certified CBD products, suggests that more than eight million Britons are now buying CBD products, with spending exceeding £150m in the first four months of 2020 alone.
In May 2021, the ACI and Centre for Medicinal Cannabis (CMC) estimated the UK cannabidiol (CBD) industry will generate £690m ($959m) in annual sales for 2021.
This figure surpasses the previous prediction made by the CMC in 2019, which estimated the market would be worth £526m ($731m) in 2021.
One of the main reasons cited for the dramatic change in the projection of the UK CBD industry was the pandemic, a view which Richard Tonthat, Chief Executive Officer at CBD investment firm Greencare Capital plc, agrees with.
Richard said: “From my perspective, I think the CBD market in the UK is growing rapidly, but perhaps is not yet as big as some commentators and analysts think,” says Richard.
“There are a few hundred CBD brands in the UK, most of whom are doing less than £1m of sales per year and have little to differentiate themselves.
“The pandemic, I think, improved CBD sales as consumers sought to experiment with CBD to treat pain, help sleep and assist in relieving stress. CBD has also benefited from the trend towards plant-based diets and supplements.”
One CBD company that has experienced considerable growth in recent years is Orange County CBD. Since starting out in 2019, the UK-based company has experienced a 1400% increase in sales, and they also believe the pandemic has helped to boost the growth of the CBD market.
Rebecca Hughes, Head of Sales and Operations, said: “The pandemic has had a positive impact on the CBD market. With more consumers concerned about physical and mental health, CBD has become the key to ‘solving’ many of the issues people have started to face with the lockdown, such as relaxing, getting a better night’s sleep and other benefits.”
Are there any unique products and innovations currently in the CBD market?
As the CBD market has grown and developed, new products and innovations have become available. However, since CBD products are classed as a novel food by the Food Standards Agency, authorisation is required for CBD extracts and isolates to be placed on the British market.
According to the Food Standard Agency’s website, there are currently no authorised CBD extracts and isolates on the market. However, this hasn’t stopped CBD companies from branching into other areas.
“With the latest update from the Food Standards Agency, CBD companies are restricted from launching new edible products,” says Rebecca Hughes. “This leads most companies to invest in the cosmetic and e-liquid sector.
“We have noticed a growth in new CBD infused beauty products. Even brands that are not CBD focused like us, have opted to use CBD as an extra ingredient to promote anti-inflammatory and antioxidant benefits.
“Also, with topical products, we have more possibilities to make claims which are extremely restricted with edible products.
“For us, the beauty universe is a great opportunity to reach more consumers and be innovative. We have plans to launch a full range of products for the daily beauty routine next year.”
However, the beauty sphere is not the only place where unique CBD innovations could be set to appear.
“We are starting to see some innovative products in the CBD space, and I think the ones that will do well will need to be creative and blend CBD with other wellness supplements, such as vitamins, botanics, nootropics and adaptogens,” says Richard.
What trends can we expect to see in the CBD market in the near future?
Group Managing Director of CBD specialist retailer Origin’40 believes there will be better regulation of CBD products and regulation for advertising CBD products in the near future, with more innovations and growth for the market set to follow.
However, Richard believes we could see a significant reduction in the number of CBD companies in the years to come.
“As the CBD market matures in the UK, I think there will be winners and losers, with a significant reduction in the number of brands, either through M&A or simply leaving the market,” continues Richard.
“Hopefully, more institutional money and bank debt also enters the market to help CBD companies grow and expand and develop innovative products.”
In addition to a changing market, we could also be set to see CBD products used in even more innovative ways.
“We expect to see a multi-use CBD trend,” says Anne Wiziack, Marketing and PR Executive at Orange County CBD. “We have seen many chefs using CBD extract or CBD infused oil in their recipes, also in drinks. Once the FSA allows us to launch new edible products, the CBD infused food and beverage sector will certainly experience a boom in the market.
“In the US, we have seen a big growth in CBD products for pets, which in the UK is still a restricted market. However, we hope that in the next few years this will change here and become a mainstream trend for supporting pets with alternative treatments for pain and anxiety.”
If the CBD market becomes subject to better regulation here in the UK, perhaps CBD products for pets and other unique solutions will become a reality sooner rather than later. Regardless, these appear to be fascinating times for one of the world’s fastest growing industries.