How to start a CBD oil business in the UK
Written by Ian Jones
The UK CBD industry is growing at a phenomenal rate. This useful substance – just one of the dozens of different cannabinoids in the cannabis plant – has seen a dramatic rise over recent years. Surveys conducted in May and June 2019 by Dynata and YouGov indicate that between 8- 11% of UK adults respectively – approximately 4-6 million people – have tried CBD.
Not only this, market research commissioned by the Centre for Medicinal Cannabis (CMC) currently values the CBD market at £300m a year and if growth continues at the current rate, they claim it will be worth almost £1bn per year by the year 2025 – the equivalent of the entire UK herbal supplement market today. This is a 45% growth rate, which compares to soft drinks at just 3%, and tobacco at a mere 1.2%.
With these astronomical figures being floated, it’s little wonder that many entrepreneurs and business people are looking to make inroads to the potentially fertile UK CBD market. But it isn’t as simple as registering a website and selling products. The CBD industry is a difficult nut to crack – not only from a regulatory point of view but when it comes to gaining the consumer’s trust as well as knowing the particulars about this complex substance.
Here are some of the key factors to be aware of before setting up a CBD business in the UK.
CBD is subject to many regulations. It is legal in the UK, but the wider picture is more complicated. Licences for CBD oil as a medicine have not been granted yet, and so manufacturers cannot make claims about their alleged medical benefits.
This means if you’re selling CBD products you cannot make any health claims and must abide by the MHRA guidelines. It is fine to discuss CBD in terms of wellness, but not in terms of medical effectiveness. Considering this is precisely the reason most people turn to CBD, it makes marketing these products very tricky.
Layton Brooks, the director of CBD Shopy, an online CBD store and reviews source, stresses the importance of being aware of the problems of setting up a business framework based around CBD.
He said: “The regulatory ‘grey area’ around CBD and the close association to cannabis make setting up a CBD business harder than it should be. Simple things, like setting up a business bank account or signing up to an email platform, are more complex when the nature of your business is discovered. Stay patient and search for the right partners to work with.”
Nothing says untrustworthy more than using garish weed-related imagery. Whether you’re designing a website or packaging, make sure to treat CBD in a respectful, mature manner.
As said previously about the legal status of CBD, any attempts to link it to illicit drug use will make future stringent restrictions all the more likely. At the other end of the scale, don’t make your designs look too medical. CBD is a wellness product and should be treated as such.
Believe In The Product
It’s fairly easy to distinguish people looking to make a quick profit from those who have a passion for CBD. The latter usually have a personal investment in CBD, whether it has been useful for themselves or a family member, or if they have a genuine belief that the product can help people.
When choosing somewhere to buy CBD or learn more about it, the consumer will naturally be drawn to those with honourable intentions.
Be Aware (And Beware) Of THC
There are legal limits on the amount of THC in CBD products – currently set at 0.2% – but this is further complicated by a limit of 1mg of THC per container or bottle, no matter what size.
To further confuse matters, the National Pharmacy Association (NPA) released a document in July 2019 stating that the Home Office had informed them that any amount of THC in a CBD product, even trace amounts, would classify it as a Schedule 1 Controlled Drug – severely restricting the sale of full-spectrum CBD products. Many commentators in the CBD industry disputed the legality of this statement, and the NPA has since removed the statement from their website, but this demonstrates the lack of consistency when it comes to the legal status of CBD in the UK, in regards to THC.
Customer Service Is Key
The restrictions on giving specific health advice mean word-of-mouth is more important than ever in the world of CBD. If CBD has helped someone with an ailment, they’ll be much more likely to leave positive reviews online on highly visible sites like Facebook and Trustpilot.
They’ll be much more likely to do so if you treat them with respect and respond to their comments and questions quickly and clearly, while being careful to avoid falling foul of the MHRA guidelines. Good customer service shows you care about the product and are keen to help people.
Don’t Cut Corners
If you’re producing and selling CBD products, you should take great care to source the finest quality raw materials and make sure any products are made in high-quality professional laboratories. Organic hemp is always best, to avoid introducing contaminants such as heavy metals to the end product; while using a single strain of hemp means the content of your CBD products will be reliable across products and over time.
Any products, such as balms and CBD e-liquids, should be made in clean conditions in ISO-certified labs. Most importantly, lab results should be available for each product – these show the exact percentages of various cannabinoids in the item, showing the THC amount lies within legal limits and that there is a lack of contaminants.
Work With Trade Organisations
As the CBD is a relatively new and fast-moving industry in the UK, a number of trade bodies have emerged to establish a framework of ‘best practice’ among their members. Chief among these is the Cannabis Trades Association (CTA), a non-profit organisation dedicated to supporting CBD, cannabis and hemp businesses in the UK, with over 900 registered members. They can help you get your CBD business off the ground while staying within the legal guidelines and producing high-quality, safe products and information.