BRITISH CANNABIS®: 5 Years in the UK cannabis industry and what it has taught us - Tom Whettem

5 YEARS IN THE UK CANNABIS INDUSTRY AND WHAT IT HAS TAUGHT US.

by Tom Whettem

BRITISH CANNABIS® are exhibiting at the Hemp & CBD Expo: SPRING2020 event - Feb 29th & Mar 1st, 2020 at the Birmingham NEC.

As I sit down at our farm in Portugal on a Saturday morning, one thing that has not changed in the last 5 years is how busy we still are. It’s rare we get the opportunity to take a step back and realise what we have achieved. It’s been monumental, yet we can get consumed in the day to day running of the business and sometimes it’s easy to forget what we have done and how far we and the industry have come.

There is enough already to fill a novel, but being on this journey I can easily summarise some of the key milestones that has seen an industry blossom as a direct result of the levels of passion in the individuals that have populated it.

The early days

We entered the CBD industry in 2015 when there was not really an industry to talk about. You could fit all the companies currently trading, round a boardroom table and the general public hadn’t really heard of CBD.

We launched the Canabidol® range of CBD products and they were an instant success. We saw significant revenues from our primary channel which was Amazon, feedback on the products was unbelievable. I guess this was the first time we really comprehended the unquantifiable potential this product could have. Annual Sales on Amazon were in excess of £1 million after 3 months of trading and we took advantage of the uncompetitive organic search opportunity. We were ranking number 1 for all the top search terms. We also started to get the product into retail stores across the country.

Then came the first of many issues. As CBD products were not supported by Amazon, they closed our account overnight. We lost the biggest sales channel we had and were owed a 6-figure sum by Amazon which threatened our future. It took us 12 months and some costly legal bills to recover that money. While this was a major obstacle, we continued to build our direct sales and retail network of resellers.

Being cannabis, this industry was never going to be easy. There are so many issues we have with advertising, bank accounts, payment gateways, insurance… Losing the Amazon channel was a blow, but in business you can either moan that it’s not fair, or just get on with extracting the maximum potential from the landscape you’re working within.

These issues went on to be the biggest factor in who did and who did not succeed in this industry. Anyone can moan but only true entrepreneurs would still be here in years to come. The moaning has been a big factor over the years and I guess it comes from many inexperienced business people in the industry. I have been there and done that, moaning never helps. Following through on an opportunity is the only route to success that no one will challenge.

Into 2016, we then saw the biggest threat we have seen to the industry. The MHRA made a public statement that CBD was considered a medicine and would require appropriate licencing to be sold. It was this that united the blooming industry and kick started the growth we see today. This was the first time we thought this industry could be gone overnight. We, as established business operators had seen it before. Legislative or regulatory shift could literally stop us in our tracks. This led to the birth of the Cannabis Trades Association (CTA), which was the result of the largest CBD companies at the time getting together and discussing their options. The CTA was formed with the intention of representing the industry to the government regulators. If we didn’t stand up to the regulators, we didn’t stand a chance.

Let me tell you, they aren’t as scary as you would think. This has been demonstrated meeting after meeting as we hold the wealth of knowledge and an understanding that allows us to guide and direct regulatory change. This, without doubt makes a difference.

Anyone who was at that initial meeting with the MHRA will agree, we knew history was being made. This was the first indication that this cannabis sector could represent itself in a profession manner and be respected. It was the start of a long lasting and mutually beneficial relationship the CTA has with the MHRA. I guess the important point we saw coming out of this meeting was the informal agreement of a suggested 200mg daily limit on CBD in foods would be respected. Below 200mg a day would be fine in foods, above 200mg would be considered a medicinal dosage. This is a limit that we have seen adopted now by the industry as a whole. It’s referenced time and time again. It was a sensible threshold that has no determination in law, but has been adopted and accepted by the regulators and the industry moving forwards. This was a change, a benchmark and an achievement. While we did not change the law, we arrived at an understanding that allowed the uninhibited growth of the industry without threat from the regulators. We left the meeting with assurances that keeping to this limit and not making medical claims would allow us to continue without interference from the MHRA.

I have continued to see the CTA perform a vital role in this industry. It provided the backbone needed to get us from those early days to today and beyond. Recently we have seen the whole issue of novel foods come to the forefront after overshadowing the whole of 2019. Assurances have been gained regarding this issue by the CTA as we enter the new year, through its interactions with the Food Safety Authority (FSA).

Following a CTA meeting with the FSA in November last year, where the CTA raised the subject of any public safety risk underpinning the allocation of resources to the enforcement of novel foods provisions, a statement has been received confirming that

“The FSA has no current plans to immediately withdraw CBD products from the shelves but retains the right to change this stance if new evidence is produced that concludes CBD is not safe, or for any other relevant reason”

This also confirms that after assessing the safety concerns around CBD, they currently have no evidence that is unsafe. The Chief Executive of the FSA confirmed this in his report on 21st January 2020 in saying that

“We have not been made aware of any safety incidents relating to CBD products on the market, so we are not planning to insist on an immediate removal of the products from shelves.”

The issue of novel foods has always been one of confidence. While it seems that the technical aspect of whether CBD extracts are novel or not will continue, the risk of enforcement is now unlikely given the statement by the Chief Executive of the FSA.

Yes I am biased towards the CTA. We founded the association and have seen first hand what has been achieved. However, between you and me, I know that without the CTA or its scrutiny of the FSA process, the unquestionable unknown that has inhibited growth would not have been addressed. As far as I’m concerned, the FSA have now conformed that no action will take place unless new evidence comes to light that CBD is unsafe. Highly unlikely and just another example of what the CTA does behind closed doors.

Personally, I have been sat in meetings discussing the matter of novel foods with the FSA, European Food Safety Authority (EFSA), the Commission’s Directorate General for Health and Food Safety (DG SANTE) and the whole novel foods group covering Europe and their interpreters. The process has covered many years with some frustrations but in 20 years of business, I have not experienced government influence on this level. They don’t understand it, we do. That’s where we play to our advantage.

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British Cannabis were Awards winners at the September '19 Hemp & CBD Expo