Launching CBD products in the UK: Q&A with Deepak Anand, CEO of Materia Ventures

(This story has been corrected to clarify that non-tobacco CBD vape products sold in the UK do not need to adhere to the Tobacco Products Directorate (TPD). According to the UK government, products that do not contain nicotine and 0% nicotine e-liquids are out of scope of the TPD; such products are regulated by the UK’s General Product Safety Regulations 2005.)

The UK market for cannabidiol products has piqued the interest of hemp cultivators and manufacturers based on its current demand and future prospects.

Nearly one in 10 adults surveyed in the UK have tried CBD, and more than a quarter of those who have never used CBD products said they would consider it, according to a YouGov survey conducted last August.

The market for CBD products is expected to be just under £1 billion ($1.2 billion) in 2025, according to an analysis conducted by the Centre for Medicinal Cannabis, putting CBD in line with the entire 2016 UK herbal supplement market.

Businesses looking to sell their products in the UK need to follow specific regulations depending on the kind of CBD product offered. But at least one third-party study has suggested that regulatory gaps on cannabinoid supply chains and testing methodologies in the UK has yielded unreliable quality in CBD products.

Earlier this month, medical cannabis company Materia Ventures of Toronto joined the fray of companies entering the UK cannbidiol market when it announced the launch of the Hiatus line of hemp-derived CBD vape pens. The pens contain 150 milligrams of CBD isolate combined with natural terpenes.

Hemp Industry Daily spoke with Materia Ventures CEO Deepak Anand to get his insights on best practices for entering the UK market.

In announcing the Hiatus launch, you said that consumers have been “placing their trust in companies that compromise on safety and quality” in the UK. You’ve also said that Materia is launching the first vape pen on the UK market that is a “high quality” product. What did you mean?

A lot of the research on the UK market led us to the conclusion that … there wasn’t a lot sophistication.

There are some other CBD vape products that are available in the market that are of inferior quality and are certainly not compliant in terms of a variety of regulations, and I’m talking beyond just vapes.

What have you learned about the regulations that companies need to adhere to, in order to enter the CBD market in the UK?

So there are three broad forms of CBD products: topicals, ingestibles and vapes.

The first one, cosmetics – those would be the topical products – require a CPSR (Cosmetic Product Safety Report), which is governed by the European Union.

The vape products need to adhere to the General Product Safety Regulations 2005.

The ingestible products fall under (EU) novel food regulations and those most recently issued by the FSA (Food Standards Agency).

What we are seeing are more companies submitting applications for novel food authorizations. A lot of companies want to start applying for those. Stores like Boots and Harrods are already carrying CBD products, and if those manufactures and retailers want to remain on the shelves, they have to submit their applications by March 2021.

There certainly are a number of CBD products that are not compliant with any of these regulations.

Do you have plans to expand to the ingestibles market in the UK?

This is the first product we’re going to be launching on the CBD side. We are intending to get into the cosmetics side as well as the ingestibles side – we have not submitted a novel food authorization application yet, but we intend to – probably in the next few months. It’s a very comprehensive application.

Where do you source the CBD for the Hiatus vape product line?

The CBD for this particular product line comes from the U.S., though a lot of CBD in the UK is sourced from mainland Europe, especially eastern countries.

What advantages do you think the UK market offers over the U.S. market for CBD businesses?

There is clarity, and certainty on how products will be regulated at the highest level of government, so it’s unlike the U.S., where the FDA is in the middle of a very long process in deciding its approach.

Additionally, many major UK retailers are already stocking a variety of CBD products and some have even set up sections in their stores specifically for this new category.

What are some hurdles you faced in entering the UK market?

The market is still nascent enough that there are all types of players, so it can take real effort to discern who’s serious and who’s not.

We’ve had to be selective in whom we partner with, but the indirect implication for everyone is that businesses offering ancillary services to the industry – from banking to warehousing – are also cautious, which can mean things take longer than usual to set up.

Do you have any advice for companies looking to expand their offerings to the CBD space?

Definitely focus on the regulations and understand in particular how the (FSA) novel foods ruling will change the landscape, and how to plan for it.

Also don’t underestimate the value of having partners on the ground who understand the consumer and have strong relationships with retailers.

This interview has been edited for length and clarity.

Monica Raymunt can be reached at [email protected]

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