Overview of the CBD oil market in the UK going into 2022

By any measure, the CBD oil market is growing rapidly in the United Kingdom.

According to the Centre for Medicinal Cannabis (CMC), the industry was expected to bring £690 million in 2021, blowing well past estimates made two years earlier.

So, will the UK CBD market continue its momentum, or do dangers lie ahead? In this report, we'll analyse the current state of the market and look ahead to 2022.

What is the current state of the CBD oil market?

These days, consumers can purchase everything from CBD oil tinctures to CBD gummy bears from chemist shops, health food stores, and online dispensaries.

And business, as they say, is booming. According to Alphagreen.io, an online CBD marketplace that sells exclusively to British buyers, more than eight million people bought CBD in 2020, with total sales totalling £150 million.

But wait, that's not quite accurate – actually, they brought in £150 million in the first four months of that year.

So, to better serve these customers, hundreds of CBD businesses have opened their doors. And while not all companies have hit it big, others have seen an explosion in their revenue. Take Orange County CBD, for example: founded in 2019, 2020 saw a 1,400% increase in total sales.

However, not everything is coming up roses. Before 2018, CBD oil wasn't even legal, and after legalization, threadbare regulations quickly led to problems. For instance, in late 2019, some products were found to contain levels of THC – the psychoactive compound found in cannabis – that were above prescribed limits.

As a result, tightening regulations have led to problems in the CBD industry. For example, in 2021, the government required any CBD product that came to market after 13th February 2020 to cease sale pending successful completion of a novel foods application to the FSA.

As a result, only 22 CBD brands were still on sale as of April 2021, and over 400 were stuck in limbo. Whilst the FSA is expected to get through the backlog by summer 2022, it has led to shortages on high street and internet shelves (such as those listed on https://cbdoilguides.co.uk).

What are the key drivers of CBD oil growth?

Before we discuss what 2022 has in store for the UK CBD oil industry, let's examine how we got to where we are. How did CBD oil in the UK become so popular, so fast?

Of all the reasons cited, the ongoing pandemic is one of the biggest. During the initial Covid lockdown, people were bored, anxieties were running high, and incidences of depression increased.

It was during this time that CBD oil sales growth exploded. As noted in the last section, CBD oil retailers brought in over 150 million GBP in the first four months of 2020.

With increased mental health issues and traditional therapy being inaccessible, British consumers reached for CBD tinctures en masse.

Of course, this explosion in interest would not have happened were it not for a growing body of CBD research. In many of these papers, researchers appear to have established a positive correlation between CBD usage and improvements in worry, blue moods, and discomfort.

Because of this, people have become increasingly comfortable with the idea of using CBD oil to self-medicate. Even before the pandemic, sales in the sector were robust; according to Nate Erskine, an analyst at CBD-Intel, CBD product sales totalled £290 million in 2019.

In addition to this, we see a period of regulatory stability ahead. With more companies becoming more clear on the rules, these firms will spend less attention on compliance and more on education, brand building, and marketing. Moreover, innovative banking solutions will emerge to further streamline financial processes and enhance customer experiences.

What is the size of the CBD oil market in the UK? 

So, there's no question that CBD oil is trendy in the UK, but exactly how is the market doing these days?

Currently, industry analysts estimate that the annual value of the UK CBD industry currently sits around £700 million. And by 2025, they expect that number to surpass one billion GBP. 

Put into perspective, Britons spent £119 million on vitamin C in 2020 – that's less than half of that year's CBD product receipts.

Who are some of the key players in the UK CBD oil market?

As the CBD oil market has exploded, an increasing number of businesses have entered the fray. Currently, several hundred brands are in the game, but many make less than £1 million in revenues.

However, a few have managed to corner a large slice of the market. Leading the pack is Holland and Barrett, which sells over 150 CBD products in its shops nationwide. This number includes its house brand, which includes CBD bath salts.

Then, there’s GW Pharmaceuticals. Acquired by Jazz Pharmaceuticals in 2020 for £5.3 billion, this British biopharmaceutical company pioneered the development of Epidiolex, a drug that uses phytocannabinoids to calm seizures.

And of course, Canopy Growth – a Canadian cannabis company that is one of the world’s biggest – also has a sizable slice of the UK CBD pie. In this country, they own its largest hemp producer, Spectrum Biomedical. 

This firm is best known for its medical grade cannabis, which it sells in the UK and legal markets worldwide.

What should we expect in 2022?

After a year of rapid growth in 2020, CBD producers faced stiff regulatory headwinds in 2021. However, as we move through 2022, we're optimistic that things will get better.

For instance, if regulators stay on task, hundreds of brands are set to be freed from CBD purgatory by this summer. Doing this could clear up existing shortages, significantly increase consumer options, and encourage competition among existing market players.

In addition to this, we see a period of regulatory stability ahead. With more companies becoming more clear on the rules, these firms will spend less attention on compliance and more on education, brand-building, and marketing.

Lastly, we predict that the CBD oil market in the UK will track with global trends. This means tastes will move away from traditional consumption methods (e.g., tinctures, hemp flower) and more towards products like vape pens, edibles, and topicals.

CBD oil is here to stay

Even with regulatory challenges, CBD oil isn't going anywhere. The product has demonstrated too much value for consumers and businesses alike for it to ever disappear.

Looking ahead, we expect the market in the UK – and around the world – to continue growing at a rapid pace. With increased competition, more innovation, and better products for consumers, it appears the future is bright for this neophyte industry.