Holland & Barrett shop
CBD Goes from Unknown to Taking United Kingdom by Storm; Europe is Next
On a stone-paved, tourist-packed lane in Bath, England, Harry Johnstone does his best to field a series of questions about the effects and use of cannabidiol (CBD) in the popular Holland & Barrett shop where he works.
In the shop window, a leafy green display reads “Our CBD range has grown,” while inside a familiar image of a hemp leaf tops a sizable display of lotions, supplements, and creams that include cannabidiol, a non-intoxicating cannabinoid compound in cannabis.
CBD’s popularity at Holland & Barrett, a chain of health food shops throughout the United Kingdom that offers drops, creams, supplements, and other CBD-infused product,s is just one example of CBD’s growing influence in the U.K. and beyond. Experts are preparing for rapid international growth to continue. A recent study released by the Brightfield Group, a Chicago-based marketing firm, estimated the European CBD market was valued at $318 million, in 2018 and estimated an astonishing 400% growth through 2023.
The company said the U.K. is leading that trend in Europe, with a market near 61.366 million pounds, or $80 million in U.S. dollars in 2018. On streets and in shopping areas around England, CBD ads appear in display windows and on the shelves, along with a variety of hemp products.
Cannabidiol can be extracted from marijuana or hemp, which is bred to be low in intoxicating THC. Once an obscure portion of the complicated chemistry of the cannabis plant, CBD is at the centre of an explosion of consumer interest.
Just don’t ask store staff what CBD does.
Benefits Aren’t Touted
Johnstone says there is little he can say about the products containing CBD or their use.
“It’s a very new product,” he said. “A lot of people do seem to be buying it. My mom uses it for foot pain.”
Prices range from ￡4.99 to 29.99 pounds for the creams, oils, and supplements, about US$7 to $39.
Johnstone said he can’t say much about CBD, only describe how other customers have used it. The packaging does not make any claims about the effectiveness or medicinal properties, and marketing materials are restricted to a vague statement that the product may improve health and wellbeing.
“I think that’s perfectly correct, to be honest,” said Peter Reynolds, president of CLEAR Cannabis Law Reform, a group seeking to end cannabis prohibition in the U.K. Just as in the United States, where the Food and Drug Administration (FDA) has yet to evaluate many of the properties of CBD, neither have British medical authorities answered the same questions.
Studies have indicated there may be extensive medicinal benefits from CBD as an anti-inflammatory, a pain reliever, and potential seizure suppressant. There are promising signs it can reduce anxiety. But Reynolds said it is important that governments properly regulate medicines to ensure consumers know the effects and benefits of anything taken as a remedy.
“That’s something that the CBD industry has had some trouble getting grips with. There are a lot of cowboy operations, a lot of fraudsters making the most outlandish medical claims. If we want the industry to be around in the long term we have to be responsible,” Reynolds said.
He sees enormous potential in that long term, as more people become aware of the benefits of cannabinoids.
Stores in the United Kingdom may now offer products containing hemp-derived CBD, under rules similar to many states in the USA. Products include liquids for use in vaping. (Photo by Bill Barlow)
Many point to a high profile case during the summer of 2018 as a turning point both for British law and public attitudes toward CBD and other cannabis-derived medicines. Billy Caldwell, a 13-year-old from County Tyrone in Northern Ireland, has a severe form of epilepsy. News reports in the U.K. say he was the first child to be prescribed medicinal cannabis oil. The treatment was said to be successful and he went 300 days without a seizure until the Home Office ended the prescription.
His mother, Charlotte, flew with him to Canada for supply of cannabis oil, only to have it seized at customs as she returned home.
“That created a huge media splash,” said Hannah Hetzer, the senior international policy manager for the New York-based Drug Policy Alliance (DPA). She said the case drew sympathy from across the British political spectrum, including from some who had previously been inimical to loosening cannabis restrictions.
“It pushed the government to start to move on cannabis reform. It definitely opened the debate,” Hetzer said.
According to Reynolds, the market was non-existent in 2012 and rapidly grew to a £50 million-a-year industry, about US$66.2 million.
An important factor in that future, as Reynolds sees it, will be educating medical professionals about the uses of CBD.
“I’m delighted by how far these reforms have gone. The law has been taken out of the equation,” Reynolds said. The problem now is the medical profession tends to be ignorant of or even hostile to any consideration of benefits from cannabis-related products.
Growing Vape Market
At the House of Vapes on the High Street in the Shoreditch section of East London, staff member Kris O’Brien is happy to talk about the dizzying variety of products containing CBD, including hemp flower with little to no THC. The cost for the hemp flowers is 40 pounds for four grams, about US$53.
On a quiet morning, O’Brien fiddled with his vape pen while discussing how CBD products, a portion of the vape market he said was close to invisible a couple of years ago, now make up a major portion of the shop’s offerings.
Most vape shops in the U.K. offer CBD in several forms, such as e-liquids and drops from Marie Jeanne and Aztec CDB, crystals from Harmony, oils, and flowers including several strains like “Sour Diesel” and “Hawaiian Haze,” with 3.9% CBD and less than 0.17% THC. There are also offers CBD-infused edibles including hard candy with 5 mg CBD concentration. There are House of Vapes shops scattered throughout London, but the Shoreditch outpost also offers coffees and a comfortable lounge area. O’Brien, who said he finds the CBD vapes calming, suggests that his customers start with a low concentration as they figure out what dose is right for them.
The House of Vapes shop in the Shoreditch section of London offers a number of CBD products in a range of flavors.
As the shop began offering CBD products, he said, some customers were skeptical. The products contain a negligible amount of THC if any at all, he said.
Full Legalization May be Years Away
Reynolds, of CLEAR, said his organization also is pushing for reform of the U.K.’s marijuana laws, but for now, the ongoing and intractable fight over Brexit seems to have taken all of the air out of the room.
“That just overwhelms everything,” Reynolds said. “British politics is absolutely paralyzed by that.”
Yet he sees a growing movement toward legalization in the U.K. and elsewhere in the world, as other nations look to Canada’s experiences. According to Reynolds, about 75% of the British public supports making cannabis available for medical use, with about half in favor of some degree of reform of drug laws related to cannabis. He said he dislikes the term “recreational use.”
Little is likely to happen as long as Theresa May remains Prime Minister. May has seen a series of setbacks over Brexit, with her deal for withdrawal from the European Union rejected by Parliament.
“The prime minister is a staunch, old fashioned prohibitionist. Once she’s gone, and it can’t be long now, I think we’ll see real movement toward drug policy reform,” said Reynolds.
ISO-SPORT today announced the launch of its products with Holland & Barrett International (“Holland & Barrett”), beginning with an initial order of ten SKUs of hemp-extract based cannabidiol (CBD) products from the Company’s RapidCBD™ and Iso-Sport™ brand catalogues for more than US$1 million.
The launch has commenced online and more than 45,000 units are expected to be available in up to 800 Holland & Barrett stores by the end of March 2019 throughout the United Kingdom and the Republic of Ireland. Holland & Barrett is the largest health and wellness retailer in Europe, operating more than 1,300 stores, 10 million customer loyalty program members, and US$800 million in annual revenues.
The RapidCBD™ and Iso-Sport™ food supplement and cosmetic skin care products contain Isodiol’s proprietary ISO99™ hemp extract and botanical blends that work synergistically to provide positive health and wellness benefits to the body and mind. All of the products in Isodiol’s program for Holland & Barrett are specially formulated for the U.K. and E.U. markets.
“This is a great deal for both Holland & Barrett and Isodiol, and we could not be more pleased with the great people at Holland & Barrett who embarked on this months-long journey with us,” said Isodiol’s Chief Executive Officer, Marcos Agramont. “Isodiol has been the pioneer of many firsts in the hemp-based consumer packaged goods (CPG) industry. This one is special because it provides equal access to quality CBD products for an entire demographic of consumers who have a pre-existing relationship with a trusted vendor.”
“Gaining a foothold in the European market and getting Isodiol products on the shelves of such a respected retailer is a significant milestone in the Company’s development,” said Isodiol’s VP of Business Development, Graham Boylan. “Although the U.K. and E.U. markets are highly regulated, the opportunities to provide Isodiol’s pioneering hemp-based consumer packaged goods (CPG) to a new and growing CBD market outweigh those challenges. Holland & Barrett has led the way in selling CBD in the U.K., and we look forward to providing additional first-to-market U.K.- and E.U.- compliant CBD product offerings in the near future, to ensure that together we remain ahead of the pack.”
This announcement comes on the heels of Isodiol’s announcement of its partnership with the Asian American Trade Associations Council (AATAC) for the Company’s convenience store (C-Store) retail program into an initial 1,250 locations in the United States, with expansion plans of up to 10,000 additional locations. The Company will launch its Fast CBD Relief™ brand from the CBD Naturals® brands portfolio as its flagship cannabinoid (CBD) products in its C-Store program.
ISODIOL is focused on the nutritional health benefits that are derived from hemp and is a product development, sales, marketing and distribution company of hemp-based Consumer Packaged Goods (CPG) and solutions. Isodiol has commercialized a 99%+ pure, naturally isolated CBD, including micro-encapsulations, and nano-technology for quality consumable and topical skin care products. The Company received approval for its CBD as an Active Pharmaceutical Ingredient (API) for use in Finished Pharmaceutical Products (FPPs), as was announced on April 26, 2018. Isodiol’s growth strategy includes the development of over-the-counter and pharmaceutical drugs and continued international expansion into Latin America, Asia, and Europe through the proliferation of its various brands, including the recently acquired CBDNATURALS portfolio of brands and proprietary technologies.
About Holland & Barrett International
Holland & Barrett is one of the world’s leading health and wellness retailers and the largest in Europe, supplying its customers with a wide range of vitamins, minerals, health supplements, specialist foods, and natural beauty products. With over 145 years of experience in the industry, Holland & Barrett’s name is a familiar sight in almost every major city and town across the United Kingdom and is becoming increasingly more visible further afield, in markets as diverse as the Netherlands and Malta to the United Arab Emirates, China, and India. Standard stores vary in size averaging at 1,100 sq ft, with smaller standard shops selling core traditional products across the supplements, fruit, nuts, and seeds categories, while larger stores have a more extensive range of health foods, including frozen, chilled, and sports nutrition, alongside a wide range of natural beauty products available on the high street.
Isodiol International: A CBD Company to be Watching
One of the most exciting trends in the cannabis industry has been the increasing demand for cannabidiol (CBD) products. During the last few years, this trend has been gaining considerable traction and we believe the CBD opportunity is reaching an inflection point.
CBD is breaking into the mainstream market and this is a trend that investors need to be watching.
We have been closely following the CBD industry and have been bullish on the growth prospects associated with this opportunity. During the last year, there has been a significant increase in the number of companies focused on this burgeoning opportunity and this is something we have been watching. It is important for investors to focus on CBD companies that are gaining market share and advancing operations.
Isodiol International (ISOL.CN) (ISOLF) is a CBD company that we have been closely following and believe that this is an opportunity to be watching. The company has been laser focused on the CBD market and is led by a management team with a proven track record of success. Isodiol is a company that has been in the middle of a major transition and has significant catalysts for growth.
The CBD company is in the middle of a major strategy change and we believe that these changes are significant. Earlier this year, the company announced plans to refocus its business strategy on core competencies and key market segments. Isodiol has been executing on a strategy that will streamline its business, reduce shareholder dilution, and cut costs while taking advantage of significant new opportunities.
Going forward, Isodiol plans to focus on three primary strategic pillars: technology, branding, and retail. The company plans to divest of its cultivation and non-specialty manufacturing operations, which represents a significant strategy shift. We are favorable on Isodiol’s refined focus and will monitor how the team continues to execute.
Selling BSPG for $14 Million While Retaining Certain Rights
Earlier this month, Isodiol reported a significant divestment and announced the sale of its wholly owned subsidiary, BSPG Laboratories Ltd. (BSPG) to a U.K. based private equity group for US$14,000,000 in cash installments. BSPG has played a major role in the company’s overall story, especially with how it pertains to the future of API CBD for clinical applications and future pharmaceutical products.
One of the reasons why we are favorable on this transaction pertains to Isodiol securing an off-take supply agreement with the buyer to ensure continued distribution of its Purodiol and Isodiolex products. This divesture will provide Isodiol with enough supply to fulfill its production needs for Purodiol and Isodiolex and clinical research projects at a below market cost. The sale also provides the company with the ability to scale alongside BSPG’s expansion, without having to raise additional capital.
In late March, Isodiol receive the first $5 million installment and the second $5 million installment is due in late June. A third installment of $2 million is due and late September and the final $2 million installment will be payable upon the expansion of BSPG’s production capacity into its newly leased 20,000 sq. ft. laboratory facility. The growth prospects associated with the new facility are significant and it is expected to increase BSPG’s capacity by 8-10 times.
A Transition to be Watching
Although there has been a significant strategy change, Isodiol will continue to focus its resources on the United States as well as on other emerging markets, such as the United Kingdom and Mexico, for the commercialization of consumer goods made with CBD and other hemp-derived ingredients.
We are favorable on the change in strategy and believe that the new focus will benefit Isodiol shareholders. As legalization and acceptance of CBD accelerates at a rapid pace globally, the demand for CBD products is exploding. Isodiol is well positioned to capitalize on this, has conducted major research on CBD and has invested in technologies to extract and isolate CBD and other cannabinoids for use in prescription and consumer health products.
For the past several years, Isodiol has been quietly building a platform to capitalize on this opportunity which it has recently unveiled. The company is an early mover in the CBD market and this is just starting to pay off. Isodiol has several catalysts for growth and this is an opportunity that we are monitoring closely.