Add CategoryHemp-derived CBD is also on the rise, expected to grow at a CAGR of 23.4 per cent post-pandemic due to increasing demand from the pharmaceutical sector.
As governments slowly relax laws around cannabidiol and hemp, more and more companies, big and small, are tapping into this emerging market.
Cannabidiol v hemp: what’s the difference?
There is sometimes confusion among consumers about the safety and legality of products such as hemp and cannabidiol.
Hemp is a cannabis plant that contains 0.3 per cent or less tetrahydrocannabinol (THC) which is the main psychoactive ingredient of cannabis. It has been found to have analgesic, anti-inflammatory and antioxidant properties. CBD is the other main cannabinoid found in the plant, and it is believed to have an anti-psychoactive effect and the ability to help reduce anxiety.
Hemp goes mainstream
Since changes to the Food Standards Code in late 2017, permitting the sale of low-psychoactive hemp seed as a food in Australia, the ingredient has become a popular addition to products across food, beverage, skincare, petcare and more.
Convenience store chain 7-Eleven has recognised this growing trend. Earlier this year, the retailer introduced Australian Primary Hemp’s (APH) Mt Elephant snack bars to its 720-plus Australian stores.
Annual sales of the product generated from 7-Eleven is expected to reach $1-1.4 million.
“The arrangement with 7-Eleven shows the mainstream appeal of our convenient plant-based snack bars and is a significant step forward in APH’s commercialisation and distribution plans,” said Neale Joseph, managing director and CEO at APH.
“We expect customers will enjoy the convenience of being able to purchase healthy, plant-based snacks from 7-Eleven’s extensive store network and experience the superfood benefits of hemp.”
Elixinol Wellness is a global leader in the hemp industry based in Sydney. The ASX-listed company markets and sells hemp-derived products and is the owner of Hemp Foods Australia, a leading hemp food wholesaler, retailer, manufacturer and exporter based near Byron Bay.
Oliver Horn, executive director and CEO of Elixinol Global, told Inside Retail that hemp is one of the most under-researched products and that it’s important to communicate the details of the product with consumers.
“Elixinol formulations are traceable and transparent, so consumers know exactly what they receive with each product. Our products undergo rigorous third-party independent laboratory testing to ensure the absence of microbiological contamination, heavy metals and pesticides, as well as the presence of Elixinol’s unique terpene profile,” he said.
Horn said consumers are constantly searching for new foods and supplements to incorporate into their diets and that interest in hemp will continue to grow.
“We are working with our manufacturing partners to constantly develop new products, and this tends to come initially at a cost premium. This is normal with innovation but ensures that we meet the constantly changing consumer needs,” he said.
Petcare market
Hemp is becoming increasingly popular in the pet food category as it’s believed to help alleviate anxiety.
According to the 2020 Pet Industry Green Paper, jointly published by NielsenIQ and Headset, 24 per cent of pet owners use hemp-CBD either for themselves, their pets or both.
“Understanding the dynamics at play in the cannabis space and their impact on the pet industry is critical. Despite open questions around regulations, hemp-CBD is exploding in the pet space,” said Maria Lange, vice president of strategic initiatives at Nielsen.
Kieren Anderson, hemp category manager of pet products distributor Number1 Australia, told Inside Retail that Australia’s pet parents have welcomed hemp “with open arms”.
“Hemp is an amazing plant, with such a short period of maturity, it could easily replace many products in the market as an environmentally friendly alternative,” Anderson said.
“Hemp seed oil is considered safer for your pets than even fish oil, as hemp seed oil doesn’t use any heating to process, so it is a more stable product. When compared to other products out there on the market, we know for a fact our product is safe, tried and tested and is made from 100 per cent natural ingredients.”
He said the product is becoming increasingly popular in the US and Europe for humans and pets alike.
“We are leading the charge in Australia pioneering our product and making this amazing product available to the everyday consumer. This is something that for the past 80 years has been impossible due to propaganda and archaic laws disallowing everyday [citizens] the right to [access this] wonderful plant,” he said.
Cannabidiol products
Currently, CBD products are not permitted for general sale in Australia, but consumers in Asia are starting to embrace this market. Altum International, a Perth-based distributor of CBD products for the retail, food, and beverage industry across the Asia Pacific, opened Hong Kong’s first dedicated CBD boutique and cafe last year.
Found cafe sells a range of CBD products such as oils, body balms, dog treats and pre-packaged food and drinks. Alongside a regular cafe menu, a range of CBD-infused food and drinks such as coffee, tea, chocolates and pastries, can be consumed on-site.
CBD is not listed as a dangerous drug in Hong Kong’s Dangerous Drugs Ordinance and can be legally bought and sold in pure form.
Australia is a long way off legalising cannabis for recreational use, and despite a referendum last year in neighbouring New Zealand, the Cannabis Legalisation and Control Bill was shot down, only just, by a 50.7 per cent majority.
But CBD products are beginning to become more accessible to consumers for health purposes.
In December, the Australian Therapeutic Goods Administration (TGA) permitted the sale of low-dose cannabidiol (CBD) products in pharmacies, opening up a market with an estimated worth of more than $200 million.
Professor Nicholas Lintzeris, an addiction medicine specialist and the lead author of the Cannabis as Medicine survey, said there have been favourable reports from consumers who have accessed legally prescribed medical cannabis products but that it’s still early days for the Australian medicinal cannabis system.
“There continues to be considerable demand for medical cannabis in Australia that has not been completely met by available models of prescription by medical practitioners. The uncertainties experienced by people in the community around the cannabis products they are accessing illegally is a concern,” said Lintzeris.
The study of 1388 Australians held from September 2018 to March 2019 was conducted by staff at the Discipline of Addiction Medicine and the Lambert Initiative for Cannabinoid Therapeutics at the University of Sydney.
Co-author and academic director of the Lambert Initiative professor Iain McGregor said more work needs to be done to advance the industry.
“We need to accelerate the pace of change through innovations such as over the counter access to CBD products and improved education and guidance for doctors and specialists in this area. Better quality evidence around medicinal cannabis effectiveness, particularly for conditions such as insomnia and depression, is also critical,” he said.