What’s on the horizon for UK hemp?
The high value crop that has farmers, investors and consumers beginning to take notice
Hemp cultivation is embedded in UK history, with its fibres used to make sails and ropes for our sovereign ships since before the Elizabethan era. In fact, Henry VIII issued a royal decree in 1533 ordering every farmer in the country to set aside a quarter of an acre of land to cultivate hemp for every sixty acres under their control.
Although the UK is home to the largest CBD market in Europe, hemp is lamentably no longer a national staple crop. Under outmoded regulations, UK farmers are unable to harvest, process, transport or extract cannabinoids from the flowers and leaves of the hemp plant, which must be destroyed on site with no option for commercial use. Stalk fibres and seeds, where cannabinoids are far from abundant, are the only parts of the plant which are permitted for commercial use.
The UK has set the maximum THC content for hemp cultivars at 0.2%, whereas other countries have taken a more permissive approach. In Switzerland, Australia, Ecuador and Uruguay the plant can be classified as hemp if it contains up to 1% THC, associated with no psychoactive effect. Although higher than the UK’s criteria, the United States’ limit of 0.3% has faced lobbying due to being perceived as too restrictive. Cultivation is restricted to certain EU-certified cultivars which may not offer the best yield or optimal properties for the desired end use.
Hemp cultivation is treated with caution in the UK and licences are issued by the Home Office rather than the Department for Environment, Food & Rural Affairs (DEFRA), which manages most agricultural licences. According to FOI requests from the Conservative Drug Policy Reform Group, only 33 licences were issued for hemp cultivation in 2019, and DEFRA considers hemp to be a niche crop as so few farmers grow it. It is estimated that just 800 hectares of hemp is cultivated annually in the UK, compared to around 170,000 hectares apportioned for horticultural crops.
The current commercial uses of hemp involve producing oil from its seeds and using its fibres to make composites and other materials. Composites are an increasing area of interest since their inclusion in DEFRA’s 2004 report on industrial uses of hemp. Hemp provides an alternative to the single-use plastics and synthetic fibres that pollute our oceans, through biocomposites ranging from hempcrete to biodegradable plastics. This exceptionally versatile crop offers a multitude of environmental benefits, and has great potential for use as a phytoremediator, cleaning up soil and water contaminated with hazardous toxins. Hemp is carbon negative and its roots decompact the surrounding soil, improving the yield of subsequent crops.
How does the UK compare to other countries?
The current regulation of hemp prevents economic growth and limits commercial prospects for UK businesses. Hemp farmers in many other European nations have a significant advantage over UK farmers, as they are able to harvest, process and sell their flower as biomass for industrial purposes, including the extraction of CBD and other cannabinoids.
Steve Barron, the CEO of Margent Farm, a 53-acre hemp farm in Cambridgeshire, explains that:
“Times are difficult for farmers across the board. Last year we threw away £100,000 of CBD from a crop with a value of £20,000 on our small 53-acre farm. It helps nobody to do this – most of all the farmers. Imagine the opportunity for farmers and the treasury that larger farms across the country could offer.”
The UK consumer products sector is also impeded by national restrictions on extracting and manufacturing CBD from hemp flowers. CBD extracts and isolates must be sourced from outside the UK, which comes with significant costs, impacts on supply chain stability, and the increased environmental impact of international shipping.
The industry is calling for reform to allow the extraction of CBD from UK hemp and the wholesale of hemp flowers, providing a new revenue stream from biomass which is currently destroyed. The drug policy think tank Volteface has announced the launch of Pleasant Lands, a campaign to reform UK hemp policy highlighting opportunities for domestic extraction, formulation and ancillary industries. Liz McCulloch, Director at Volteface, explains:
"As the UK faces economic turmoil, Pleasant Lands has been launched to provide a much needed policy solution, allowing CBD extraction from hemp flower. Removing the outdated restriction that prevents British hemp farmers from using the most valuable of the crop would increase jobs, boost the economy and deliver sustainable recovery. This campaign will be the turning point for the UK hemp industry, from being a niche crop to its rightful place as a key player in the UK economy."
Hemp offers a multitude of opportunities outside of the CBD sector
Aside from the significant advancement to the CBD industry, hemp is a crop with varied applications and the potential to disrupt multiple industry sectors. HempFlax, Europe's largest industrial hemp cultivator and processor, has reported that less than half of its total revenue currently arises from its CBD business, with strong sales for industrial products and animal bedding.
As a crop for UK farmers, hemp is likely to be seen as an increasingly attractive option following the Agriculture Bill 2019-21, due to its impressive sustainability credentials. In April 2020, European Industrial Hemp Association released The Hemp Manifesto for a Green Recovery, highlighting the “huge potential of the European hemp sector in speeding up the transition towards a zero-emission bio-based and sustainable economy, in line with the European Green Deal”, while also calling for reform and synchronisation of hemp policy throughout Europe.
Hemp biocomposites offer robust and varied uses as building materials, acting as insulation and a substitute for fibreglass and cement. Currently, UK manufacturers of hemp biocomposites have to import some of these fibres due to a lack of domestic supply from limited national cultivation. Located on Margent Farm, ‘Flat House’ is an experimental carbon-zero property constructed using hemp fibres harvested from the first year’s crop, including corrugated wall panels and waterproof hempcrete. Steve Barron explains that:
“The advantages of hemp over other crops are numerous. Hemp is a sequester of carbon, a fantastic break crop for farmers, and a compactor of the soil. It could become one of the most profitable crops for UK farmers, and be deeply valuable to the health of our farmland, our countryside, our environment and our people.”
Flat House, Margent Farm
Hemp fibres can be processed into biodegradable bioplastics, offering a sustainable alternative to single-use plastics with studies showing a reduction of 30-80% in carbon dioxide (CO2) emissions compared to conventional plastics. Hemp can be also used to produce textiles for consumer and industrial products, ranging from clothing and shoes to ropes, canvas and nets. Bast Fibre Technologies recently raised C$4.5 million to produce non-woven textiles using naturally extracted fibres from hemp and other high-yield crops, for a range of disposable consumer products including sanitising wipes and diapers. Hemp can also be used to produce sustainable, environmentally-friendly paper ranging from cardboard and packaging to printing paper and newsprint.
Mainstream interest in this versatile crop is finally growing, with Savills property developer and our Crop17 partners publishing a new market report Spotlight: Hemp cultivation in the UK in February 2020. With both economic and environmental arguments overwhelmingly in its favour, it looks as though it is only a matter of time before policy is aligned to allow UK farmers and businesses to extract the full potential of this crop.
Hanway can support with hemp licensing and assessing the feasibility of a cultivation site for potential applicants, and offer commercial and strategic support to hemp businesses at all stages of operation. Get in touch at info@hanwayassociates.com to arrange a needs assessment.