NZ’s 2bn dollar CBD opportunity: Cannabis referendum result risks stalling conversation over supplements

By Tingmin Koe

- Last updated on GMT

The referendum results in New Zealand showed that over half (53.1%) of the population did not support the proposed Cannabis Legalisation and Control Bill. ©Getty Images
The referendum results in New Zealand showed that over half (53.1%) of the population did not support the proposed Cannabis Legalisation and Control Bill. ©Getty Images

Related tags New zealand Cbd Hemp

The New Zealand Hemp Industry Association (NZHIA) believes that the country “will miss the bus” if it does not start to quickly develop its cannabidiol (CBD) sector, after a new report suggesting it could become an NZD2bn industry was quickly followed by a ‘no’ vote in the country’s referendum on legalising cannabis.

New Zealand last week released preliminary referendum results​, showing that over half (53.1%) did not support the proposed Cannabis Legalisation and Control Bill.

The bill covered how cannabis could be produced, supplied, or consumed. For instance, it will set up a licensing system under which all cannabis related businesses must hold a licence and control the potency and contents of licensed cannabis products.

The official referendum results will be out on this Friday (Nov 6).

At present, nutraceuticals containing CBD from the hemp plant are banned in New Zealand, but such products can be accessed via cross-border e-commerce.

Medical cannabis, however, has been made legal since April this year. It is legal to cultivate and manufacture medical cannabis that contain less than 2% tetrahydrocannabinol (THC) in the formulation.

Speaking to NutraIngedients-Asia ​after the release of the referendum’s preliminary results, NZHIA chair, Richard Barge, said a ‘yes’ vote would have allowed the conversation around the developing of a CBD nutraceuticals industry to happen.

“It hasn’t been helped by a ‘no’ vote because a ‘yes’ vote will allow a conversation, a forum, to occur,”​ he said.

He said it was still the industry’s imperative to educate consumers on the health benefits of CBD, since the cannabis plant was largely associated with a negative image.

“It will be about the industry educating the consumers, and consumers to apply pressure on the MPs to allow CBD to be used in more than just medical products.

“It still needs to be addressed and the process and body of work to allow CBD in medicinal doses to be made available or allowed to be sold over the counter, that work still needs to be done.

“We will miss the bus if we don’t start working with this ingredient (CBD),” ​he said.

On the referendum results, he believes that a key reason is due to the negative image that cannabis is associated with and the lack of understanding of its health benefits.  

“People are affected by the buy over of marijuana as weed and are probably not aware of its benefits,”​ he said, adding that some might not have fully understood the significance and implications of the referendum.

A billion-dollar CBD industry?

A recent report has highlighted how a more relaxed set of regulations towards hemp and CBD could yield earnings of NZD$2bn (US$1.3bn) by 2030.

At present, hemp functional foods that do not contain CBD are available online, in supermarkets and health food chains within the country. Key local players include Hemp NZ and The Brothers Green. 

Titled “NZ Hemp Export Driven Investor Report”, the report​ was commissioned by the NZHIA and funded by the Agricultural and Marketing Research and Development Trust.  

The report forecasted that a regulatory reform permitting nutraceuticals containing CBD, terpenes, and flavonoids could yield earnings of NZD$1.5bn (US$1bn), as well as 20,000 new jobs.

Including hemp seeds and fibre products, the total earnings from the sector could hit $2bn (US$1.33bn) by 2030.

Ways to grow the hemp product category in New Zealand include marketing premium, quality CBD products and hemp oils into export markets, as well as offering products that include other cannabinoids, the report suggested.

On the global scale, the hemp industry is projected to grow from USD$4.6bn last year to US$64.8bn by 2030, at a CAGR of 34%.

The fastest growth in the last five years had been seen in medicinal cannabis and use in oils, capsules, tinctures, and teas.

Currently, the top hemp-producing countries are China, Canada, USA, France, Chile, and North Korea.

In the case of US, 15 states have allowed the sale of CBD oil and low THC products for medical use.

“We are well behind other countries in our attitude to hemp,”​ said Barge.

“Although it is non-psychoactive, many of our current laws treat it as though it is…All we need is for the government to remove unwarranted regulatory barriers and red tape.”

Science-based approach

The association has urged the government to adopt a science-based approach for the manufacture, sale, import, and export of non-medicine hemp products.

Referencing existing scientific studies, the commissioned report highlighted how CBD could help with managing seizures, inflammation, inflammatory bowel disease, and mental disorders.

A science-based approach will lead to “a rapid upsurge in research and development,” ​Barge said.

The NZHIA is also advocating for the reclassification of CBD as a narcotic substance. Based on the commissioned report, cannabis as a narcotic should be narrowly defined in relation to THC, in line with recommendations from the World Health Organisation.

Another suggestion from the report included differentiating between medicinal cannabis containing THC and therapeutic products containing CBD, with the latter made available as an OTC product. 

“Many commentators, including business analysts and stakeholders in the industrial hemp industry, have noted that the industry in New Zealand will grow substantially if a regulatory framework is put in place which enables the manufacture, sales, import, and export of non-medicine hemp products containing CBD,”​ said the report.

Australia’s importance

Australia’s recent moves to downschedule CBD​ and its implications to Trans-Tasman relationship were cited as the other push factor for a CBD regulatory reform in New Zealand.

Under the Trans-Tasman relationship, various standards, including food standards, are harmonised across Australia and New Zealand.

“CBD should not be placed under international drug control.

“This is of particular interest to New Zealand given our Trans-Tasman relationship and the harmonisation of various standards including food standards relationship,” ​said the report.

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