Hong Kong’s CBD industry faces extinction as government clamps down | Business and economy

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Hong Kong, China – Like most people in Hong Kong, when Covid-19 hit the city in early 2020, Cheryl found herself spending most of her time in her tiny apartment.

Not long ago, the 23-year-old media worker was plagued by anxiety and depression.

Cheryl, who asked to be known only by her first name, told Al Jazeera: “I didn’t have physical education at the time, and I had a lot of things to worry about when I stayed at home.”

After learning about cannabidiol (CBD) during a research project at university, Sherrill ordered a tincture from an online store that sells products with important health benefits, including stress and anxiety relief.

“I started using CBD tincture,” she said. “My thoughts were like a storm crashing over me, but suddenly it calmed down.”

CBD is a compound found in cannabis and does not contain THC, the psychoactive ingredient that is the mainstay of the drug.

In Hong Kong, CBD has been legally sold in the form of oil, tinctures, and food and beverages among mushroom-related businesses in recent years.

Cheryl is a regular user of CBD, spending several hundred dollars every month to improve her mood.

CBD users like Sherrill, however, may soon be forced to find other outlets for their concerns as the Chinese-led city looks set to ban the compound earlier this year.

CBD products
CBD is sold legally in Hong Kong in the form of oil, tincture, and food and drink. [Courtesy of Altum International]

In June, the Hong Kong government, which is nominally semi-autonomous from mainland China, unveiled a bill banning the manufacture, import, export, sale and possession of CBD products. .

The bill comes after Beijing announced a ban on cosmetics containing CBD last year.

The bill has little chance of becoming law after Beijing’s electoral reforms last year effectively killed all political opposition in Hong Kong’s legislature.

Hong Kong authorities have argued that CBD can degrade into THC under “normal storage conditions” and could be a gateway for young people to take illegal drugs.

More than one-third of the 4,000 CBD samples tested contained traces of THC, officials said.

Meanwhile, the use of illegal drugs is spreading in the city, officials said.

In the year Between 2020 and 2021, the number of known cannabis offenders in Hong Kong increased by a third, while the number of people under the age of 21 increased by almost 50 percent, according to police statistics.

Hong Kong has strict drug laws, with up to seven years in prison for possession and life in prison for manufacturing and trafficking.

Loss of business

In addition to putting consumers on notice, Hong Kong’s ban, which allows anyone in possession of CBD for three months to dispose of the product, spelled the death knell for the city’s once-thriving CBD business ecosystem.

In the year After making headlines with its launch in 2020, the city’s first CBD cafe is now planning to close shop in October.

Fiachra Mullen, marketing officer at Altem International, the fund’s owner, told Al Jazeera: “The proposed ban will unfortunately result in the closure of the retail store and cafe.”

“Altum will focus on our other core markets of Australia and New Zealand.”

Mullen said the cafe is in high demand in Hong Kong, where business has grown 20-fold since its opening.

Office worker Morgan tried CBD for the first time in 2020 when it started to rise in popularity.

“I was putting CBD drops in my drinks. After that, I started using CBD vape to replace my poor nicotine habits… I felt calmer, my anxiety was relieved,” Morgan, who asked to use only her first name, told Al Jazeera.

Although Morgan is no longer a frequent CBD user, she doesn’t understand the reason for the ban.

“Why take something that helps people feel better emotionally and mentally?”

CBD business owners say the government’s claims about their products are irrelevant and insist they can guarantee anything they sell is THC-free.

“I will send the raw materials. [of my CBD products] I go to the UK and Japan for a total check and my products are 100 percent THC free,” David Lau, an online seller of CBD products, told Al Jazeera.

Lau started the business after a friend told him that CBD helped ease his depression and anxiety. He started selling CBD vaping cartridges, but after the government banned vaping products, he switched to CBD oil and gummies. Before the ban was announced, Lau had hoped to open a physical store, but is now considering moving the business elsewhere.

Mullen, a distributor for Found Market, said his company “can guarantee a completely THC-free product because there is no cannabis or hemp in the production process.”

CBD oil
Experts say more research is needed to investigate the effects of CBD products [Courtesy of Altum International]

Although many studies suggest that CBD can help with mental health conditions such as anxiety, experts say more research is needed to examine its effects.

Fung Sai-fu, a lecturer in the Department of Social and Behavioral Sciences at the City University of Hong Kong, said evidence on CBD’s benefits is lacking.

“The current ban on CBD for research and medical use will not affect research related to the use of cannabis compounds and CBD medicinal products. But for consumer or recreational use of cannabidiol, there is no clear scientific evidence to support CBD with its advertised health benefits,” Fung told Al Jazeera.

Fung said some studies show CBD users experience side effects such as sleep problems.

“Some medical experts have warned that CBD can interfere with the action of other drugs and become contaminated,” he said.

For CBD users like Cheryl, arguments about possible risks or side effects hold little water.

“He [the proposed ban] It doesn’t make sense… We should be able to make our own decisions when we grow up,” she said. “Why isn’t smoking banned, but CBD? If they want to ban CBD, they should also ban cigarettes.

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