The U.K.’s taxpayer-backed British Business Bank’s Future Fund, set up by the government to provide loans to startups during the pandemic, announced additional investments in 75 companies on Thursday. With the startup loans converting into shares, the U.K. government became a shareholder in a medical cannabis oil company, along with a yogurt bar business, a London-based craft brewery, drone maker and more.
The fund was originally pitched to provide government support to innovative companies that needed financial assistance throughout the pandemic. Now, it has equity stakes in 335 businesses, according to a Guardian report. The program ended up making 1.14 billion pounds, or $1.43 billion, of convertible loans to 1,190 companies, according to Bloomberg.
“The Future Fund was created to increase the flow of capital to companies at the height of the pandemic, while ensuring long-term value for the UK taxpayer,” said Ken Cooper, the managing director of venture solutions at British Business Bank. “We’re delighted to see this flow of companies going on to raise further private sector capital. As a shareholder in these businesses, the Future Fund is well positioned to share in the benefits of continued growth.”
This latest investment round included Grass & Co., a mail-order CBD company founded by brothers Ben and Tom Grass in 2019. The CBD products are stocked in stores including Selfridges and Boots.
“Our award-winning CBD+ formulations are rooted in botanical and vitamin-packed blends that deliver health benefits and the most deliciously smooth flavours,” the Grass & Co. website states. “We only use the best-of-the-best sustainable CBD and natural botanical ingredients for a better night and day.”
Also on Thursday, the U.K. Food Standards Agency (FSA) preliminarily approved an additional 2,445 CBD products, bringing the total number of products that still have a chance for full authorization to 6,000, according to a Hemp Today report. There are approximately 543 companies listed by the FSA.
While the original deadline for applications was March 31, 2021, the agency reopened the window for companies to apply for authorization of CBD products in April.
“Over 1,700 new products added to the list relate to applications which had been submitted to the FSA prior to the 31 March (2021) deadline, but which required further evidence from businesses to ensure the products met the public list criteria before they could be added,” the agency said. “Around 700 products have been added to correct a clerical error.”
Cannabis is still illegal to possess, distribute, sell or grow in the U.K. However, changes to the Misuse of Drugs Regulations in November 2018 now allow medicinal cannabis to be prescribed under certain circumstances.
CBD is conversely legal to purchase, possess and use in the U.K. as long as it has either no THC or a low-THC content under 0.2%. The U.K. legalized CBD and several closely–related cannabinoids, with certain conditions, in 2018.
The country also became the first in the world to regulate the publicat sale of orally-administered, legal cannabinoids, serving to “de-risk” CBD for investors and continue growing the CBD market.
Steve Moore, founder of U.K.-based trade group the Association for the Cannabinoid Industry, spoke more about the potential for the CBD market in the future as the U.K. works to open the doors for CBD producers, retailers and consumers.
“It’s an important milestone, and there’s a group of companies now that can [work further] on their product portfolios,” Moore said. “I think the peak year for innovation will be end-2023, early 2024 [as full regulatory clearance kicks in] and then we’ll see the entry of the big FMCG companies as well.”
