JERSEY Hemp has closed and laid off two-thirds of its workforce after being told by the Home Office that its CBD products are illegal – despite other unregulated brands of cannabis-based wellbeing goods from China and elsewhere remaining on sale in the UK.
As a result of the unexpected ruling by civil servants in Whitehall, Jersey’s government has enforced a restriction that prohibits the company exporting to the rest of Britain, depriving it of 90% of its market.
Announcing the closure, Jersey Hemp director Craig Dempster said that they had been hung out to dry by the UK and Jersey governments, adding that their products had satisfied every requirement to be imported and sold legally in the UK under exemptions in drug laws.
He added that after millions of pounds worth of investment, much of it from local backers, and a bright plan for the future, the company was simply unable to stay open because it had been denied access to its largest market.
As a result, eight people have lost their jobs and its sales and growing operations have ceased.
Mr Dempster said the company had just agreed the rollout of its products in Tesco supermarkets across Britain and was seeking further investment to continue growing.
Jersey Hemp’s CBD oils were also well on the way to gaining UK Food Standards Agency approval as a ‘novel food’, which has fuelled the frustration and anger among the company’s directors and investors because, they argue, two arms of the UK government are taking contradictory positions.
Lawyers for Jersey Hemp are now challenging both the Home Office and the Jersey government, and questioning why Island ministers were not supporting a Jersey business that was delivering essential diversity and environmental sustainability to the economy.
The company is also considering suing both governments as it stands to lose millions.
Mr Dempster said that politicians had fallen over themselves to be seen to support Jersey Hemp at election time and when they saw value in doing so, but had rolled over and parroted the UK line despite knowing that the Home Office was wrong.
He added that they should have pushed for a period’s grace to look at the evidence and resolve the issues proportionately, but instead rubber-stamped mistakes made in London.
At the heart of their anger is the fact, they say, that Jersey Hemp has been singled out by the Home Office despite it being the only licensed producer of CBD products in Britain.
Mr Dempster explained that no action had been taken against other CBD producers, many operating without any regulatory regime in places such as China, and that no other products had been taken off the shelves and branded illegal – despite falling foul of the same points that the Home Office has used to justify its position in relation to Jersey Hemp.
At the heart of the argument is whether Jersey Hemp’s CBD products meet the three-part test to be exempted from laws controlling the sale of illegal drugs. CBD products are subject to the law because they contain trace amounts of THC, the active and banned ingredient in cannabis.
The three limbs are that the products are not ‘designed for administration of the controlled drug to a human or animal’; the products are presented for sale in a way in which the controlled drug element (THC) cannot be readily extracted so as to constitute a risk to health, and that no single product can contain more than 1mg of THC.
Mr Dempster claimed that the Home Office initially said that their products contravened the third limb, but had actually misread the data supplied by an independent and licensed third-party tester. Despite acknowledging their mistake, he said, they then argued that it did not comply with the first limb because it contained THC.
He explained that the contradiction was maddening because limb three accepted that there would be trace amounts of THC in all CBD products and sought to regulate the amount, but they were now being told that it was banned because it contained THC, even though that level was proven to be within legal parameters.
‘The more you understand it, the more ridiculous it becomes,’ he added. ‘Why are we being singled out despite going through every regulatory hoop to be the best product on the market? They are targeting us because we are regulated. It is clearly unfair and if this decision is upheld it would mean that every product on sale in the UK is illegal. It’s the blind leading the blind.’
It is not the first time that the company has felt seriously let down by the Island’s government. While seeking further investment in the business a couple of years ago, the directors learned in the JEP about government plans to turn their site off Grande Route de St Jean into a park. ‘No one had even told us,’ he said. ‘The timing could not have been worse.’
David Ryan and Blair Jones, co-founders of Jersey Hemp, said they were ‘profoundly disappointed’ with the UK Home Office’s position declaring their products illegal.
In a statement, they said: ‘We highlighted the rigorous and costly process they have undergone, in collaboration with the UK FSA, to obtain novel foods approval as part of an accreditation programme.
‘We emphasised the growing market for CBD products in the UK, available through numerous leading retailers and supermarkets. We questioned the rationale behind the UK Home Office’s stance, asserting that if CBD were truly illegal, its sale would be prevented.’
