Heading into 2023, Jersey Hemp was in a good place, according to director Craig Dempster. Having been established in 2017, two years later Jersey’s government awarded it the first licence to farm hemp for CBD production in the British Isles.
“A small group of us decided there was an opportunity in the marketplace for a British home-grown CBD product, and built the business up from a very small team up to more than a dozen full-time staff, with sometimes an additional 35 people during harvest times,” he said.
“We ended up with a multi-faceted, quite complex business – we were growing hemp around all parts of the Island, peaking at around 500 acres.”
Significant investment was a feature of the growth, including the acquisition of specialist equipment and development of the company’s headquarters at Warwick Farm in St Helier. And business was booming – products were stocked by Amazon and in 22 branches of Tesco, with another 700 Tesco stores about to come into scope as a result of a nationwide listing by the supermarket giant.
Having made sure it had met the necessary regulatory requirements, in spring 2023 Jersey Hemp applied for an additional licence to grow different strains of hemp. This required a “full-blown” cannabis licence, a series of measures including secure growing areas and enhanced fencing and a site visit by the UK Home Office’s firearms and licensing unit.
“We were assuming it was a relatively straightforward compliance visit. We had a good idea of what was required, and it turned out we’d actually met those criteria,” Mr Dempster recalled. “And then towards the end of the meeting, a senior member of the Home Office delegation told us that she did not think that our products were compliant, and that, in her opinion, we could no longer export them to the UK – it came out the blue, to be honest.”
The company took legal advice and was reassured that its operations were satisfying the regulatory requirements. There was a positive endorsement by one British body, the Food Standards Agency, but at the same time another UK institution – the Home Office – was doubling down on its objections.
Mr Dempster described the impact of the Home Office verdict as “pretty devastating and instantaneous”.
“We were literally looking down the barrel of a gun thinking about how we were going to survive this, how this was terminal for the business,” he said.
An estimated 95% of the company’s revenue stopped overnight, with Jersey’s government falling in line with the UK and banning exports, while stock in UK depots had to be recovered.
“What didn’t stop overnight was our costs and our expense base,” Mr Dempster said. “So we were left in a position where, in 24 hours, all our revenue had ceased.
“We still had our full-time staff, commitments on leases for equipment, etcetera etcetera – all the costs that you would normally associate with a business.
“There was a period when we assumed that, to coin a phrase, an adult might come into the room and actually look at this and realise it really was a ridiculous situation, and say ‘let’s pause, let’s not put this restriction on your products, so you can carry on whilst we assess the legality of your position’ – if that had happened, it would have avoided the business, in effect, having to close down.”
Making all of his colleagues redundant, with a total of 18 employees losing their jobs, was arguably the toughest part of the process. Mr Dempster said: “It was pretty emotionally draining to be honest – making people redundant was a pretty horrendous experience.
“And all the time people would ask us what went wrong, and it was very difficult to explain to people in a logical context, because it was such an illogical chain of events – it was pretty heartbreaking. We had a lot of tears.”
Amid the darkness, there was a determination to try to overcome, with support from a major shareholder to turn the positive legal advice into a full-blown legal challenge.
An assessment of the likely cost of this action came up with a figure of £250,000.
“We were very fortunate. We had investors that were able to help us meet those legal bills, but it was very, very difficult – there was just me having to respond to some of the queries.”
Initially the indications were that the Home Office was going to fight its corner, but there was a significant breakthrough for Jersey Hemp when the company was granted leave to seek judicial review. Ultimately the UK department called off its fight at the 11th hour, issuing a belated admission that its action had been illegal after what Mr Dempster likened to a game of poker, for high stakes.
“We had to employ a King’s Council [lawyer] at one point – these guys are ridiculously expensive, but very good at their jobs.
“The Home Office had three KCs, as well as their internal legal department, so it really was a David and Goliath legal challenge,” he said.
“We were sitting there with three threes in our hand [the second-highest ranked hand in three-card poker, beaten only by a straight flush] – they were sitting there with ace high [one of the lowest-ranked hands] but they had a lot of chips, and their intent was to bluff us out, I believe, until we had no resources left, and we’d have to fold.”
The Home Office’s decision was greeted with relief at Warwick Farm, but it still left another battle as Jersey Hemp sought to gain financial compensation for the effects on its business.
“What the UK Home Office did was direct all those [legal] resources to defending the damages claim,” Mr Dempster said.
“We were basically down to this, just myself and the business. We’d sold quite a lot the equipment to raise funds and the business was a skeleton of its original form.
“We had half-a-million pounds of CBD flowers growing in greenhouses which was about to be harvest, and we had to demonstrate in granular detail what the whole process had cost us.
“They went through every element of our claim and challenged each element painfully; it was almost like being kicked in the stomach again after winning the legal challenge.”
It was agreed that a mediation process would take place, including the obligatory phalanx of high-earning lawyers.
“We negotiated to a point where we thought that was probably as far as we could push them, and we had a decision to make about whether we would accept the outcome of this mediation,” Mr Dempster explained.
“Our lawyers estimated that to get a court to sit down and assess our damages claim would have required another £750,000, as well as the £250,000 – to be frank, I don’t think we could have raised that money, because you’re asking people then to gamble.
“The offer that was on the table nowhere near compensated for even the investment in the business, let alone the opportunity that the business was just about to enjoy, so it was very difficult, but ultimately we really had to accept what was on the table.”
Mr Dempster was scathingly critical of Jersey’s government during 2023 and at the beginning of 2024, notably then Health Minister Karen Wilson, for what he described as “blindly following the lead of the Home Office”.
He said: “Even after all of this had transpired, we were yet to receive any direct communication from the people responsible in Jersey, despite the outcome – we’d faced illegal threats, with no public apology or accountability and the business remained non-operational at that point.
“It was only really when there was a change in government [at the end of January 2024] and Lyndon Farnham and Tom Binet came in as Chief Minister and Health Minister that we had a sea change in attitude and approach.
“They looked at how they may be able to support the business, how they may be able to, in some way, right some of the wrongs and it was very refreshing, based on previous experience, that we received a formal apology.”
After emerging on the other side of its legal battles, did Mr Dempster anticipate being able to relaunch Jersey Hemp?
“If you’d asked me at the start of this, I’d have said absolutely not, I don’t want to, I don’t think I thought we could have survived,” he said.
But the company worked with creditors to meet its obligations and gradually optimism grew about getting the show back on the road.
This week marks the culmination of the journey to resuming trading – a significant milestone, albeit operations will be very small-scale to begin with – and won’t come without some emotion.
Mr Dempster said: “It is very emotional – I didn’t think I’d see this day, although it’s important to put some context in [about] what we’re able to do and what we’re not able to do.
“We’ll start relatively gently, with a number of products, and we hope we can start to regain some of the ground that we had, but it will be quite a long journey – there’s no quick fix.”
As yet, the journey remains a solo affair for Mr Dempster – the Jersey Hemp band features just one man, and his dog.
“Anybody who’s been up to the farm will remember Buzz, my labrador, who was a fixture there – he’s the only colleague I’ve got at the moment, but I would imagine that we may look to employ some people part time, hopefully very soon,” he said.
“It’s going to be a slow build. We can’t run before we can walk and this experience has less left us all a little bit scarred, if I’m honest.
“But as we go forward and gain a little bit more confidence, I think we’ll slowly try to grow, and I’d love, one day, to be back to where we were: fields of Jersey being filled with hemp, and us processing that hemp – it was a wholesome, really good, positive business in every context.
“It would be a great story if we did eventually get back to where we were, and got back to producing on the scale that we were, and were something that hopefully not just us, but the Island, could be proud of – it’d be a dream to get back to where we were.”
