Hong Kong’s CBD industry faces wipeout as government ban looms

Hong Kong, China – Like most people in Hong Kong, Cheryl found herself spending a lot of time in a tiny apartment when COVID-19 first struck the city in early 2020.

Before long, the 23-year-old media worker felt overwhelmed with anxiety and depression.

“I didn’t have in-person classes at the time, and it was easy to have anxious thoughts when you stayed at home a lot,” Cheryl, who asked to be referred to by her first name only, told Al Jazeera.

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

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

CBD is a compound found in cannabis that does not contain THC, the psychoactive ingredient responsible for the drug’s high.

In Hong Kong, CBD has been sold legally in the form of oils, tinctures, and food and drinks amid a mushrooming of related businesses in recent years.

Cheryl is now a regular user of CBD, spending several hundred Hong Kong dollars each month on products to improve her mood.

CBD users like Cheryl, however, may soon be forced to find other outlets for their stress as the Chinese-ruled city looks to ban the compound as early as this year.

In June, the Hong Kong government, which is nominally semi-autonomous from mainland China under a system known as “one country, two systems”, unveiled a draft bill to ban the manufacturing, import, export, sale, and possession of CBD products.

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

After a Beijing-decreed electoral overhaul last year effectively wiped out all political opposition in Hong Kong’s legislature, there is little chance of the bill not becoming law.

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

Authorities also say that more than one-third of some 4,000 CBD samples tested contained traces of THC.

Meanwhile, officials say illegal drug use is becoming more prevalent in the city.

The number of known cannabis abusers in Hong Kong grew by one-third between 2020 and 2021, with the number of those aged below 21 rising by nearly 50 percent, according to police statistics.

Hong Kong has strict anti-drug laws, with penalties of up to seven years in jail for possession and life imprisonment for manufacturing and trafficking.

Business wipeout

Besides putting consumers on notice, Hong Kong’s proposed ban, which would give anyone in possession of CBD three months to dispose of the product, has sounded the death knell for the city’s once-thriving ecosystem of CBD businesses.

After making headlines with its launch in 2020, the city’s first CBD café, Found, now plans to shut up shop in October.

“The proposed ban would unfortunately result in the retail store and café closing,” Fiachra Mullen, chief marketing officer for Altum International, Found’s owner, told Al Jazeera.

“Altum will be focusing on our other primary markets of Australia and New Zealand.”

Mullen said the cafe had catered to a vigorous demand in Hong Kong, with business growing about 20-fold since its opening.

Office worker Morgan first tried CBD as it began to take off in popularity in 2020.

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

Morgan said while she is no longer a frequent CBD user, she cannot understand the rationale for a ban.

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

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

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

Lau started his business after his friend reported that CBD had eased his depression and anxiety. He began selling CBD vaping cartridges, but switched to CBD oil and gummies after the government banned vaping products. Before the announcement of the ban, Lau had been hoping to open a physical store, but is now considering moving his business somewhere else.

Mullen, the marketer for Found, said his company could “effectively guarantee a fully THC-free product at the point of production as there is no cannabis or hemp involved in the production process”.

Although several studies suggested CBD may help with mental health conditions such as anxiety, experts say more research is needed to examine its effects.

Fung Sai-fu, an instructor at the department of social and behavioural sciences at the City University of Hong Kong, said evidence is lacking for CBD’s supposed benefits.

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

Fung also said some studies have shown CBD users experiencing side effects, such as sleep problems.

“Some medical experts also warned that CBD may interfere with the functioning of other medications and may be contaminated,” he said.

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

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