CBD in Switzerland: After the Boom and Saturation, a Flourishing Market

What is CBD? Who consumes it and how? Decrypting a product that has been established in Switzerland since 2017 and that is seducing more and more consumers.

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CBD in Switzerland: Booming but Cutthroat

In addition to the clichés usually associated with Switzerland, a somewhat sulfurous newcomer has taken up a lot of space in recent years. Since 2017, the cultivation and marketing of “light” cannabis, more generally known as CBD in reference to its main active ingredient, have been authorized in Switzerland. This means the production of cannabis with a THC content of no more than 1%. This legalization has multiplied supply and demand. From five producers in 2017, the number has increased to 630 in July 2018, according to the Federal Customs Administration.

Two years later, the market was saturated and the price per kilogram of CBD dropped drastically. From an average of 6,000 francs in 2017, it fell to 1,500 francs in 2019. As a result, maintaining a competitive CBD production has become increasingly difficult. Yet opinions are divided about its future. Collapse? Recovery? Diversification of supply? Not everything is decided and companies are working to develop new products or improve already known recipes, promoting the therapeutic properties of this substance and trying to ensure the sustainability of a still very young sector. Let’s take a look.

What is CBD?

CBD, or cannabidiol, is a substance extracted from the cultivated hemp plant or “Cannabis sativa”. It is one of about 100 cannabinoids found in cannabis. This acronym, although it refers to a molecule, is used to designate cannabis that can be legally produced and consumed. Less well known than its sulfurous cousin, THC, which also belongs to the cannabinoids, CBD burst into our everyday vocabulary in early 2017. This molecule has become very popular in Switzerland in recent years. In 2017, new legislation authorized the production and sale of “legal” cannabis, the consumption of which was intended to benefit from the effects of CBD. According to the Narcotics Law, this legal cannabis can be sold and consumed if it contains less than 1% THC.

In order for it to be marketed, numerous selections were made to isolate seeds that contained the least amount of THC and the highest amount of CBD. CBD and THC have exactly the same chemical composition, but their molecules are “arranged” differently. While THC is a psychoactive, euphoric substance, sometimes used as an analgesic, whose use is illegal and can lead to long-term consequences (irreversible IQ drop in teenagers), CBD has many therapeutic benefits and is not addictive.

Even if possession of fewer than 10 grams of cannabis with THC is authorized, its consumption remains illegal and can lead to a fine of around 100 francs for an adult. Thus, only cannabis with less than 1% THC can be sold and consumed legally in Switzerland.

On the administrative side, when a producer starts growing legal hemp, he is subject to self-monitoring and must provide the Federal Office of Public Health (FOPH) with a laboratory report attesting to a THC content of less than 1% in his plants.

How is it consumed?

CBD can be smoked, but many other forms of CBD have been created thanks to the extraction of this molecule from cannabis flowers. This extraction can be done in several ways, either via solvents that dissolve the target molecule and are then evaporated to leave only the CBD, or mechanically, by pressure. In this way, CBD can be isolated and incorporated into various consumer products.

What market for CBD?

Until 2019, the production of legal cannabis was subject to a tax by the Federal Customs Administration, as the product was considered a tobacco substitute. At the beginning of 2019, the tax was lifted, with the result that no figures are available for the CBD market. It is therefore difficult to determine an overall annual turnover for Switzerland. Loic Aubonney, from uWeed, explains that even when the tax existed, “it was only about flowers. Wellness products have accounted for the vast majority of the market growth over the last two years. Nevertheless, he believes that, based on the turnover of his company and the largest CBD players in Switzerland, the market generates “well over 100 million Swiss francs for our Swiss companies”. The CBD world is therefore far from collapsing and processed products have taken the lion’s share in recent years. Globally, CBD is expected to bring in 3.5 billion in 2021, and estimates point to 13.4 billion by 2028.

Cédric Rimella, co-founder of the Lausanne-based company Babylon Sciences, believes that even if the CBD market does not collapse, the sale of flowers may not survive in Switzerland. Countries such as Spain could come and overshadow the Swiss producers thanks to their much greater resources and surface areas. For him, the key lies in the processing of products. “It is difficult to obtain quality processed products abroad, whereas in Switzerland we are very good at it. Much better than in the production of raw materials like flowers. But what about market saturation? Is there not a risk of collapse with the multiplication of CBD producers? Cédric Rimella moderates and reminds us that a good number of them have broken their teeth by launching themselves a little too quickly into this new Eldorado. “It’s not an industry where there are only demigods of business. Many have forgotten that they have to pay taxes. They bought a car before they had to pay their social charges.

How is it grown?

As for outdoor cultivation, which suggests a higher production volume and therefore even more financial and logistical investment, it would be necessary to consider a hemp farm. And there is good news for those who would like to try the adventure. According to the Federal Office for Agriculture (FOAG), as of 1 January 2021, all restrictions related to the agricultural exploitation of hemp have been lifted, as long as it is not an activity aimed at selling cannabis as a narcotic. No prior authorization is required for this type of cultivation, although the FOAG still recommends that the authorities be notified. In 2019, the area devoted to hemp cultivation in Switzerland was 243 hectares. It should be noted, however, that, unlike other agricultural activities, hemp cultivation is not encouraged in Switzerland and therefore does not qualify for direct payments.

What about controls?

CBD production is not regulated in Switzerland. According to the FOPH, no authorization is required to cultivate legal cannabis. However, the placing on the market of a product considered as a tobacco substitute (and therefore intended to be smoked) must be notified to the FOPH, but no tax will be levied on it. Even if spontaneous interventions by the cantonal health authorities or chemists have taken place, there are no official steps to regulate the production of legal cannabis.
Moreover, as CBD has therapeutic benefits, Swissmedic will have the final say if a medicine containing CBD tries to make its way into pharmacies.

Who is using it?

Such a prolific market obviously cannot be created without customers. But who are they really?
According to a survey conducted jointly by the company uWeed and the Swiss Cannabis Industry Association, more than 30% are women and 41% have a university or college degree. Overall, CBD users are quite young, with 56% between 18 and 40 years old. 22% are over 50. In terms of products, flowers and oil are the most popular and most used by consumers, although it is possible to find them in the form of liquid for vaporizers, capsules or skin creams.

Animals are also in the game, as more and more cannabis products are being made for them.

Is CBD still a good idea?

As we have seen, in theory, anyone can start a CBD crop. That said, even if you’re feeling botanical, it’s a good idea to ask the right questions beforehand, especially about infrastructure. For example, if you want to obtain a finished product, grown at home, you will need to buy a grow tent, pots, an air extractor, a humidifier, a weather station, lamps, soil, and a fan. This list is not exhaustive, but it gives budding growers food for thought. In terms of surface area, according to Cédric Rimella, “for a viable operation, you need a minimum of 300 to 500 square meters. Below that, it’s just a sideline.

CBD, a miracle product?

According to online sales sites, CBD is to medicinal plants what bicarbonate of soda is to cleaning products. Anxiety, headaches, stress, depression, rheumatism, aches and pains, intestinal problems, it is used for everything. So is CBD really a miracle? Although there is not yet enough research on this subject to reach a scientific consensus, the research that has been published shows that the effects attributed to it are real. According to a study published in 2020 in Best Practice & Research: Clinical Anaesthesiology, a journal specializing in anesthesiology and pain management, the analgesic and de-stressing virtues attributed to CBD are scientifically founded. The icing on the cake is that it has almost no known side effects.

For Frank Zobel, a cannabis and CBD specialist at Addiction Switzerland, this is also very positive. “We’ve had a lot of people tell us that using CBD has made them feel better. For some people addicted to other products, CBD can even be useful to reduce their consumption. A study conducted by uWeed and the Swiss Cannabis Industry Association (CI Chanvre) found in August 2021 that 57% of respondents had experienced strong to very strong positive effects on their health. They used CBD to relax and sleep better or as an analgesic.

Swissmedic, for its part, has authorized the use of a CBD-based medicine, Epidyolex, since 10 February 2021, which can be prescribed as an additional treatment for children suffering from epilepsy.

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