Intelligence

CBD Supply Chain: How Does It Actually Work?

To understand more about where your CBD comes from, it’s helpful to familiarise yourself with the CBD supply chain.

While it will differ depending on your provider, as some will do more in-house than others, there are several key steps that every CBD product should go through.

CBD products have been growing in popularity over the last few years. A report from Global Market Insights forecasts that the European CBD market could be worth $15.4bn by 2028.

Behind the scenes, a well-performing CBD supply chain is at the heart of this success story. This is how a supply chain for CBD works – it all starts with hemp from the Cannabis sativa plant.

1. Harvesting high-quality hemp

To grow industrial hemp in the UK, the provider must have an industrial hemp licence from the Home Office. 

Fibre and seeds with a THC content of 0.2% or lower can be cultivated. Meanwhile, the buds or flowers are illegal to possess or sell and must be destroyed – they contain too much THC.

We’ve previously written about how CBD flower is not legal in the UK if you want a more in-depth look at the rules and regulations.

THC is the cannabinoid present in the drug cannabis that is responsible for psychoactive effects. It’s a controlled substance in the UK under the Misuse of Drugs Act 1971.

Harvesting high-quality hemp is dependent on a wide range of factors including soil quality, time of year and use of fertilisers or pesticides.

2. Expert extraction

Extracting CBD from industrial hemp involves either carbon dioxide (CO2) or ethanol. 

This is usually done by a company which specialises in extraction.

If using pressurised CO2, it is called a supercritical extraction process because it first needs to be converted from a gas into a different state, acting as both a liquid and a gas.

Typically, this is the process used rather than one involving ethanol as there are many benefits. For example, it’s arguably a more efficient process. Also, for our Muslim readers, we’ve written about whether or not CBD oil is halal or haram when the extraction process involves ethanol.

3. Manufacturing

Time to get creative! The CBD manufacturer may specialise in one type of CBD product, or a wide range.

They could produce CBD oils – the most popular CBD product type in the UK – or gummies, teas, vapes, isolates, and cosmetics. There’s a wide range of possibilities since CBD is so versatile.

Manufacturers must take great care during production though – there’s a lot of hard work involved to make truly high-quality CBD products.

Man wrapping a box forming part of the CBD supply chain

4. Packaging, shipping and warehousing

We’re at the halfway point in our CBD supply chain, so now is a good time to talk about some other important parts of the overall process.

Depending on how many links there are in the chain, there will be plenty of need for careful packaging, shipping and warehousing between each step. Recently, we wrote about the best practices for how to store CBD oil – the importance of keeping it away from light, away from moisture and at low temperatures. That’s all true of packaging, shipping and warehousing too.

5. Trustworthy testing

It’s crucial that CBD products go through a comprehensive testing process. 

The most important criteria to test for is the presence of THC – only trace amounts should be present by this stage and Isolate products should have none at all.

ISO-accredited labs should have a detection limit of 0.01% for maximum accuracy, ensuring that any CBD product that goes to market has no more than 1 mg of THC per pack.

We’ve recently written about everything that can be detected by a reliable testing lab before a certificate of analysis is issued.

6. Novel food application

In the UK, CBD products require a validated novel food application from the Food Standards Agency (FSA) before they can go on sale.

This involves preparing a dossier of manufacturing and product information. Want to know more? We regularly update our comprehensive guide to CBD novel food applications.

7. Wholesale distribution

At this stage, a wholesale manufacturer can share their fully-tested products with brands. This is a key business-to-business (B2B) part of the supply chain for CBD.

Some of the things brands need to think about include how to communicate the potential benefits of their CBD products and develop strong relationships with their customers.Did you know that we offer a best-in-class white label service?

8. Selling CBD

This is the final part of the CBD supply chain, the business-to-consumer (B2C) element.

Whether it’s online or offline, through a brand’s own store or via another retailer, CBD products need to be straightforward to access. 

Quality is paramount, so detailed information should be provided to let consumers understand what’s in the product before purchasing. Retail stores will look for certain assurances when they stock other brands’ CBD products. So, read our blog to find out what retail stores want from your CBD product.

Crucial characteristics to look for in a CBD supply chain

These are some of the key traits you want to see in a CBD supply chain:

  • Transparency: Whether it’s about how low the THC content is in industrial hemp, or specific details in the novel food application and certificate of analysis. Accurate, up-to-date information without any gaps should be provided for everyone to see.  
  • Quality: Many CBD customers are interested in healthy living and wellness. They’ll only want to see the highest-quality ingredients in the products, with no unnecessary additions. Only source organic CBD from well-trusted sources.
  • Consistent supply: The wholesaler should have a proven track record of strong manufacturing capability and access to the required raw materials. Otherwise, their supply capabilities could suffer, they could take shortcuts or miss deadlines.

When too much control over the CBD supply chain is relinquished, that’s when things can go wrong for some providers – the reliability of their output is compromised.

Final thoughts – the CBD supply chain: how does it actually work?

We hope this article has provided a clear picture of how the CBD supply chain works. 

Whether you’re a consumer, or thinking about starting a CBD business in the UK, it’s worth thinking about and scrutinising. We’ve also prepared an in-depth article on what customers want from your CBD product. 

In terms of our CBD supply chain, we offer a well-controlled, global approach to procuring and developing raw materials. That means we can provide the very best quality products – please get in touch to find out more.

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