The most profitable (legal) businesses in the cannabis industry
Cannabis is coming out of the closet, faster in some countries than in others. In Spain, many cannabis businesses are still unregulated, but the knock-on effect of legalisation in other countries, and the big legalisation boom in the United States, has arrived here too.
Although almost everything in the Spanish cannabis industry is still unregulated, entrepreneurs are finding legal areas open to interpretation to position themselves in a market that promises to grow faster than the internet sector in the 1990s. And most of them have to do with CBD businesses in Spain: the non-psychoactive cannabinoid that is not controlled by the United Nations and that the WHO does not consider harmful to health.
With this in mind, what legal business can you set up in the cannabis industry in Spain without fear of legal action? Which are the most profitable? We answer.
Cosmetic products
Cannabis-derived cosmetic products are booming worldwide, and the wave has reached Spain too. It is a fairly safe business given the absence of controls on the cannabinoid used to make these cosmetics, CBD.
In Spain these CBD or hemp oil products can be sold without problems, provided they have been made in countries where the cultivation and extraction of cannabidiol is legal. Making creams in Spain with CBD grown and extracted in the country would be complicated, because the AEMPS only allows products to be made from the stalks and seeds of the plant, not the flowers. And in most cases, these new cannabis creams contain CBD extracted from the flowering part of the cannabis plant.
But CBD cosmetics produced in other countries can be sold without any problem. The legality of the free movement of CBD products between member states was confirmed in this ruling by the Court of Justice of the European Union in favour of a French company, which held that “a Member State may not prohibit the marketing of cannabidiol (CBD) lawfully produced in another Member State when it is extracted from the Cannabis sativa plant in its entirety and not solely from its fibre and seeds”.
The soothing and moisturising benefits of hemp oil and cannabidiol for the skin are winning loyal customers for these new cannabis-derived cosmetics. And, as we know, beauty product customers tend to stay loyal to a product that has convinced them and use the same brand almost for life. That is why the sector is so profitable.
Hemp food products
We have all seen that hemp seeds have become part of many people’s diets, attracted by the energy properties of this superfood. They can be found in all organic supermarkets and in most conventional hypermarkets. That is because they are the plant source richest in protein and amino acids available today. As seeds are an uncontrolled part of the plant, they can be legally sold for human consumption in Spain.
In the case of food products, the key to legality is that the source plant is hemp, not cannabis, and that the parts sold are seeds or stalks, which are the parts of the plant not controlled by the AEMPS. Do not confuse them with CBD foods or food supplements, because cannabidiol in Spain still cannot be sold for human consumption, as it is not classified either by the Spanish Agency of Medicines (AEMPS) or by the Spanish Food Safety Agency (AESAN), if we stick to its intake as a food supplement.
In addition, at EU level these products would also have to be registered with EFSA (the European Food Safety Authority), and these applications to the European Commission are being processed very slowly given the huge number of applications.
But apart from CBD supplements, hemp seeds or hemp oil are safe products for the growing public looking for natural, highly nutritious foods.
Ornamental hemp flowers
Hemp flowers or buds are one of the biggest attractions in today’s cannabis market. Countless online shops sell them and they have even reached tobacconists, leading many people to think that selling hemp or CBD buds for human consumption is legal, but that is not exactly the case.
Hemp buds can be sold as ornamental or aromatic flowers, but not for smoking. Selling the flowering part of the plant for human consumption, even if it is hemp and even if it has no THC (the most controlled cannabinoid), is not legal. There is no law, nor even any court ruling, stating that the cultivation and consumption of hemp or CBD flowers is legal.
Only the cultivation of hemp for industrial purposes is legal, in which case the stalks are used to make fibre, or for food use, in which case the seeds are used as food. But no law regulates growing hemp flowers for human use. That is why they are usually sold under the umbrella of decoration or aromatherapy, but not for consumption.
The reality, though, is that the lack of psychoactivity of this herb, which smells and tastes like weed but does not get you high, has attracted a new cannabis public and even changed the tastes of traditional cannabis consumers. The anti-inflammatory, neuroprotective and relaxing properties of CBD, among many others, have also attracted many people looking for natural remedies. But remember: however many advantages consuming hemp flowers may have, Spanish law has not yet regulated that human use.
Seed banks
Cannabis seed banks are very well-established businesses in Spain. In Europe they originated in the Netherlands, but in recent years seed bank businesses have become consolidated in Spain. In fact, one of the best-known seed banks in the world, Dinafem Seeds, is based in San Sebastián. Unfortunately, after 15 years in business, the company was raided by the Guardia Civil at the end of 2020, and its activity was halted. So are seed banks not legal?
Buying and selling cannabis seeds is permitted, as long as the seeds are sold as collectors’ items, and not for germination. In other words, selling them to grow cannabis plants and obtain THC buds is not allowed, which is why all cannabis seed banks say they sell to collectors. In addition, although selling them is allowed, producing them is not.
Other businesses
There are many businesses in the cannabis sector. Apart from those mentioned, there are large fertiliser and nutrient companies specialising in cannabis cultivation. There are also many businesses selling smoking paraphernalia (grinders, rolling papers or filter tips, among others). Another big business revolves around smoking pipes, especially glass ones, which are also regarded as decorative and collectable items.
