Proposed changes to the UK's late-payment rules could have significant commercial implications for businesses across the cannabis, cannabinoid, CBD, hemp and medicinal cannabis supply chains.

The Commercial Payments Bill is progressing through Parliament with measures designed to restrict lengthy payment terms, make statutory interest on late payments mandatory and give the Small Business Commissioner stronger powers to tackle poor payment practices.

For cannabis-sector businesses, the significance is commercial rather than regulatory. Manufacturers, laboratories, distributors, professional service providers and other suppliers can incur substantial costs before their customers settle an invoice. Changes to payment terms could therefore affect working capital throughout the supply chain.

The Government says late payments cost the UK economy around £11 billion each year and are associated with 38 business closures every day.

Commercial Payments Bill moves through Parliament

The Commercial Payments Bill was introduced in the House of Lords on 19 May 2026. It completed Committee stage on 21 July and, as of 8 September, is scheduled to reach Report stage on 15 September 2026.

The Bill has not yet become law and may still be amended as it progresses through Parliament.

It follows a Government consultation on late and long business-to-business payment practices, which ran between July and October 2025 and received 867 responses.

What would the late payment reforms change?

One of the most significant proposals is a maximum payment period.

Under the current Bill, covered commercial contracts would generally be subject to a maximum payment term of 60 days where the purchaser is not a public authority, with limited exemptions. A 30-day maximum would apply where the purchaser is a public authority.

The Government also plans to make statutory interest on late payments mandatory at 8% above the Bank of England base rate.

Statutory interest is not new. Businesses can already claim interest at that rate on qualifying late commercial debts. However, under the existing regime, statutory interest may not apply where a contract provides a different substantial remedy for late payment.

The proposed reforms would make the statutory right harder to contract out of for qualifying agreements.

The Bill would also expand the role of the Small Business Commissioner, including powers to investigate persistent poor payment practices by larger businesses and adjudicate certain disputes between small suppliers and larger customers.

Why this matters to cannabis businesses

Payment terms can have an immediate effect on companies that need to fund production before receiving money from customers.

A cannabinoid business may have already paid for ingredients, manufacturing, laboratory testing, packaging, freight and warehousing before issuing an invoice. A delayed customer payment can leave less cash available for the next production run, payroll or payments to other suppliers.

That can be particularly important for smaller businesses operating within complex supply chains, where a payment delay from one customer can affect several businesses further upstream.

A hypothetical £30,000 cannabis-sector invoice

Consider a hypothetical UK cannabinoid supplier that delivers £30,000 of goods to a larger commercial customer.

The supplier has already incurred the costs of manufacturing, testing, packaging and delivery. The invoice reaches its agreed payment date, but the customer does not pay.

The supplier is now £30,000 short of the working capital it expected to have available. It may still need to place its next manufacturing order, pay laboratories and logistics providers, meet payroll or settle other business liabilities.

Under the proposed reforms, if the transaction falls within the legislation, the late payment would also attract mandatory statutory interest at 8% above the Bank of England base rate.

The example is hypothetical, but it demonstrates the commercial effect of late payment. The issue is not simply when income appears in the accounts, but whether the supplier has sufficient cash available to continue operating normally while it waits to be paid.

Purchasers may need to review their own systems

The reforms would also matter to cannabis businesses that buy goods and services from other companies.

Larger purchasers may need to review standard supplier contracts, invoice approval procedures, payment authorisations and the way disputes are raised.

The Bill also addresses payment disputes. The Government proposes that suppliers should be entitled to a fixed sum where purchasers raise disputes late or fail to provide sufficient information.

That would increase the importance of identifying genuine invoice problems quickly rather than allowing disputed payments to remain unresolved.

Businesses differ over the 60-day limit

The Government consultation found differing views according to business size.

Among respondents, 73% of microbusinesses and 70% of small businesses agreed that a 60-day maximum would be effective in tackling long payment periods.

Among large-business respondents, 44% agreed and 47% disagreed.

The figures illustrate the competing commercial interests behind the legislation. Shorter payment periods can strengthen supplier cash flow, while larger purchasers may need to adjust procurement systems and contractual arrangements built around longer payment cycles.

What happens next?

The Commercial Payments Bill must complete further Parliamentary stages before it can become law.

The Government has said businesses will receive an appropriate lead-in period before the new provisions come into force and that the measures are not intended to operate retrospectively.

Cannabis-sector businesses therefore do not need to treat the proposed rules as current law, but they may want to review how payment terms affect their existing commercial relationships.

Suppliers can assess how much working capital is tied up in outstanding invoices and whether extended payment terms expose the business to unnecessary risk. Purchasers can examine whether invoices and disputes are processed quickly enough to meet the direction of the proposed regime.

For an industry where manufacturing, testing, compliance and inventory costs can arise well before customer payment is received, the Commercial Payments Bill could make payment practices an increasingly important part of commercial risk management.

Sources

Department for Business and Trade, 24 March 2026 announcement
https://www.gov.uk/government/news/time-to-pay-up-government-unveils-toughest-crackdown-on-late-payments-in-over-25-years

Commercial Payments Bill overview and Government factsheet
https://www.gov.uk/government/publications/commercial-payments-bill-factsheets/commercial-payments-bill-overview

Commercial Payments Bill Parliamentary page
https://bills.parliament.uk/bills/4128

Commercial Payments Bill stages
https://bills.parliament.uk/bills/4128/stages

Current Bill text, as amended in Committee
https://bills.parliament.uk/publications/67434/documents/8668

Government response to late-payment consultation
https://www.gov.uk/government/consultations/late-payments-tackling-poor-payment-practices/outcome/late-payment-consultation-time-to-pay-up-government-response-web-version

Consultation data on the proposed 60-day maximum
https://www.gov.uk/government/consultations/late-payments-tackling-poor-payment-practices/outcome/late-payment-consultation-annex-2-agreement-with-60-day-maximum-payment-terms-by-business-size

Current GOV.UK guidance on statutory interest
https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt