Could New EU Rules Derail UK CBD Market Just As It’s Set To Take Off In The US?

Could New EU Rules Derail UK CBD Market

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Is CBD In The UK Under Threat?

A change by the European Union in the classification of food products containing cannabidiol (CBD) is being challenged by a UK legal partnership.

Industry chiefs are concerned that the regulation could negatively impact the thriving sector just as it looks to set to lift off in the US.

CBD oil in the UK

Reclassification Of Hemp Extracts

Robert Jappie, Head of Cannabis Law at Mackrell Turner Garrett and Queen’s Counsel Jonathan Kirk of Gough Square Chambers were in Brussels this week making representations to EFSA about the recent decision to reclassify hemp extracts as ‘novel’.

The challenge comes in the wake of talks on a similar theme entered into with Brussels by the European Industrial Hemp Association.

READ MORE: UK Rugby Superstars Enter The CBD Industry

What Is A Novel Food?

Under the Novel Food Regulations ((EU) 2015/2283) any product deemed as ‘novel’ must gain authorisation from the European Food Safety Authority (EFSA) before it can be sold as a foodstuff within the EU. The regulation could reverse a decision to allow CBD to be stocked on British shelves.

A foodstuff can be considered ‘novel’ if it was not consumed by humans to any significant degree prior to May 1997.

The law would cover food supplements, ingredients, and substances intended to be incorporated into food. In the case of CBD, this includes extracts, oils and other derived products that are intended for ingestion by humans.

CBD oil as a novel food

Potential Setback For The UK CBD Industry

The law would be a setback for the booming UK CBD industry as it will make it more difficult for products with CBD to go for sale in the EU market without pre-authorisation.

The EU categorisation for cannabinoids is as follows: “Extracts of Cannabis sativa L. and derived products containing cannabinoids are considered novel foods as a history of consumption has not been demonstrated. This applies to both the extracts themselves and any products to which they are added as an ingredient (such as hemp seed oil).”

Robert Jappie said that the growth of the UK’s CBD industry has been spectacular in the last three years, contributing in excess of £100 million per annum to the British economy.

Legalisation in Canada

Legislators in Europe risk being out of step in the development of the sector worldwide. The Financial Times reported on Tuesday that the sector is garnering more and more curiosity on Wall Street, following Canada’s decision to legalise recreational usage last year.

NYSE reported a 14 per cent rise in share price for Aurora, a Canadian cannabis producer, after billionaire Nelson Peltz opted to invest in it.

“The hiring of Mr Peltz — best known these days for his big stakes in Procter & Gamble and General Electric, two stalwarts of corporate America — is a sign of how “pot stocks” are catching on, as legal barriers fall away and as consumers show more interest in cannabis-derived products.”

 

Former White House Director Entering The Fray

Former Donald Trump White House Director of Communications Anthony Scaramucci is also getting in on the act, with his SkyBridge investment firm planning to run cannabis sessions at his SALT conference in Las Vegas this year alongside other hot topics such as AI and stem cell therapy.

The business is “mainstreaming”, he said. “Over the next decade and a half [the] industry will experience the dotcom growth we had in mid- to late 1990s.”

Insiders point to cannabis as having a multitude of untapped applications across several industries including pharmaceuticals, packaged foods and beverages as well as cosmetics and beauty.

READ MORE: CBD Breaks New Ground In The UK With Landmark Event

Progress At Federal Level

At the federal level, progress has also been made with the farm bill, passed late last year, opened a new front of opportunities by taking hemp off the list of controlled substances and making it permissible for US farmers to grow it for industrialised use. The bill defined industrial hemp as a variety of cannabis with a concentration of THC — the part of the plant that gets users high — of less than 0.3 per cent.

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Future Obstacles Facing The Industry

One remaining obstacle is the Food and Drug Administration, who continue to hold the stance that it is unlawful to introduce food and dietary supplements containing CBD for interstate commerce.

According to the FT that stance is viewed as a key issue in the 2020 US presidential election as there is ‘rare bipartisan support’ for the industry.

Cam Battley, chief corporate officer at Aurora, talks of a “sea change in attitude” towards the sector. “You don’t get an opportunity every day to participate in the very early stages of the creation of a large global industry and that is what is happening now,” he said.