New CBD Trade Group Signals a Green Light for UK Marketers

By Bill Griffin, Special Contributor to New Frontier Data

The rapid rise of the British CBD industry caught UK regulators off guard. According to market research undertaken by the Centre for Medicinal Cannabis (CMC), consumers in the UK are now spending more for CBD than what they do on vitamin C and D combined, fueling a CBD market estimated to be worth £1 billion (USD $1.34 billion) by 2025.

It’s a huge ⁠— yet technically not 100% legal ⁠— market. Under European Union regulations, most CBD products sold in the UK are marketed as food supplements. To sell food, one needs to ensure that all ingredients are provenly safe for human consumption. The European Food Safety Agency (EFSA) is responsible for establishing and protecting safety standards for all ingredients on the market, and to accordingly provide recommendations to government agencies in EU countries (see NFD coverage of novel foods).

One among several classifications of food are “novel foods”, defined as those coming on the market since May 1997. CBD (and all other cannabinoids) extracted through modern techniques such as CO2 extraction are given an unclassified novel foods status in the EFSA Novels Foods catalogue. To peddle CBD as a food ingredient in Europe, a marketer must apply for a novel foods license.

While some countries strictly enforce the standard, the UK has not. Meanwhile, more than 6 million UK citizens are reportedly taking daily doses of CBD. Around 20 applications are being processed by EFSA, but no novel foods licenses have yet been granted for CBD.

Meantime, the UK’s Food Safety Agency (FSA) is in a bind. “There is no ambiguity in what the regulators want – they want fully legally compliant products on the market,” explained Dr. Andy Yates, CMC Pharmacy Lead. The FSA follows the guideline that the only legally compliant way to introduce CBD foods to market is with a novel foods license. Yet without practical enforcement, the marketing floodgates remain open to anyone poised to distribute their particular CBD brand within the lucrative UK market.

Multiple European studies (including those in Czechia, Spain and the UK) have highlighted how often CBD products do not contain what is indicated on the label. As a result, public safety is unconfirmed, and retail buyer confidence is low.

The challenge facing UK regulators is daunting given the numbers of consumers and jobs affected by any enforcement of a blanket ban in the sector.  Pushing CBD underground to the illicit market would seem a certain result, as no legally compliant alternatives exist on the market. So far, the FSA has proven unwilling to act.

Enter the Association for the Cannabinoid Industry (ACI): Created by industry partners and supported by experts from the pharmacy and food industries working directly with regulators, the new group aims to clear a route to legal compliance in Europe while ensuring access to legal, safe, and quality-ensured CBD products.

“The UK has created a clear path to compliance for CBD products through a novel foods application,” explains John Wallace, managing director of Mile High Labs, one among several large North American companies involved in ACI. He added that the ACI charter is a precursor to industry compliance as applications move through the approval process.

Obtaining a novel foods license is neither cheap nor easy. “It’s a complex, lengthy, but absolutely vital process to ensure we have an industry based on high quality products,” explained Dr. Sarah Gaunt of Global Regulatory Services. “We want to encourage companies to apply for authorisation via a package of robust data that meets all the safety standards for a novel food. This new ACI charter is the first step towards a legally compliant CBD industry which could become the gold standard for the rest of the world.”

The gambit of the ACI is essentially to mollify the FSA’s concerns while easing the burden of wholesale removal of CBD from the market for noncompliance.

Conversely, it represents a proactive move from players such as Mile High Labs which are looking to dominate the sector. By gaining clout to provide licensed novel-food raw materials, smaller brands could likely be swayed to source their materials from them to ensure compliance.

The cost to enter at the top of this food chain may be high, but the potential rewards colossal.