The U.K. Spars with European Commission over CBD

By Trevor Yahn-Grode, Data Analyst, New Frontier Data

In July, the European Commission (i.e., the European Union’s governing body, which proposes legislation and budgeting) issued an official preliminary decision on CBD extracts, stating that “the [EC’s] preliminary view is that CBD extracted from the flowering and fruiting tops of the hemp plant should be considered as a narcotic under the United Nations Single Convention”. The EC’s interpretation that nonmedical hemp extracts should be considered narcotics within the EU has sent shockwaves throughout the nascent European hemp industry and led to fears that legal CBD products could be banned on the continent.

The United Kingdom, however, has rejected the EC’s ruling. The U.K.’s Home Office (i.e., the lead government department overseeing drug policy in the country), has categorically stated that CBD is not a narcotic; last month, London’s Food Standards Agency (equivalent to the American FDA) stated its disagreement with the EC’s preliminary decision, and said that it will consider CBD extracts as novel foods. As the U.K. continues its transition out of the EU, it cannot formally accept Novel Food applications by itself, but it has been encouraging companies to informally submit their Novel Food dossiers to the FSA for feedback. According to regulatory expert Greer Deal of Global Regulatory Services, “this then means that feedback can be acted upon, and the quality and content of the dossier improved so that it’s ready for U.K. submission from 1 January 2021.”

As a combined region, U.K./IRE (i.e., U.K. and Ireland) ranks a close second among the regions analyzed after Germany in annual spending on CBD, and accounted for 24% of total European sales in 2020. U.K./IRE has the third-highest per capita spending on CBD at €29.42, by far the highest rate of the regions with populations of more than 50 million. Current annual CBD spending in U.K./IRE is estimated at €1.71 billion (mid-estimate; low: €1.27 billion, high: €2.21 billion). In 2025, spending is projected to reach €2.80 billion (low: €2.09 billion, high: €3.62 billion).

With the U.K. free from the jurisdiction of the EC and set to pursue more liberal policies concerning CBD (especially in food and drinks), some in the industry see the U.K.’s becoming a hub for CBD commerce and research. Bolstering the notion is that  Nestle (the world’s largest food and beverage company) has become one of the most prominent companies to enter the U.K. CBD market, as illustrated by the conglomerate’s launch of a line of dietary supplements under its Pure Encapsulations brand. Nestle’s product launch is evidence that, as in the U.S., the ambiguous regulatory status of CBD in Europe represents the primary obstacle stifling the industry. Should more concrete, permissive regulations emerge regarding CBD in food and beverage, it is a safe bet that more international companies will enter the fray.