The CBD market was built from the ground up by small British businesses, but it’s about to be stolen by government-backed companies.
(This is an ‘Opinion‘ article, written by one of our readers. All the statements in this article are the personal opinions of the author and not representative of CBD Testers. Click HERE to learn how to get your article published)
Over about the last five years, small British businesses have built the CBD market from zero to hundreds of millions in annual sales. It’s been driven by rapidly changing attitudes towards cannabis and a realization that many of its medicinal benefits could be available legally by using traditional hemp extracts.
Big business, the established supplement and health food companies weren’t interested. They saw the stigma around cannabis before they saw the changing attitudes.
Now it’s all very different. Millions of people are using CBD. All the big multiples are stocking it. It’s become a media fascination and many people say they gain great benefit from it. Suddenly, big business and all the regulators are interested. Suddenly those who weren’t bothered previously are cautioning about all sorts of dangers and concerns.
Although evidence of CBD or hemp causing any harm is minimal at best, they clearly they don’t think these small, independent businesses can be trusted anymore. A likely scenario is that they want a slice of the action – or possibly all of the action if they can get their chums in government and the bureaucracy to step in and assist with their plans.
In fact the British CBD industry has been a model of responsible self-regulation. Two trade associations, the CTA and CannaPro, represent virtually all the leading UK suppliers and maintain high levels of quality control and trading standards, including regular reporting of non-compliant businesses to the MHRA.
But in June this year, the Centre for Medicinal Cannabis (CMC) published a sensational report alleging that most of the CBD on the market was very poor quality, contained illegal levels of THC and some contained no CBD at all. Its report was presented as some sort of independent, academic study that should be regarded as science. But was it really? Or was it a cheap marketing stunt? Interestingly enough, just a few weeks later it announced that all its members’ products were good quality and there was no problem with them.
Now the CMC has thrown itself in with the EU and is backing the classification of British CBD products as ‘novel foods’, meaning that any business selling CBD would have to apply for an authorization at a cost of at least £250,000 in a process taking perhaps two years to complete. The CMC has also aligned itself with an interpretation of the law on THC levels in CBD products which is completely at odds with the established industry. It has sided with the Home Office saying that there cannot be any THC at all, whereas the industry relies on a definition of ‘exempt products’ in the Misuse of Drugs Regulations 2001 which permits up to 1mg of THC in each container.
As Brexit approaches, the Food Standards Agency (FSA) is expected to issue guidance on enforcement of the novel foods classification. If it acts before Brexit then the position will be carried over in the Withdrawal Agreement. And now the CMC has launched yet another trade body, the Association for the Cannabinoid Industry, (ACI) which it is implying will enable CBD suppliers to enjoy a ‘grace period’ from FSA enforcement.
It would be unlawful for the FSA to make any arrangements or offer any ‘grace period’ to CMC or ACI members that is not available to any other business. At the moment, the CMC/ACI is pushing it with the requirement to sign up to membership at a cost said to be between £10,000 and £50,000 per year, completely prohibitive for the small businesses that have worked so hard to develop this industry.
The CMC appeared sometime in 2018 announcing itself as “the UK’s first and only industry membership body for businesses and investors operating in cannabis based medicinal products (CBMPs) and cannabidiol (CBD) wellness markets.“ It’s actually the fifth or sixth to set itself up as a trade body in this market and it’s certainly not the only. Between them, the CTA and CannaPro represent hundreds of businesses with millions of satisfied customers. The CMC has only a handful of members.
What’s important to note is that the CMC/ACI has a large financial pool from its backer, the multimillionaire Paul Birch as well as a great deal of influence from Steve Moore, who knows all the right people in all the establishment and has a lot of pull. In just a few short months a fortune has been funneled into PR and media relations and made itself the go to source for anything on medicinal cannabis and CBD. It has also bought and paid for a large number of highly qualified people with impressive credentials who inevitably carry great weight with the authorities. Its ambitions are clear.
What are the CMC’s intentions? Do they plan to destroy the small businesses that built this market and seize it all for itself – and it looks as though it may well succeed?
CannaPro spoke with the FSA earlier this week. For the moment, the FSA cannot act as we are in election ‘purdah’, the civil service can’t really do anything except keep the status quo but that will all change after the election. Then, depending on the new government, it may move rapidly to commence enforcement. What this will mean is impossible to predict but almost certainly the multiples will take stock off the shelves unless some interim arrangements are agreed. Those with retail premises will be in the most immediate danger, online sellers will be in a better position but if Trading Standards officers try to seize stock, they have extraordinary powers and trying to obstruct them may result in arrest.
From where I stand, the novel foods classification is fake and a lot of evidence has been presented to prove this but it is simply being dismissed. It’s rather like the way the medical establishment dismisses the evidence on medicinal cannabis. If these institutions don’t like evidence they simply ignore it. For obvious reasons, it suits the CMC to get behind the novel food scam but the result for consumers will be a lot less choice and probably substantial price rises. It’s also very bad news for British CBD businesses. A lot of people are likely to lose their jobs.
Read more about Novel Food Status here.
Mike Harlington from CTA has provided a reply to this article, which you can read in the comment section below. We are awaiting a response from the CMC.
(This is an ‘Opinion‘ article, written by one of our readers. All the statements in this article are the personal opinions of the author and not representative of CBD Testers. Click HERE to learn how to get your article published)
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An awful lot of what Peter says is entirely correct, indeed we at the CTA have a number of complaints with the ASA, FSA and other authorities regarding the claims made by the CMC, they certainly aren’t the first association in existence, that honour belongs solely to the CTA. Indeed yesterday was the third anniversary of our first meeting with the MHRA.
The CTA is the largest association of its type in the world, representing around 1000 members and a further 5000 or so sellers. Last year for instance our membership sold around $3bn of cannabis products, around €450m of which was in Europe, with around a third of that being in the UK. Many of our members are small operators, of course, most of the larger industry players are CTA members and pay to support the aims of the CTA and the multitude of smaller members who benefit from our dominant position. We’re now operational in 35 countries with 8 full time staff members and another 5 part time spread around the world.
The CTA is currently awaiting a document from our legal teams to be forwarded to the FSA explaining why they cannot back the CMC position. Put simply it would not be legal to do so. The FSA has to remain independent, it cannot enforce against any position except where all legal alternatives are also included. The CTA has a fully legal process it has agreed directly with EFSA to work with, without resorting to prohibitively expensive NF applications. The UK FSA has almost no legal capacity to act independently of the agreed position in Europe.
After our last visit to Brussels in June where we received advice and guidance from the team dealing with this we as the largest representative of cannabis businesses in Europe where offered a route which legally presents the evidence of non novelty (something which has been to all intents and purposes, overlooked) and allows us to constantly update the file as late as 5 days before a decision is made. The decision can also be made at country level not EFSA level, although it is not likely to be handled by a sole notifying authority, which is why we work with so many other FSA departments throughout Europe.
We as the CTA undertook several weeks of risk assessment with the legal teams and decided that the route we are taking is the best route and allows the EFSA to agree legally to the membership we represent to be exempted from any form of action by any authority in the MS and UK (Brexit presumed).
This route has the support and backing of a number of Member States, all of whom I have personally visited in the first part of the year and has been discussed at length with each one. It involves showing each of the States documentary evidence that each and every one of our members have been shown to be compliant and there products to be what they claim. In June we agreed with EIHA that we would also support their membership because EIHA have started to ensure compliance also. We will be presenting this to the Working Group in January.
The CTA will be releasing a statement very shortly and our Submission will be submitted to our primary submitting authority in the next few days.
It will be no surprise to anyone familiar with him but it is just ludicrous to see Harlington trying to pull of the same scam as the CMC.
Mixed in with his usual grandstanding and boasting he tells us the regulators have to remain independent, then he tries to convince us that he has negotiated a special deal that will apply only to CTA and EIHA members.
Quod erat demonstrandum.