The clouds are gathering over the CBD bandwagon in U.K. amid concerns of a regulatory crackdown – and a widening industry rift.
Two senior CBD figures U.K. – one a leading lawyer and the second, the head of powerful membership group – have sounded the alarm. Both say the U.K Foods Standards Agency (FSA) is set to start enforcement action on CBD products and business as it pushes for adherence to the European Union’s Novel Food regulations.
But, a widening rift over Novel Foods, could see the CBD industry embroiled in a lengthy, multi-million pound court battle.
Steve Moore, Founder and Director of the London-based Centre For Medicinal Cannabis (CMC), told CBD Testers the industry had reached its ‘crescendo moment’. Leading cannabis lawyer Robert Jappie works with both the U.K-based Cannabis Trades Association (CTA) and the European Industrial Hemp Association (EIHA); the two represent well over 1,000 cannabis businesses.
Both these trade bodies are implacably opposed to the Novel Food pathway – which was introduced in January – but Novel Food has the full backing of the CMC. We’ll come to their differences later, but both sides are in agreement on one thing; a D-Day moment for the U.K. CBD industry looms.
Mr Moore told CBD Testers: “We have asked the regulatory authorities for their view. There have been meetings and dialogue for the last six months and we are now reaching a crescendo moment. The industry is not sustainable and consumer confidence cannot be maintained if we do not meet all the requirements of the FSA; and in our dialogue they have been unequivocal in what that constitutes” – that is, Novel Food Authorization.
Business ‘Push Back’
Mr Jappie, Head of Cannabis Law at U.K. law firm Mackrell Turner Garrett, told CBD Testers: “We are hearing noises from the FSA that they will be taking action within the next few weeks. The FSA will give their enforcement advise, this is issued to local authority trading standards and we could suddenly see an increase in enforcement activity.”
He continued: “Businesses need to be ready and ready to push back hard, because this is not fair. The FSA has not been giving the industry the proper guidance and they are going to have a fight on their hands. My advice to CBD sellers and businesses is to make hay while the sun shines, to keep going.”
He said the CTA will challenge the FSA and this could end up in the courts. The CTA and EIHA argue that CBD extracts cannot be a Novel Food as they have been consumed in Europe for thousands of years. However the CMC has agreed with the EU’s January decision and has been working on a number of ways of to help its members fall into line.
‘Grace Period’ Possibility
Mr Moore believes the relevance of the CTA’s position has passed, saying the ‘E.U. has now made its decision and the chances of it being reversed are close to nil’. “Any decision by the E.U. is open to challenge, but at the CMC we recognise that Novel Food Authorisation is the foundation for a legal and safe sector. It’s up to others to decide what they do,” he said.
On November 8, the CMC will launch a new industry body the Association For The Cannabinoid Industry, which will work with its members on Novel Food applications, and it will also seek a ‘grace period’ from the FSA whilst these are secured.
Mr Moore said the CBD industry was no different to other ‘nascent industries in that a set of standards needs to be agreed to allow it to continue, to legally develop, and secure and maintain consumer confidence’.
‘Too Big, Too Exuberant’
He continued: “The industry got too big, got too exuberant over last 18 months, the mainstream media caught up with this and this is driving it. It’s not a political or consumer thing – people aren’t signing petitions asking for CBD to be removed.
“We have a clear idea on the way things are moving, and it’s now an issue of consumer confidence. The Novel Food process is foundation for creating products that people can be reassured are, of the correct quality and safety; at the moment there is not a credible path for a sustainable industry that bypasses that.”
Mr Jappie said its discussions with E.U. continue and, as reported previously on CBD Testers, the CTA and the EIHA are hopeful of securing recognition from the E.U .of its position on the legality of CBD extracts.
He said: “The information I have is that the FSA will come out with a decision in the next few weeks.
FSA ‘At Fault’
“We need to see what that is, but I fully expect it to support the position of the CMC and this could lead to litigation by everyone outside of this. This is the FSA’s fault because they have been virtually silent on the issue.” The industry has been crying out for guidance from the regulator and they have been absent.
“We are in a position were the two sides are entrenched and one of them is going to be unhappy when FSA takes a side. This will not stop industry dead in its tracks; the CTA will challenge the FSA. It’s not good for the CBD industry to have these divisions and we’d prefer to see a joined up approach, but the EIHA and CTA will not take this lying down.”
A spokesperson for the FSA said: “CBD extracts are considered Novel Foods under food law and we expect companies to comply with the Novel Foods process, which includes submitting safety information about their products.
“The FSA is considering the best way to ensure CBD food-related products currently on the market move towards compliance. We will be providing an update on this process and our position when we have completed those considerations.”
The FSA went on to say there are a ‘number of CBD products on the market that are non-compliant’ and if there is ‘any evidence that products are unsafe, we will work with local authorities to remove them from sale’. The calling of a U.K. General Election for December 12, means there is little chance of any enforcement until after that date.
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