Regulatory blockages are stymieing the growth of the European CBD industry, says one of the continent’s leading experts.
Antonin Cohen has been involved in the European CBD and cannabis industry for the last decade, initially as an activist and later an entrepreneur. He produced his first product for the CBD and industrial hemp market in 2013 and is now the founder and CEO of Harmony.
Speaking at the Global Cannabis Institute conference in London, last week, he said: “2019 looks like being a year of stagnation for the CBD industry in Europe, it is facing many regulatory blockades, and we need new strategies on how to unlock the market.”
He highlighted the differences between his home country, France, and the U.K., with the latter’s regulators prepared – at least for now – to let the CBD market grow, almost unfettered. In the former, French CBD retailers see their shops raided as authorities enforce strict rules which say products should contain absolutely no THC.
Mr Cohen continued: “We are facing some real challenges due to this regulatory paralysis. It simply depends on the country, and the type of product, and then we have the big issues of the number of unregulated products that are on sale, too.
“Then, there are certain trust issues with consumers, with some companies not respecting them, or the industry, and making bad products in an effort to make quick money.”
Looking further into how to develop a winning CBD business he highlighted how CBD oils are they key market citing Google search results which show one million hits for oils, 50,000 for vapes and 20,000 for cosmetics.
“It’s not just enough to have a CBD range, a business also needs to have a USP and that’s not easy as the market is now crowded.
KanaVape Court Row
“We have to also consider additional parameters, such as quality, taste, flavour and then price, and specifically target our clientele.” He commented on how the European market is yet to see CBD find its way into convenience stores – as in the U.S – and highlighted the challenges for companies its looking to secure shelf space with the larger retailers.
“In the value chain of a CBD business the brand is the key; customers love mass consumer brands such as Coca Cola or Pepsi and the challenge for the CBD industry is develop a brand people love, in order to do so you will need to add value and differentiate yourself,” he said
On the European Commission Novel Food issue he says the uncertainty which still surrounds any enforcement is also deterring investment. He believes European regulations can be swayed by the powerful pharmaceutical lobby and recounted his own, on-going battles, with the European Union.
A judgment on his own six-year battle with the French authorities is set to climax in 2020. In January 2018, he was given a 16-month suspended sentence, and a Euro 10,000 fine, by Marseilles Criminal Court over the sale of the CBD KanaVape, which the French authorities deemed ‘illegal’ due to the origin of CBD.
In October 2018, the Court of Appeal of Aix-en-Provence overturned the first instance verdict, because the limitation on the origin of CBD might not be compliant with the freedom of movement of goods of the European Union. The Court of Appeal referred to a preliminary question to the Court of Justice of the European Union (CJEU) to clarify this point.
This has been rumbling on since KanaVape’s launch in 2014 and is currently awaiting judgement from the European Court of Justice (ECJ), early next year, he said.
The ECJ is considering the origins of CBD and ‘if we are successful then France will have to change its approach to CBD’, he said. Recent research on the U.K. CBD market estimates it has doubled in the last year to £300m and will grow to £1billion in a few years. No separate figures are available for the France, and the Brightfield Group estimate the European CBD market will grow 400% by 2023.
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