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One Step Forward for CBD in the UK, but Questions Remain at Home and Abroad

One Step Forward for CBD in the UK, but Questions Remain at Home and Abroad
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The recent publishing of the list of CBD products with a valid Novel Foods application by the UK’s Food Safety Authority (FSA) is welcome progress for the industry, as it brings the UK CBD market one step closer to full compliance with regulation.

It has also raised questions however, due to the inclusion of many products which are over the 1mg of THC per product limit set by the Home Office (the UK’s authority on narcotics). This has cast doubt over what the effective limit will be going forward – the 0.2% THC content per product limit currently adhered to by the industry, or the 1mg THC per product limit set by the Home Office in 2019.

Italy’s Eusphera, which has 11 products on the FSA’s list, expects the Home Office limit to eventually take effect as part of the novel food process.

Max Nardulli, Managing Partner at Eusphera, said:

‘Once the UKFSA will have the chance to look into the technical side of the application, I would expect that the products that will exceed the THC limits will not get final validation’

Mr. Nardulli went on to say that navigating the wider Europe CBD market requires taking a comprehensive, country-level approach:

‘THC limits need to be complied with on a country by country basis. The real issue is that each company distributing in multiple countries must have a clear strategy in compliance with the individual country and hence avoid mislabeling, respecting the limits relative to a specific country. It’s a tedious process but it is the only way to achieve consistency.’

The current situation in the UK is just one example of an issue that is seen across Europe; there is a level of uncertainty in many countries on what the legal boundaries of the CBD industry are. In particular, permitted THC limits in products is an area where legality, enforcement, and practice in the market are not always aligned, and this creates a level of uncertainty that is a burden on the growth and development of the sector.

This uncertainty stems in large part from the absence of regulations specific to consumable CBD products, regulations which are lacking because of how new the industry is. The 0.2% or 0.3% levels of THC content per product which are often cited as national limits are taken from regulations which concern industrial hemp being grown in fields and used for textiles and fibre. Taking the same plant, processing it into a concentrated extract and selling that extract in food and cosmetic products was not considered when these regulations were drawn up, and they are not always sufficiently detailed for the limits they impose to be suitable for this separate line of industry. The regulations regarding hemp and hemp products are often taken to apply for CBD products only because they are the closest thing countries have to CBD-specific laws. 

Across the region, authorities have not dealt with the fact that at some stage in the production process for extract-based CBD products, the content of THC in intermediate products being handled by the producer will exceed any national limits of what is permitted without a licence. This is simply due to the nature of producing concentrated extract. Due to decentralised supply chains these concentrated products are often not only handled by companies without the legally required licensing, but also traded between these companies, even across borders.

When regulators do engage with the CBD industry, they are often unsure which laws are relevant, and how to apply them to individual cases. Looking beyond the recent developments in the UK, France has previously attempted to crack down on the sale of CBD products in the country, but was prevented from doing so by the European Court of Justice’s historic November 2020 ruling on CBD. The retail industry is now flourishing in the country, with a clear 0.3% THC limit for consumer products established in January 2022. Italy effectively raised legal THC limits in products to 0.6% in 2017 as an unintended consequence of a law created to make cultivation easier for hemp farmers and the 0.6% limit is still what the industry adheres to. Other European countries tolerate the industry, yet sporadically clamp down on CBD businesses through product recalls, as well as seizures of crops or shop stock – e.g. in Germany, Ireland, Spain, and Portugal.

In most European countries, regulators choose to turn a blind eye to the parts of the industry which pose legal questions. The result of this lack of oversight is not only that THC content in products can be variable, but so too product quality and consistency. This damages the reputation of the CBD sector, and therefore buyer confidence, and acts as a barrier to development. Moreover, the inconsistent application of regulation to the industry creates room for companies to cut corners and market a lower standard product for cheaper, outcompeting the more stringently compliant groups.

Leading companies in the industry are responding by self-regulating. Businesses are getting their processes certified to recognised standards, and their products tested in private independent laboratories. This is slowly creating an open, transparent European market in which buyers can participate with confidence to the extent that they know what they are buying. This also benefits the longevity of these companies by ensuring compliance if and when authorities become more proactive in creating and implementing regulations. 

The question of technical legality on a state-by-state basis will remain however, until such a time as regulators are willing to engage with the industry in a comprehensive way. When this happens, the practices of the legitimate players active in the sector will form a foundation for regulation to be built upon. In the meantime, standardisation and quality is left to the industry operators to establish and maintain.

If you’d like more information please email Lawrence Purkiss, Prohibition Partners Analyst, at lawrence@prohibitionpartners.com

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