Efforts to crack down on the rampant market for CBD oils, tinctures and cleaners have brought UK regulators into collision with cannabis startups, after the companies found himself confused about the new regulations.
The Food Standards Agency last month released a list of 3,500 edible products with CBD — a cannabinoid that doesn’t get people stoned and can be sold over-the-counter — that are in the process of being approved for approval. sell.
The FSA said any product not on the list must be withdrawn from sale in the UK at that time. No new products are allowed if they are launched after February 2020, the cut-off date set by the regulator.
But this week, the UK’s food watchdog was forced to reopen the process after receiving a large number of late applications from companies hoping to resume selling their products. It said the information “should have been given to us much earlier”. The regulator will update the list twice more but will not add any more products after June 30.
The UK was the first country to regulate CBD in food. “The process of transitioning hundreds of companies and thousands of product lines from the gray market to the legally regulated market has always been complicated,” said Steve Moore, founder of the Cannabinoid Industry Association trade group. ”
He added: “There is obviously concern that a new deadline has emerged but it can be reassured that the FSA is adamant that this is a ‘stop’ deadline and the requirements to make the list remain unchanged. “
Over 900 applications have been submitted for FSA approval but only 70 have moved on to the next stage of analysis, meaning thousands of products and brands are potentially linked to failed applications. public will be removed from the sale list.
The market for CBD, touted as a pain reliever from anxiety to joint pain, has exploded amid consumer cravings for health and wellness. This year, it is estimated to exceed 3 billion euros in Europe, according to the cannabis ban consulting firm Partner.
Sales of products containing CBD, as opposed to its psychoactive cannabinoid THC, which are not classified as illegal drugs, started to accelerate a few years ago with the growth of the industry. legal profession for recreational and medical marijuana.
London-listed Cellular Goods, in which retired footballer David Beckham owns 5% of the shares, is one of the companies whose products it claims are not in compliance.
Initially, having told investors it could continue selling its edible products, the company was forced to do so a few days later because it admitted that some of its products was released after the expiration date of the FSA.
On Friday, Cellular Goods, which raised £13m in a market round last February, continued to sell its products online despite the FSA’s decision. But in the evening, it issued a market update confirming that Trading Standards had asked it to suspend sales “with immediate effect”.
Anna Chokina, chief executive officer, said the company is “disappointed by the FSA’s stance” and believes its products are safe.
The FSA’s crackdown comes after reports that CBD products aren’t always what they claim to be. A 2019 study by the Medical Cannabis Center found CBD products sold in the UK were of “variety quality” with some containing less cannabinoid than claimed, or none.
The unregulated market for CBD, used in products ranging from skin care to dietary supplements, has nurtured both “dodgy consultants and dodgy companies,” Moore said.
Tony Calamita, chief executive officer of Love Hemp, which sells CBD weaning and skincare, said that “for many years there have been a lot of cowboy products on the market,” but the regulation will now protect consumers. use.
He described the listing’s publication as an “extremely positive step for the industry” but said the time it took for the FSA to publish the list had “pushed many companies out of the market or prevented them from entering the market.” launching new products”.
Antonio Costanzo, chief executive officer of one of Europe’s largest cannabis growers, Curaleaf International, says the FSA listing is “a starting point for a clear understanding of how we can bring [new] products to market”.
Retailers Boots and Holland & Barrett told the Financial Times they were taking steps to remove unlisted products, while Amazon and Superdrug said they were still reviewing the listing.
However, it remains unclear who will ensure that the FSA listing is being followed. The watchdog relies on local governments, which it says are also responsible for online sales, to enforce its regulations.
The Local Government Association said that due to “significant capacity challenges in local management services in general, councils are likely to target their work on this issue by information”. non-compliance intelligence”.
Stephen Murphy, co-founder and chief executive officer of Prohibition Partners, said there was “no clear enforcement” of the new rules on CBD and many unlisted companies are likely to see reconsider their “risk appetite” and consider trading as before.
