When the Food Standards Agency (FSA) announced in February 2020 its intention to compel companies producing, distributing and selling CBD products to obtain Novel Foods Certification, it may have looked to outsiders like an attempt to clamp down on creeping legalisation. Motivations of this kind, however, are beyond the FSA's remit, which is restricted to food safety. As far as the FSA is concerned, CBD is a Novel Food, just like earlier innovations including krill extracts, chia seeds and UV-treated food.
Originally, the hope was that companies would volunteer the information the FSA required but as this did not happen, it became clear there was no other way forward. Not only was the FSA giving consumers advice regarding possible but unproven health risks and dismissing claims of health benefits, it was now promising to remove non-compliant products from the shelves.
For a young, multi-million-pound industry, this may have seemed heavy-handed, but what seems particularly questionable is the cost of compliance and the speed with which it had to be achieved, as well as the unusual practice of dealing with products that are already on the market. The deadline set for certification was March 2021 but several months after this deadline, only three companies have obtained approval.
Every application needs to give extremely detailed information about extraction methods, composition and stability for each product and this involves scientific research, study and testing as well as extensive clinical trials. Every stage of the supply chain must be examined and consistency across at least five batches of the novel food established beyond doubt. Proving that something is harmless is a much more comprehensive process than proving the opposite and that was always going to take time and cost money.
CBD products have been sold in the UK for years, which has undoubtedly contributed to the problems facing the industry. Progress was further hampered by the degree of misinformation and misunderstanding circulating in the industry. Companies were advised that the process applied only to suppliers, or that wholesalers and retailers needed to supply their supplier's data, while some suppliers were telling companies they did not need to be included in the supplier application.
According to Shomi Malik of the Association for the Cannabinoid Industry (ACI), as the deadline approached, his organisation was "receiving at least 10 enquiries like this every week from companies who have been given this advice and are starting to panic".
The three successful applicants for Novel Food Certification are Pureis, CBDex and 4MP. All three companies have spoken about the complexity and expense of the process. According to its founder Chanelle McCoy, Pureis carried out all the clinical studies demanded by the FSA and European Food Safety Authority (EFSA) "over the course of 18 months and an excess of £1.5 million investment".
Other major players like Gibson's Goodology, which launched its CBD-infused tea in Canada already had significant experience in both compliance and self-regulation so were better prepared than most for the FSA regime. However, according to policy advisor Dan Rowland, completing an application "took thousands of pounds and months of the best cannabis regulation minds in the UK and North America".
For smaller enterprises, this could prove to be prohibitive and there are cases of successful companies closing down because they simply did not have the resources to meet their obligations under what is effectively retrospective regulation.
"Pragmatic and proportionate"
Months after the FSA's deadline, the vast majority of CBD brands are still not on the approved list and a sudden rush of last-minute applications as March 2021 approached did not help the situation. Rigidly following the original timetable would have resulted in the FSA being potentially responsible for the closure of scores of businesses. Not surprisingly, the FSA decided to revise their strategy to extend the deadline for companies whose applications had been submitted but not yet assessed, as Emily Miles, Chief Executive of the FSA explained: "For some time now we've been supporting a pragmatic and proportionate approach to CBD regulation. Our commitment to ensuring that consumers know these products are being checked for safety remains firm."
Since then, the FSA has missed three deadlines, the most recent being 30th June 2021. The reasons reported in an FSA statement were unhelpfully vague: "The list will not be finalised by the end of the month as we don't have all the information we need from some businesses to assess if their products can be added to the 'on hold' section of the CBD list." While this has allowed businesses to continue trading, it has created uncertainty about the future and left many contracts hanging in the balance.
What happens next is unclear. The FSA made its intentions clear and despite the delays, it is not going to revise its position, but so far disaster has been averted. If the impasse is successfully resolved, then it is likely that in the long run, the CBD industry will benefit from the certification programme. The Novel Foods requirement is much better understood now and with the possibility of joint applications, the burdens may be reduced so that new entrants need not be discouraged. As the UK industry continues to grow - it is forecast to be worth of £1 billion by 2025 - consumer confidence can only be enhanced by FSA endorsement.
Already some 8 million adults a year are using CBD-infused products for pleasure and also for the widely reported health benefits (despite the prohibition on making such claims from suppliers and manufacturers). Widespread certification can be expected to give a huge boost to consumer trust and demand and attract more entrepreneurs into the industry.
Other obstacles could also be swept away as the CBD industry becomes a much safer and more attractive environment for investors. This new-found legitimacy could finally end the advertising restrictions which Twitter, Facebook and Instagram currently impose and make it possible for CBD companies to accept payments through digital payment platforms such as PayPal and Stripe.
There may be many questions about the FSA strategy but the harshness of the theory is giving way to a rather more amenable reality.