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CBD products no longer ex-hemp from regulation

02 September 2020. Published by Sarah Mountain, Senior Associate and Natalie Drew, Senior Associate and Hannah Ridzuan-Allen, Associate

In recent years, there has been a surge in demand for food and drink products containing cannabidiol (CBD). Popular items have ranged from oils with added CBD to CBD-infused chocolate and kombucha. With the market experiencing double digit growth year on year and a recent spike in demand during 'lockdown', UK consumers continue to demonstrate ever greater interest in CBD products. But with new regulatory requirements on the horizon, are things about to change?

Along with Tetrahydrocannabinol (THC), CBD is a natural compound found in the cannabis plant. The distinction between the two compounds is that whilst THC is psychoactive, CBD is (seemingly) not. CBD has only very recently been removed and sold as a separate extract and as such, little is known about the mid to long-term effects of consuming it. 

What about the science? How do THC and CBD affect the human body? 

Both THC and CBD are types of cannabinoids, which interact with the human body's own internal endocannabinoid system. Discovered in the 1990s, endocannabinoids are the natural cannabis like molecules produced by the human body. Current studies suggest that the key role of the endocannabinoid system is to maintain bodily homeostasis (biological harmony in response to changes in the environment). Whilst it was originally understood that receptors were only present in the brain and nerves, scientists have since determined that they are present throughout the body (including, for example, in human skin, immune cells, heart, blood vessels, and kidneys). We also now know that the endocannabinoid system is involved in a wide variety of processes, including pain, appetite, metabolism, mood, appetite, and reproductive function. 

Why is there so much discussion about CBD products at the moment?

Until last year, CBD had seemingly slipped between the cracks of various regulatory regimes: neither a 'Controlled Drug' for the purposes of the Misuse of Drugs Act 1971 nor a 'Medicinal product' under Regulation 2 of The Human Medicines Regulations 2012. This changed in January 2019 however, when CBD was listed as a 'novel food'.

Regulation of CBD products as 'novel foods'

Under Regulation (EU) 2015/2283 a 'novel food' is any food that was not used for human consumption to a significant degree within the EU before 15 May 1997. If a food product, manufacturing method or ingredient is classified as novel, safety assessments must be undertaken before that product can be sold to consumers, to ensure that it is safe for human consumption. Until last year, CBD products were not considered novel and so could enter the market without authorisation. However, in January 2019 the legal status of CBD products changed when a new entry on cannabinoids (which include CBD) was published in the EU Novel food catalogue.

Food standards agencies across the EU have responded to the catalogue entry very differently. In Spain and Austria, CBD food and drink products have been removed from the market and cannot be sold until they receive novel foods authorisation. Germany and the UK, meanwhile, have taken a 'phased compliance' approach and have permitted CBD products that are 'already on the market' to continue to be sold, during an interim period. This period expires on 31 March 2021, by which time, all those who wish to market CBD products in the UK will need to have submitted an application for novel food authorisation to the UK's Food Standards Agency (FSA). Food and drink products that fail to meet this deadline will have to be removed from the shelves, or risk enforcement action. It is therefore imperative that marketers of CBD products use this time to ensure that the necessary authorisation is in place on or before 1 April 2021. Likewise, retailers who source CBD products from third parties should ensure that their suppliers are working towards the deadline and that they have the requisite knowledge and resources to complete the application process. 

In light of the disruption caused by the COVID-19 pandemic, the Cannabis Trade Association (CTA) asked the FSA to relax the 31 March 2021 deadline (as covered in Issue 8 of RPC Bites). The FSA refused this request, stating that it had not seen any evidence to suggest that COVID-19 had impacted businesses' ability to meet the deadline.  In response, the CTA described the FSA's approach as "baffling, unsympathetic and unaligned with all government departments at this moment of national and international crisis". 

CBD sales during 'lockdown'

Whilst retailers are facing regulatory challenges, it remains a promising time for the UK's burgeoning CBD industry. During the first four months of 2020, UK spending on CBD products exceeded £150M. If these sales volumes continue, the industry is set to hit annual revenues of £450M – up 50% from 2019. The surge is likely partly attributable to the fact that CBD is touted by many for its stress reducing properties: between 20 - 30 March 2020, almost half of the surveyed UK public reported experiencing high anxiety. In these uncertain times, the CBD market has become an unexpected beneficiary of the UK's national psyche.

Unsurprisingly, with non-essential shops shut between 24 March - 15 June 2020, the success has largely been enjoyed by online CBD retailers, rather than those who sell from bricks and mortar outlets. Whilst CBD products have been readily available online for some time now, the restrictions presented by the COVID-19 outbreak prompted some to innovate, in order to reach a wider audience.

Trip's partnership with Deliveroo  

Luxury CBD brand Trip sells a range of CBD infusions and has seen considerable recent success, with a 420% month on month increase in sales during April. In May 2020, Trip joined Deliveroo as the platform's first specialist CBD supplier. Since 20 May 2020, Trip products have been available to order via Deliveroo in London, Manchester and Leeds. With 3,000 new businesses having reportedly joined Deliveroo in March 2020 alone, Trip is the first CBD supplier to take this step but is unlikely to be the last. 

Whilst by no means a silver bullet, delivery services have provided a lifeline for retailers and consumers alike, during the 'lockdown' period. As we head into Autumn it is likely that at least some parts of the country will yet face further 'lockdowns', and therefore that the delivery trend will continue.  Many predict that some of the short-term habits adopted during 'lockdown' will become permanent and certainly, convenience is perennially popular amongst consumers. Whilst the sale of CBD products is becoming more regulated, the rewards for those businesses that can successfully navigate the novel foods regime, would appear to be plentiful. 

If you would like further information on obtaining authorisation under the novel foods regime, do feel free to contact a member of our Food & Drink Group.