Could the U.K. Eliminate Novel Food Regulations for Cannabis?

In what would be a major boon to the regulated cannabis industry in the U.K., a Parliamentary group has now suggested that products containing cannabidiol should no longer be subjected to Novel Food regulations. Firms who wish to manufacture CBD-containing food products to date across Europe have all had to submit such applications to prove that cannabidiol is not hazardous to human health.

In both the U.K. and the E.U., this has been rocky territory.

On the British side, in March, the Food Safety Authority (FSA) gave 3,536 products preliminary approval before complaints caused the agency to expand that list to 6,000 with more to be added. Critics have said that the system is complex, costly, anti-competitive, and has no benefit for consumers.

Those wishing to amend that path to market also argue that submitting every CBD product to this process is like using an elephant gun to shoot a mouse. Here is why. Novel Food applications are usually required only of large corporations with international reach. There is almost no chance that smaller firms would have the wherewithal to perform such processes.

The British group has also suggested that the manufacturers of such products should be required to submit COAs—or certificates of analysis—to prove that they are not hazardous to human health.

This move would drastically speed up the development of this part of the industry, with implications for THC as well. COA analysis is also the standard used routinely in the backend of sourcing for the industry. People looking for bulk cannabis flower, distillate, or isolate share COAs before purchase agreements are signed—on both the medical and non-medical side.

These recommendations, as a result, are incredibly good news indeed, especially given the unbelievably bureaucratic and frustrating lack of progress so far on both sides of the Brexit divide.

In the U.K. at least, politicians appear to be listening.

The news is not so good on the E.U. side of the discussion. The fact that the European Food Safety Authority (EFSA) broke the news on Tuesday that they were delaying 19 pending applications is probably not coincidental. Even if it is, their decision puts the entire discussion about the process firmly in the spotlight within the E.U. too.

What Is Novel Food and Why Does This Matter to The E.U. Cannabis Industry?

For those outside of Europe, the idea of “Novel Foods” has never blighted the discussion about the acceptance of any cannabinoid. In fact, foreigners do not know what the fuss is about. This is also why edibles are now about half of the total U.S. market. They simply are not subjected to this analysis.

Those in Europe have had to face a bizarre series of regulatory hurdles—beyond the “normal” issues of legalization and certification—because CBD-containing products have been subjected to a regulation adopted at the beginning of the European Union. Novel Food regulation was implemented in 1997. The idea was to prevent food that is “foreign” and potentially hazardous to human health from entering distribution within the block. Approvals are an exceedingly long, arduous, and expensive process. On the U.K. side, after Brexit, the same structural regulatory process was also applied; it was just moved under the purview of a domestic agency, not a European one.

On one level of course this regulation (sans cannabis) makes a world of sense. In fact, similar regulation exists in the United States and Canada (as it does in most countries). Cannabis products, however, have not been subjected to this kind of scrutiny in either country because of the trajectory of cannabis reform. In Canada, the edibles business did not lead the discussion. In the United States, there has been no federal regulatory environment that applied to anything in the industry because so far, legalization has only existed on a state level.

In Europe that conversation has been very different.

This is unbelievably frustrating considering that hemp, much less extracted CBD, is not “novel”. It was widely consumed in the region long before there was an E.U.

Regulators, however, don’t share that perspective. Yet.

More Delays in Europe for Pending Applications

The new stance from the British Parliament is even more refreshing given current events on the ground.

On the E.U. side, as more delays were announced this week, according to Professor Dominique Turck, the chair of the Novel Foods and Food Allergens panel for the EFSA. “We have identified several hazards related to CBD intake and determined that the many data gaps on these health effects need filling before these evaluations can go ahead. It is important to stress at this point that we have not concluded that CBD is unsafe as food.”

The specific reason for the newest approval delay on the E.U. side is that the committee claims that there is insufficient data on the effect of CBD on the liver, gastrointestinal tract, endocrine, nervous system, and people’s psychological well-being.

As a small sop to companies with pending applications, Ana Alfonso, Head of Nutrition and Food Innovation at the agency said, “Stopping the clock on a novel food assessment is not unusual when information is missing. It’s the responsibility of applicants to fill data gaps. We are engaging with them to explain how the additional information can be provided to help address the uncertainties.”

The agency will hold an online session on June 28 which is open to applicants and other interested parties to discuss how applicants might provide information the agency claims is incomplete.

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The Thorny Issue Of U.K. CBD Regulation In A Post-Brexit World

With Brexit done, U.K. authorities are being urged to establish a clear set of workable rules for the fast-growing CBD industry.

There will certainly be changes to the CBD industry as a result of Brexit. CBD is a global phenomenon worth £300m in the U.K. where it already surpasses the Vitamin C and Vitamin D supplement markets, combined. There are a number of options available with U.K cannabis experts calling for a new ‘light-touch’ industry-wide framework alongside a robust, and independent testing regime.

But one thing most agree on is this – a termination of the status quo.

‘CBD Is Not A Novel Food’

This is the controversial European Commission’s (E.C.) Novel Food ruling of 2019, which is proving a thorn in the side for all 27 remaining European members. The E.C. adoption of CBD as Novel Food in 2019 left the industry both angry and perplexed.

For, after accepting 20 years ago that hemp extracts, including CBD, were not Novel, the E.C. had changed its mind. Even the most fair-minded of individuals err towards cynicism on this particular issue, sensing the panic of ‘big pharma’ at the approach of the CBD wellness avalanche.

In the U.K., its regulator the Food Standards Agency (FSA) has steadfastly stuck to the E.C. pathway which says all CBD products should undergo a costly and time-consuming approval process.

While not legally binding the Novel Food Catalogue is used as a reference by national authorities and consequently a number of companies, in the U.K. and Europe, have faced enforcement action.

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Brexit Blues 

The FSA’s position has been understandable, to a certain degree, as Brexit has created an all-consuming policy black hole, preventing any light being shed on a whole host of pressing national issues, which of course, includes CBD.

Leading U.K. cannabis lawyer Robert Jappie, who joins international Law Firm Ince this month, says that with Brexit out of the way focus can shift shed elsewhere.

“There has been so little guidance on CBD from the FSA because of Brexit. That is all the government been involved with and explains why we have had so little information from the FSA on this issue.”

On CBD, he believes things will change: “The optic of a U.K. regulatory body saying they are going to enforce non-binding E.U. regulation, in the current political climate, wouldn’t be a good look.” 

CBD Products with ‘No CBD’

In 2016, when CBD first made inroads in to the U.K market the newly formed Cannabis Trades Association (CTA) reached an agreement with health regulators that CBD should be sold as a food supplement and sellers were not able to make any medical claims.

This saw regulatory responsibility pass to the FSA which last month acknowledged, in a response to CBD Testers, that CBD is essentially ‘safe’. However, there is still a whole load of concern over the validity of CBD products on the market, with research suggesting some may not even contain CBD.

CBD products are under fire over concerns of legitimacy

At a recent trade show the CTA Chairman Mike Harlington called out the operators who were damaging the sector by making medical claims. Organisations such as the CTA, which has over 1,000 member businesses, have developed their own self-regulatory regimes.

A second trade body is CannaPro, its founder Peter Reynolds has been an active cannabis advocate for longer than he cares to remember. He says the attempt to classify CBD as a novel food is a ‘scam’ and highlights how the FSA now views CBD as safe.

He told CBD Testers: “We need to find a better method of regulation and a consistent method of testing to allow for comparisons between products.” 

Speedy Resolution

“Certainly, an independent testing body would-be helpful in this respect. I’m no fan of ‘big Government’ but this is what we have them for, to help supervise and monitor industries.”  

The Centre for Medicinal Cannabis, through its affiliate the Association for the Cannabinoid Industry, encourages its members to pursue a Novel Food Authorisation – this can cost over £300,000 and take more than two years.

Steve Moore, its Strategic Counsel & Director, said: “There should be be no compromise on food safety. So all products on the market must be subject to rigorous food safety assessments, along the lines of existing Novel Foods authorisation. 

“However, post-Brexit, it may be the case that a U.K. assessment could be a lot quicker process than the current one implemented by the European Commission.” 

Mr Jappie highlighted the pressing need for a speedy resolution.

“People are buying these products for a medical purpose, but they are sold as food supplement and there is very little regulation. At this stage it doesn’t not look like the FSA will be ordering CBD product to be taken off the shelves, so there needs to be some consensus between regulators and the industry to ensure people are being sold quality products.”

Hemp And CBD

However, there is a widespread view among CBD advocates that, after many meetings with the FSA, its single-minded Novel Food adherence demonstrates a fundamental mis-understanding.

EU Novel Food and The Legal Status of CBD Oil

In 1998, foods or additives not widely used in Europe, priorly, were classed a Novel Foods and those wanting to sell them in the E.C. needed approval, primarily for consumer safety reasons.

Initially, the E.C. said ‘most’ extracts of the Cannabis Sativa plant were not Novel, but added CBD to its definition in 2019, and said ‘only seeds products and seed oil’ are not Novel. And continued: ‘Food products made from leaves, flowers and all extracts containing cannabinoids are now considered as Novel Foods’.

Mr Jappie said: “The FSA have a fundamental misunderstanding of the issue. They say ‘hemp is not novel, but CBD extracts are novel’, but they don’t define what a CBD extract is. If hemp is not novel and I squeeze the juice out of a hemp plant, with its naturally occurring levels of CBD, then surely that extract cannot be novel either? “

‘CBD Is Novel’ Say FSA

When CBD Testers asked the FSA why it aligns with the E.U. a spokesperson said: “Hemp seed oil has a significant history of consumption before 15 May 1997, and CBD extracts do not.”

And they referred us to the EC guidance which can be found here;

With Brexit now crystallising Mr Jappie believes the industry and the FSA should work together on a mutually-acceptable solution.

“The problem we have with CBD is that there is not a set of industry standards – and no reference point to say what is a compliant product. There is no requirement on companies to be registered with the U.K. trade organisations or abide by their standards, so it is a bit of a free for all.

“The FSA should engage with the industry and both agree to guidelines on quality, on dosage procedures, on CBD content and that kind of thing, and have everybody agree to abide by those regulations. We should be looking for a light-touch regulatory framework which ensures only quality products are sold, and consumers are protected.”

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Will It Be A Brexit Boom Or Bust For U.K. Cannabis?

A Boris Johnson Brexit looks set to free the U.K. from the regulatory orbit of the European Union (E.U.) and usher in an exciting new era for cannabis.

The freedom to overturn the restrictive E.U classification of CBD as a ‘Novel Food’ is the key potential Brexit win for many. This, and the removal of punitive restrictions on cultivation, could prompt a U.K. cannabis investment boom.

However, some U.K.-based cannabis brands with an international focus fear Brexit could lead to more ‘Red Tape’ – and increased costs.

Novel Food Deters Investment

The Novel Food issue has shrouded the European CBD industry in a cloying cloak of uncertainty for the last year; Brexit could provide an opportunity for Britain to escape its shadow. 

Leading U.K. cannabis lawyer Robert Jappie, who will be joining international Law Firm Ince next month, has first-hand experience of the stasis it has caused. In an interview with CBD Testers he said: “We really need a resolution to the Novel Food issue this year. I am aware of many significant investors who are holding back from the sector because of it.

“They say they want to get involved and then they come back and say ‘we have heard about novel food, and we’ll just wait’. The bigger companies, the likes of Coca Cola and Nestlé, are happy to wait until the regulations are clear before making a move – it’s an issue that needs resolved.”

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‘Not A Good Look’

Mr Jappie believes the U.K will choose to diverge from the existing Novel Food guidelines saying: “The optic of a U.K. regulatory body (Food Standards Agency) saying they are going to enforce non-binding E.U. regulation, in the current political climate, wouldn’t be a good look.” 

He also highlights how a U.K. divergence from the E.U. rules will help deliver the sort of Brexit its supporters crave.

“I think Novel Food is a very easy win for the U.K. government. If the point of Brexit is actually to diverge from E.U. rules they could take the position of ignoring it, and show their backing for the U.K. CBD industry. The clear benefit of the leaving the E.U. for Brexit supporters, is that we are able to diverge from E.U. rules” (which includes cannabis laws of course)

Brexit Not BRINO

Under the previous Prime Minister Theresa May the U.K. set out on a BRINO  (Brexit in Name Only) path which posited close regulatory alignment. Mr Johnson, on the other hand, is said to be looking for a basic free trade deal with the E.U.

In such deals the generally accepted view is that if regulatory alignment is not achieved, ‘mutual recognition’ of each others standards is a suitable substitute. However Brussels’ negotiators appear to baulk at this. 

While neighbours U.S. and Canada trade on mutual recognition terms negotiators in Brussels see the proximity of Britain as ‘too great a competitive risk’.

Some Will Choose To Align With E.U.

Mr Jappie elaborated: “It’s a complex issue. I personally think the E.U. will take a very tough stance and not allow the U.K. to abide by whatever rules it chooses.

“Will the E.U. allow for mutual recognition? Well, here, it looks like it could be trade-off for access to continental markets. The problem for the U.K. is that a lack of mutual recognition will make it more difficult for CBD companies to sell product to the E.U.”

If a mutual recognition agreement is not forthcoming then U.K.-based international cannabis brands, trading in Europe, may need to incur additional costs to align with Novel Food.

An Update On British CBD and the Novel Food Regulations in EU

Food Standards Agency

If Novel Food is dropped there will need to be a change of mindset at the FSA. It has maintained a consistent stance in the last year, and re-stated it earlier this month.

In a statement to CBD Testers it said: “CBD extracts are considered novel foods under food law and we expect companies to comply with the novel foods process, which includes submitting safety information about their products. 

“The FSA is considering the best way to ensure CBD food-related products currently on the market move towards compliance.”

In relation to Brexit a spokesperson said the regulatory landscape for CBD is ‘subject to negotiations on the E.U. and U.K.’s future relationship, which will take place throughout this year’.

U.K. Trade Associations

Peter Reynolds has been campaigning for cannabis liberalisation since the 1970s. He is co-founder and President of cannabis law reform group CLEAR and industry trade group and self-regulatory body CannaPro.

He is urging all U.K. cannabis businesses to lobby their MPs in a bid to sink the controversial Novel Food regulations before they cause further damage.

“Our new trading relationship means we no longer have to follow E.U. rules and the Food Standard Agency can no longer hide behind the European Union. They will now have to explain for themselves and justify for themselves why they are following the European rules on Novel Food,” he said.

Fellow U.K. industry group the Cannabis Trades Association (CTA) has also ratcheted up the pressure on the FSA, as the nation leaves the E.U. In a recent press release Chairman Mike Harlington said it is launching a ‘systematic campaign of political and media engagement to keep the pressure on the FSA not to attempt to enforce any move against the CBD industry, based on the Novel Foods issue’. 

He went on to say any such enforcement could ‘hit millions of consumers who regularly use CBD products’.

U.K. Growing Rules ‘Perverse’

Cannabis cultivators feel hopeful about Brexit changes

Meanwhile, domestic cannabis cultivators are also hoping that Brexit will lead to the removal of growing restrictions. As things stand U.K. farmers are bound by E.U. rules which limit seed types to those with less than 0.2% THC.

There are Europe-wide moves to increase this to 0.3% and there is no reason why the U.K. could not push for the same 1% level as Switzerland – a fellow Non-E.U. country. Lobbying on this will accompany efforts to remove rules enforcing the destruction of both flowers and leaves – the most valuable parts of the plant.

Removing such restrictions would support home-grown medical cannabis and CBD cultivators and spur the growth of the nation’s hamstrung industrial hemp industry.

Mr Jappie said: “If we had designated government department in say DEFRA   (Department for Environment, Food & Rural Affairs) dealing with cultivation, we could set out own standards and become a market leader.”

This view is backed by one of Boris Johnson’s Policy advisers Blair Gibbs, who spoke to CBD Testers last year when he was previously with the Centre for Medicinal Cannabis.

During the interview he described the U.K.’s licensing position as ‘perverse’ and ‘unsustainable’. Mr Gibbs also told CBD Testers that the Novel Food regime is ‘not workable for the U.K. CBD market’.

A Final Thought: Brexit and Cannabis Decriminalisation in U.K?

Mr Gibbs joined the No. 10 team in the run up to last December’s General Election, at the same time as fellow cannabis supporter Danny Kruger. Mr Kruger is now the Prime Minister’s Political Secretary, and he has also called for an end to cannabis prohibition.

With these two whispering in the P.M.’s ear and a growing cross-party alliance of MP’s calling for the decriminalisation of cannabis the mood music in the U.K. has shifted significantly in the last 18 months.

CBD and medical cannabis are now mainstream and many commentators believe we could see major changes over the course of this five-year  Parliament.

*Britain’s exist from the EU will be complete at 11pm on January 31, 2020. It is currently in a transitional period during which existing arrangements apply, and future trading arrangements will be agreed. If agreement cannot be reached then the U.K. and the E.U. will trade on WTO terms.

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First London Stock Exchange Cannabis Listing Imminent

The London Stock Exchange is set to get its first cannabis company with Israel’s Kanabo Research aiming to list on the market later this year.

The listing will effectively be a reverse takeover with U.K. shell company Spinnaker Opportunities PLC announcing its intention to purchase Kanabo this February. Spinnaker was launched in May, 2017, to invest in the emerging cannabis industry. It recently secured £1.4m from an unnamed private investor to invest into Kanabo.

Tim Blythe of London-based Blytheweigh Financial PR, acting for for Spinnaker, told CBD Testers the reverse takeover will allow Kanabo access to London’s capital markets.

Kanabo Looks To raise £4m

Kanabo’s CEO Avihu Tamir says the move will support efforts to raise £4 million ($4.8 million) for clinical trials and the launch ‘over-the-counter’ products in Europe. Mr Tamir told the Reuters news agency he sees better prospects of raising capital in London – arguably the global financial hub – and is looking to secure funds from diverse sectors, such as food and health.

In a results’ statement, in June this year, Spinnaker chairman Andy Morrison, elaborated on how it viewed the booming medical cannabis market, saying ‘barely a day goes by without commentary in the mainstream press’. 

Listing Allows For Cannabis Investments

He continued: “Conferences that in previous years attracted medicinal cannabis enthusiasts in the low hundreds were this year attended by thousands of people, including high ranking politicians, medical pioneers and the professional investment community. 

“Through its proposed acquisition of Kanabo, Spinnaker is at the forefront of efforts to bring the medicinal benefits of cannabis to European consumers, while at the same time enabling investors to participate in the growth of the sector through a public market vehicle.”

CBD Testers understands the new company will trade under Kanabo name. Kanabo’s cannabis research efforts are currently focused on sleep, chronic pain, and anxiety.

Germany Dominates European market

Its patented vaporizer was the first such device to be approved for medical use by the Israeli Ministry of Health. Canadian companies continue to dominate the global cannabis markets and Germany is proving to be the number one destination for these business seeking an additional listing in Europe.

Some say this is due to the uncertainty in the U.K. over its efforts to leave the E.U. and there are also concerns over its regulatory position in particular the Proceeds of Crime Act. A number of cannabis company’s trade on London’s smaller stock markets, such as the NEX Exchange. Companies include The Sativa Group and Ananda Scientific.

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