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Efforts to crack down on the sprawling market for CBD oils, tinctures and edibles have put UK regulators on a collision course with cannabis start-ups, after companies found themselves confused about the new rules.
The Food Standards Agency last month published a list of 3,500 ingestible products with CBD — a cannabinoid that does not leave users stoned and can be sold over the counter — that are in the process of gaining approval for sale.
Any products not on the list should be immediately withdrawn from sale in the UK, the FSA said at the time. No new products have been allowed to apply if they were launched after February 2020, a cut-off date set by the regulator.
But the UK food watchdog was this week forced to reopen the process after it received a deluge of late applications from companies hoping to keep selling their products. It said the information “should have been provided to us much earlier”. The regulator will update the list twice more but will not add any more products after June 30.
The UK is the first country to regulate CBD in food. Steve Moore, founder of trade group the Association for the Cannabinoid Industry, said: “The process of transitioning hundreds of companies and many thousands of product lines from the grey market to one that is legally regulated was always going to be complex.”
He added: “It’s obviously a concern that a new deadline has emerged but it is reassuring that the FSA are adamant that this is a ‘hard stop’ deadline and that the requirements to make the list remain unchanged.”
More than 900 applications were lodged for FSA approval but just 70 made it to the next stage of analysis, meaning that potentially thousands of products and brands linked to unsuccessful applications are due to be removed from sale.
The market for CBD, which is touted as a relief for ailments from anxiety to joint pain, has boomed amid a consumer craze for wellness and healthy lifestyles. This year it is estimated to exceed €3bn in Europe, according to cannabis consultancy Prohibition Partners.
Sales of products containing CBD, which as opposed to its psychoactive relative cannabinoid THC is not classed as an illegal drug, started to accelerate a few years ago alongside the growth of the legal industry for recreational and medical cannabis.
London-listed Cellular Goods, in which retired footballer David Beckham owns a 5 per cent stake, is among the companies whose products have been rendered non-compliant.
Having initially told investors that it was able to continue selling its ingestible products, the company was forced to make a U-turn days later as it admitted that some of its products had been launched after the FSA’s cut-off date.
On Friday, Cellular Goods, which raised £13mn in a market flotation in February last year, was continuing to sell its products online in spite of the FSA’s decision. But in the evening it put out a market update confirming that Trading Standards had told it to suspend sales “with immediate effect”.
Anna Chokina, chief executive, said the company was “disappointed by the FSA’s stance” and believed that its products were safe.
The FSA’s crackdown comes after reports that CBD products are not always what they claim to be. A study in 2019 by the Centre for Medical Cannabis found that CBD products sold in the UK were of “a wide range in terms of quality” with some containing less of the cannabinoid than claimed, or none at all.
Moore said the unregulated market for CBD, used in products from skincare to food supplements, had nurtured both “dodgy consultants and dodgy companies”.
Tony Calamita, chief executive of Love Hemp, which sells CBD edibles and skincare, said “for many years there have been a lot of cowboy products on the market”, but regulation would now protect consumers.
He described the publication of the list an “incredibly positive step for the industry” but said the length of time the FSA had taken to publish it had “pushed a lot of companies out of the market or stopped them from launching new products”.
Antonio Costanzo, chief executive of one of Europe’s largest cultivators of cannabis, Curaleaf International, said the FSA list was “the starting point to get some clarity on how we can bring [new] products to the market”.
Retailers Boots and Holland & Barrett told the Financial Times that they were taking steps to remove unlisted products, while Amazon and Superdrug said they were still reviewing the list.
It is unclear, however, who will ensure that the FSA list is being adhered to. The watchdog relies on local authorities, which it says are also responsible for online sales, to enforce its regulations.
The Local Government Association said that because of “significant capacity challenges in local regulatory services generally, councils are likely to target their work on this according to intelligence about non-compliance”.
Stephen Murphy, co-founder and chief executive of Prohibition Partners, said there was “no clear enforcement” of the new rules on CBD and that many companies which had not made the list were likely to review their “risk appetite” and consider trading as before.
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