CBD Awaits EU Novel Food DecisionAn industry anxiously awaits a decision on the fate of CBD in Europe.
The CBD market in Europe has reached a pivotal moment in its evolution. Europeans are now familiar with and curious about CBD’s therapeutic value. Paired with a robust hemp industry, market analysts predicted expansive growth on CBD oils, extracts, and pharmaceuticals over the coming years.
But, the CBD industry is facing a significant and potentially disastrous barrier to growth. Recently, the European Commission reevaluated cannabis extracts, including CBD. The regulatory body proposed labeling CBD as a Novel Food, which will have a substantial impact on who can produce, develop, and sell CBD-based products. Everyone in the industry is holding their breath.
CBD as a Novel Food
According to the regulations outlined by the European Commission, a “Novel Food” is food that was not consumed by humans in the EU before 1997, when these regulations came into play. The Novel Food classification covers new production methods, unique creations, and foreign foods from outside the EU. A Novel Food regulation is driven by a need to keep consumers safe, label products properly, and to maintain the nutritional profile of replacement foods.
In 2018, the European Commission updated the Novel Foods Catalogue, making a subtle yet industry-shaking change to the hemp and CBD sector. According to the revised classification, hemp seeds and hemp seed oil products are not Novel Foods, but all other cannabis/hemp-based products, including CBD, pulled from the flowers, leaves, and extracts require Novel Food application.
The European CBD industry, and therefore more broadly the hemp industry, has been on an upward trajectory for the last few years. Although the industry is small compared to the wild American CBD sector, the Brightfield Group projected 400 percent growth until 2023.
The Novel Foods reclassification has put an immediate damper on this burgeoning industry’s growth, as it places a significant regulatory and financial burden on individual producers across the EU. Now, a once rigorous sector is plagued by uncertainty. Some analysts expect small to medium-size producers will fold should the EFSA finalize this decision.
CBD as a Novel Food: The Debate Across Europe
Whether or not CBD, and cannabis more generally, should be classified as a Novel Food is a topic of hot debate among several of the continent’s leading cannabis advocacy groups in the region.
Cannabis Trades Association (formerly Hemp Trades Association) issued a press release in September 2019 officially confirming it will not be applying under the Novel Foods application. In its view, cannabis extracts are not Novel Food. Much of its frustration stems from the requirement to remove members’ products from the market until a decision has been reached on CBD’s reclassification. With no deadline in sight for this decision, it would place a significant financial burden and much uncertainty on its members for the foreseeable future.
What the Cannabis Trades Association failed to mention in their press release is the cost of the application process. Other cannabis business associations have launched into a group application process, like the consortium led by the European Industrial Hemp Association (EIHA), to combat the prohibitive costs.
As per a report, the EIHA estimates a single application for CBD’s Novel Food designation would require upwards of €300,000. But, through its consortium, they are keeping it under €50,000 per brand (depending on the size). However, even the EIHA believes that the European Food Safety Authority (EFSA) is incorrect in its sweeping identification of CBD as Novel Food.
According to EIHA research published in 2019, there is a long history of cannabis use, production, and extraction going back centuries in Europe. In their opinion, only isolates and synthetic cannabinoids should qualify as Novel Foods.
An Entire Industry Holding its Breath
With the recent rise in CBD sales and curiosity across the continent, it’s perhaps not surprising that the EFSA reevaluated its stance on CBD in foods. It must have appeared as if CBD became an overnight sensation in the slow-moving world of international regulation. One day it was a fringe ingredient, and the next, it’s popping up in every consumer good that matters.
From the standpoint of the EFSA and the European Commission, cannabis and it’s derivatives are still poorly understood — especially compared to other common supplements and ingredients destined for food. CBD and other extracts require much more intensive investigation.
CBD Plagued by Uncertainty and Lack of Regulatory Oversight
In the EU, a region already extremely cautious about all things cannabis, the Novel Foods decision was designed to prevent the explosion of unregulated, untested CBD products as has been witnessed elsewhere. In a certain respect, it places CBD producers in the EU in much the same position as the Food and Drug Administration has done to the US markets.
The lack of comprehensive regulation has produced an industry that is left operating in a legal grey area. The CBD sector is a highly speculative business, as nobody can predict what the FDA or the EFSA will decide (or when). Waiting on the decision of these national and international regulatory bodies puts the hemp sector into purgatory.
With no official decision, is it wise to plan for growth, conduct research and development, and invest in any meaningful way? An anti-CBD decision by the EFSA or FDA could spell disaster for a nascent industry.
Until the EFSA clarifies its position on CBD within the Novel Food Catalogue, the potential growth of the CBD industry in the EU will remain measurably limited. It could be months, even years before the final decision comes down. But which companies can afford to keep their CBD-based products and ingredients off the shelf until then?