The politics of CBD regulation in the UK

As the UK awaits the verdict of The European Food Safety Authority on whether CBD is ‘safe,’ Medical Cannabis Network caught up with food regulation specialists Katie Vickery and Katrina Anderson of Osborne Clarke to discuss the implications of the landmark decision.

A ‘novel food’ is any ingredient which was not widely sold for human consumption within the European Union before a specific date in 1997. This doesn’t mean that it cannot be sold, however authorisation must be sought from the European Food Safety Authority (EFSA) to determine its safety through rigorous scientific testing. Many novel foods are foods which were historically common or typical in other parts of the world such as quinoa or chia seeds and were later introduced to the European market, with authorisation being relatively straightforward; however, CBD may rock the boat.

In Europe there is a presumption of safety, so anyone can establish a food business and put their products on the market with the assumption that all laws are being complied with – however when it comes to unusual ingredients there is a process to be followed to ensure companies are cleared to use them. In the case of CBD this is controversial, simply because it may well have been potentially consumed prior to the deadline date – but not necessarily legally.

Here MCN speaks to Katie Vickery, Head of Food & Drink at Osborne Clarke, and Associate Katrina Anderson about the potential impact of the long-anticipated decision, how it could potentially change the landscape of the UK CBD industry, and of course the implications of Brexit.

What is the background to the EFSA’s decision to classify CBD as a novel food and how are products or ingredients classified as novel?

Specifically, the questions around CBD started with a decision by the European Commission (EC) to update the novel food catalogue, which outlines different food ingredients and specifies whether or not they are likely to be considered novel.

If you were unsure for example, you could check this catalogue for guidance. It isn’t legally binding, it’s more like an information point; however, when CBD was added to the novel food catalogue, it raised the question of whether CBD needs to go through the novel food application process.

Previously, everyone was proceeding on the basis that it had been consumed prior to 1997 and therefore did not require such authorisation, but all of a sudden, an official EU body was seemingly expressing an opinion that an authorisation is required. That kick started a whole discussion and caused some panic initially – we received quite a few emergency phone calls! It also created quite a dilemma for the regulator. Suddenly we were in a situation where CBD was being used in hundreds of food products – from alcohol to coffee – with many people jumping on the trend that consumers were clearly very interested in.

So, what is the Food Standards Agency (FSA), the UK regulator, to do? It now has a situation where CBD is classified as a novel food, so those businesses who continue to manufacture that product should really be applying for novel food approval.

In May 2018, the FSA made a statement on its website outlining that it would deal with this in a proportionate way, but in reality this means that it is waiting to see what is going to happen with EFSA when it provides an opinion on the first novel food application. That will likely determine the course of action that the FSA takes, or what the FSA will need to do about the products that are already on the market.

We know that a novel food application has been submitted to EFSA. When EFSA eventually announces its opinion, the application must then go into the European Commission and be approved. That may just happen, but there may also be political reasons why even if there’s a positive approval from EFSA, it doesn’t get approved by the European Commission. If it goes all the way through and is approved, the FSA can relax to a certain degree because CBD would be officially approved as a novel food. Providing that the products on the market meet the conditions attached, then nothing further needs to be done.

On the other hand, if EFSA announces that either it doesn’t think it’s safe, or (and this is probably more likely) it doesn’t think there has been enough scientific evidence submitted for it to make an assessment of whether it’s safe, we would be back in the current situation where there is no approval and those products are continuing to be sold with a novel food ingredient which is not permitted.

Would the products need to be withdrawn or would there simply be more regulation?

The short answer is we don’t know. As it stands, the regulator has simply said that it would pursue a proportionate approach to enforcement – but it has used the word enforcement. In any case, if we are still in the EU at that point it is unlikely to go against the European position.

Being realistic regarding the enforcement issue, the FSA and local authorities have limited resources to hunt down every single company that has a CBD product on the market. If it decides to take a strict view on enforcement, what is more likely to happen is that it will select a handful of companies – probably the ones who will make the biggest splash in terms of a headline – and make an example out of them.

What is quite interesting – and we know this from conversations with clients within the industry – is that seemingly a lot of the big players within the industry have been very conscious about launching CBD products because of this uncertainty. As a result, the numerous products available tend to come from smaller businesses and start-ups.

On the one hand, they could launch products and hope that EFSA and the European Commission approve CBD, in which case they have the first mover advantage and are more likely to be successful. Alternatively, they could be spending a lot of money on a product launch only to then be told they can’t proceed, or even have to withdraw the product from the market. It is a difficult choice not to be taken lightly.

In the longer term, it’s likely that someone will get an authorisation through, probably one of the big players. The question is also, do they pursue an authorisation at this point? Even the fast track procedure takes around 18 months to complete; one organisation, Cannabis Pharma, was promised a decision in March of 2019 which still has not happened at the time of writing. The likely cause of this delay from EFSA is the unusually political opinion that it is having to form, compared to most other safety assessments it may carry out.

Some of the delay is also likely to do with the nature of CBD and means that anyone who wants to apply for authorisation must be prepared that EFSA is not going to complete this in the shortest amount of time possible. It will be a very difficult and complex process, not to mention it may ultimately decide that the science submitted in the application is inadequate.

In many ways it may suit EFSA to declare that the data is inadequate and therefore the assessment couldn’t take place. It rigorously tests all food questions from a scientific perspective and doesn’t just ‘rubber stamp.’ It carefully looks at food ingredients and food products to ensure that they are safe and make sure that any claims made are in fact accurate. EFSA has even faced criticism in the past for approaching this process in a way that is akin to evaluating a pharmaceutical or medical product, applying almost the same amount of rigour. Therefore, it wouldn’t be unusual for it to respond that there is a lack of scientific data, as decisions on this basis are not unheard of.

Interestingly, in America the Food and Drug Administration (FDA) held a meeting last year between various industry and trade bodies and legislators to discuss CBD. The result was that nobody could provide any confirmation about its safety, as there are too many unknowns on all sides which makes it difficult to argue that it is either safe or unsafe.

Although this element of uncertainty is accepted, it does pose a problem because there is no official guidance at all, yet more and more products are being developed and released.
One development which arose as a result was the Senate majority leader Mitch McConnell asking the FDA to produce temporary guidelines on how strictly it will enforce the rules concerning products containing CBD.

It will be interesting now to see how the FDA responds, because if a regulator issues guidelines – even on a temporary basis – it sets a precedent and at least begins to create some structure within the industry. It could also become more significant considering that markets that don’t have a framework in place will look for guidance from other markets.

How is EFSA working to determine the safety of CBD and what exactly does this process entail?

Firstly, an application is submitted along with a dossier of the relevant science and this is reviewed by EFSA’s own scientists. EFSA splits its scientific teams into different subgroupings and panels so it has separate bodies that report on the different work that EFSA does. It has a comprehensive body of scientists from all over the EU, which is currently one of the big issues surrounding Brexit because with a no deal Brexit, the UK would lose its access to EFSA. This is potentially a huge problem, because it would fall to UK regulators to be able to provide those services. Given that we haven’t needed these resources since the 1970s, we have a much more limited pool of people and very limited infrastructure.

It is a very methodical process in which the scientists assess all the data and provide a view on each kind of research report, whether they feel they can rely on it not, why that is and what they have drawn from it. Some example responses would be that they have discounted X study because the sample size was very small, or it only evaluated people aged between 60 and 75 but the application is for the entire population. The scientists go into detail about why they conclude an ingredient is or is not permissible and the details very much inform any conditions they may decide to apply. Any approval may be subject to stipulations on labelling and how the ingredients are listed, and warnings or dosage advice and limits on quantities.

This process does not even consider health claims, which are a very different process. Health claims still also go through EFSA but require a different application and approval and that hasn’t even started yet and cannot start until CBD is approved as a novel food, so it might be another 18 months before a CBD health claim is approved.

Health claims are interesting because people are very attracted to the perceived therapeutic benefits of CBD. However, from a food law perspective, when companies make a claim that their product is going to somehow benefit the consumer from a health or physiological perspective, then again, this needs authorisation from EFSA which requires scientific evidence. EFSA would then assess this and decide whether the claim is in fact substantiated by the data, before authorising the claim.

To avoid the need for applying for authorisation for a health claim, many products on the shelf don’t make any health claims. Instead, they simply state that the product contains CBD, but that does lead to consumers not understanding what CBD does and does not do. Not much is being said about this in an official capacity; it has been in its own grey area for some time but the decision to update the novel foods catalogue has muddied that even further.

If the verdict is that CBD is ‘unsafe,’ what effect is this anticipated to have on the European market? Would there be any immediate aftermath prior to compliance measures and regulationbeing implemented?

There wouldn’t be a need for any new regulation to be implemented as it simply wouldn’t be permitted if it doesn’t gain approval. Conversely, some of the cannabis trade bodies have challenged the inclusion of CBD in the novel foods catalogue. There is nothing definitive on this but whether something requires a novel food authorisation or not is a matter of fact. It is simply a case of whether the ingredient was on the market before the cut-off date or not. If a case does end up in court, it could be either as a result of a challenge to EFSA policy or the result of a prosecution. It would all depend on the company being able to prove that they have evidence that the CBD was on the market before the date and therefore the authorisation is not required.

As previously mentioned, updating the novel foods catalogue does not change the law, but it is the opinion of an extremely authoritative body so it would be a (fascinating) challenge to fight in court. We don’t know the details of the evidence they claim exists but whether it is strong enough to persuade a court is quite a complicated legal assessment. It is fair to say that some companies may indeed have some evidence that CBD existed before the date in 1997, but it could well be insufficient. They may feel it is very strong, but once in front of a court it might just fall at the first hurdle.

It has been previously noted that the UK CBD market is largely unregulated. What response can we expect from the Food Standards Agency should CBD be deemed unsafe?

In some ways, the Brexit angle is important to consider here. Assuming we leave on the 31st of January [the default position at the time of writing] the novel food regulation becomes UK law, so it doesn’t disappear. Of course, from that point onwards we could seek to diverge.

It may be the case the UK government looks at the existing policy and decides that it doesn’t agree with the novel food catalogue and doesn’t move forward with any enforcement. The catalogue is not law so presumably the FSA could simply update its catalogue, but it would be unchartered territory. There is at least the possibility of a divergence from Europe on this point and it may be seen as an opportunity for the UK to distinguish itself from Europe. This is more likely if the US decides that it is safe, continues to sell it and issues some guidance.

It would be for the FSA to decide how it wants to address it – which wouldn’t be an easy decision. It may try implementing a voluntary code, which is now a common approach as they continually try to do more with fewer resources. Interestingly the Cannabis Trade Association is already proposing such an approach.

Alternatively, it could come to an agreement together with the industry to introduce rules and give them a period of time to sell through their existing stock. It may also depend on the nuances of EFSA’s opinion, because there’s a difference between an EFSA opinion which fundamentally states CBD is not safe, to one which says there isn’t enough evidence to assess it but the evidence available suggests that it is probably fine. The latter might encourage the FSA to be a little more relaxed and opt for a slower withdrawal of products or implementing a voluntary code. Therefore, the tone of the opinion rather than the opinion itself could inform the next steps. The FSA may also be influenced by the position of industry and trade associations. In particular the Cannabis Trade Association has publicly stated that it is willing to litigate any attempts at enforcement.

Unfortunately, CBD isn’t very well understood from a food perspective and many people are completely unaware of the upcoming decision. CBD is seen as the latest ingredient to try and there are many startup companies who have decided to start including it as an ingredient or producing supplements.

The regulatory regime is not well understood and by the time anything has caught up to it, the landscape has changed and advanced again. It is a bigger problem for the small manufacturers compared to the larger companies as they have the internal expertise to expect regulation at some point. This is an industry which is populated by startups that are operating in complete innocence and genuinely believe in the benefits of CBD. They can be quite horrified at the notion of safety assessments and authorisations as it something they perceive to be very safe, beneficial and natural.

The nature of the industry will also inform the FSA’s approach; it will feel differently about the smaller operations than the big corporate businesses who it may feel should know better. That doesn’t necessarily mean that if it is found to be unsafe that it will continue to be allowed to be sold on the market, but it will probably hesitate to be too harsh in enforcing this at least initially.

Conversely can we expect to see any changes if EFSA finds that it is safe? Do you anticipate any regulation and reform whatever the decision turns out to be?

We are definitely expecting some kind of conditions on the authorisation which might lead to reformulations, but in a general sense it should provide some certainty so that the industry can move out of this grey area. However, it would then take us to a place where they would be looking at the claims people are trying to make that are associated with CBD, so it provides certainty on the one hand but there would still be a lot of regulation to get through. The entire reason for people putting CBD into products is because they want to be able to make the health claims, so this would be the next issue to address.

Do you anticipate a lot of the smaller sort of outfits might struggle if there are requirements? I can imagine that’s going to incur quite a lot of cost, do you think it would reduce the number of products available quite significantly?

It would really all depend on what the requirements are and how long people are given to make the changes. If it is simply a labelling change then usually there would be a transition period of around six months to a year, or even longer, so there is enough time to implement it for the next print run.

Reformulation would be more complicated if it were to affect the flavour or texture of the product. This may cause some issues, but companies do reformulate their products regularly so that wouldn’t necessarily incur huge costs, providing there is plenty of time for companies to implement the changes. If the requirement is that the CBD content is capped and the limit is much lower than what is already on the market, it could require quite a significant reformulation which would also impact on customer experience and interest in the category. If the limit is so low that none of the purported benefits can be experienced, then that would be a significant issue.

The novel foods application is confidential until it is released so nobody knows what type of CBD has been submitted for assessment. If a company uses a different type of CBD to the one which is in theory approved, then their position really hasn’t changed all that much. However, it would provide some hope that future applications may well succeed. This is an area where there are many more questions than answers and which is not very well understood in terms of the official position, so it’s very interesting and significant.

1 The details within this article are correct at the time of writing

Katie Vickery
Head of Food & Drink, and Partner
Katrina Anderson
Associate
Osborne Clarke
+44 (0)20 7105 7000
Tweet @OsborneClarke
www.osborneclarke.com/contact-us/

This article will appear in the first issue of Medical Cannabis Network which will be out in January. Click here to subscribe.