7th June 2022

Understanding the ABCs of CBD

The growing market for CBD products makes for a fascinating but potentially problematic new area for Trading Standards. Laura Phillips examines the legal context within which the sector operates.


By Laura Phillips
Specialist regulatory advocate at Gough Square Chambers
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There is an obvious commercial incentive for businesses to push the limits of how much THC is present in a given batch
At present there is confusion and disagreement across the industry, regulators and the police about what levels of THC are permissible
Nobody had applied for authorisation for their CBD products because nobody thought they needed to… an entire industry was criminalised overnight

CBD (cannabidiol) is a chemical compound extracted from cannabis. Unlike THC (tetrahydrocannabinol), the other main compound found in the cannabis plant, and the one which is responsible for the psychoactive effects (the ‘high’), CBD is not considered to be illegal under the Misuse of Drugs Act 1971 and associated legislation. It is not the same as CBPM (medicinal cannabis) which is also legal, and available on prescription in very limited circumstances for certain medical conditions. CBD is becoming increasingly popular with consumers based on (at least for the moment) anecdotal evidence that it can help with pain relief and conditions such as anxiety and insomnia.

In the past few years, there has been huge growth in the market for CBD products which are widely available, including from high street retailers. CBD is being used in a range of consumer products in increasingly novel ways. Available products include oils, vape liquids, topical creams, cosmetics, cookies, gum and even sanitary products and dog treats1. The Association for the Cannabinoid Industry estimates that the value of the UK market for CBD products in 2021 was £690m in annual sales.

At the same time the regulatory landscape relating to CBD is developing rapidly. This has been made more complex by the UK’s exit from the EU. There has also been concern and confusion about levels of THC found in CBD products and how to ensure that they are safe for consumers.

All of this has given rise to myriad and complex issues concerning the classification and regulation of CBD products. This article focuses on two: permissible THC levels in CBD products and the regulation of CBD products as novel foods, both of which have been the subject of recent developments.

THC levels in CBD products

When CBD is extracted from cannabis often the extracted product also contains trace amounts of THC. As discussed above, unlike CBD, THC is a controlled drug under the Misuse of Drugs Act 1971 and associated legislation. This means that business or individuals who import or sell CBD products containing illegal levels of THC are at risk of being prosecuted for Class B drugs offences on a commercial scale. There has been at least one attempted prosecution for such offences. Although the police are responsible for regulating illegal drugs, partnerships between Trading Standards and police departments investigating CDB products already exist and are in the author’s view only likely to become more common.

Although it is scientifically possible to virtually eliminate THC from CBD products, this is expensive: whilst it is fairly quick and easy to eliminate, say, 99% of the THC in a given batch of CBD, removing that final 1%, or 0.1%, or 0.01%, gets exponentially more expensive because it means going through the extraction process over and over again. This means that there is an obvious commercial incentive for businesses to push the limits of how much THC is present in a given batch.

At present there is confusion and disagreement across the industry, regulators and the police (who are responsible for investigating and prosecuting drugs offences) about what levels of THC are permissible, not least because there is some debate about which CBD products are exempt from control under Regulation 2 (1) of the Misuse of Drugs Regulation 2001 (the MDR). In particular, there is currently no authority on the meaning of Regulation 2 (1) (c) which requires that ‘no one component part of the [exempt] product or preparation contains more than one milligram of the controlled drug’.

The Home Office’s initial position is that ‘component part of the product’ means the whole product, but unsurprisingly industry disagreed and said that a component part is a dose or serving suggestion. To clear up this inconsistency, in January 2021 the Government asked the Advisory Council on the Misuse of Drugs (ACMD) to recommend a THC limit by weight. The ACMD did this on 17 December 2021, recommending a limit of 0.05 mg of THC per ‘unit of consumption’ (i.e. dose) in consumer products.

This report remains a recommendation and it remains to be seen whether and when the Home Office will introduce any amendments to the MDR.

Food products containing CBD

In 2016 the MHRA confirmed that products containing CBD which meet the definition in Regulation 2 of the Human Medicines Regulations 2012 would be classified as medicinal products and subject to regulation under that legislation. The effect of this is that CBD products for consumption are invariably sold as food or food supplements and regulated under this (less stringent) legislation.

Novel foods are foods which had not been widely consumed by people in the UK or the EU before May 1997. They are regulated in the UK under Regulation (EU) 2015/2283 (‘the Novel Food Regulation)2 which came into effect on 1 January 2018 and the Novel Foods (England) Regulations 2018/154 (‘the 2018 Regulations’).

Prior to Brexit, essentially, novel foods were those which the European Commission had decided were novel foods by listing them in the Novel Food Catalogue. Thereafter any person who wanted to market a novel food required authorisation to do so from the European Food Safety Authority (EFSA). Where products were granted authorisation they were placed on the ‘Union List’.

Enforcement of the Novel Food Regulation remained with Member States, and in the UK, that meant local authority Trading Standards departments³.

In mid-January 2019 the Commission changed its stance on CBD products and amended the Catalogue so that all CBD would be considered novel (in very general terms, previously authorisation was only required to market CBD if the levels of CBD were significantly boosted beyond their natural level).

The UK left the EU on 31 January 2020. To cut a long story short, it wasn’t at all clear whether the UK would stick to the Commission’s view on classification or chart a different course, but the eventual outcome was that the UK decided to stick with the Commission’s view, and in February 2020 the FSA made an announcement that it would be implementing a similar novel foods process for CBD as EFSA had done4. Applications are complex, must be evidence-based and are subject to a risk assessment by the FSA. The FSA estimates that most applications will take at least a year.

This left the problem that nobody had applied for authorisation for their CBD products because nobody thought they needed to. The practical result was that on paper an entire industry was criminalised overnight. Major legitimate businesses were suddenly criminal enterprises with hundreds of millions of pounds of criminal property (sales revenue) being generated every year. To solve this problem, on 13 February 2020 the FSA effectively declared an amnesty and issued guidance to local authorities not to enforce if a product was on the ‘CBD Public List’ which it intended to produce.

The next problem was that it took considerable time for the FSA to set up the CBD Public List. This is at least in part because this is a massive process (the first such novel foods process undertaken in the UK since Brexit). As a first step, the FSA required an application for authorisation of every single existing CBD product to be submitted to them for ‘validation’, following which that product could be placed on the CBD Public List. It is important to note that validation does not mean that a product is authorised; it only means that the product has ‘a credible application for authorisation with the FSA’. A few early validations were made, but the full CBD Public List  was only released on 1 April 2022 (over a year after the FSA’s initial estimated date).

There are currently 57 products with ‘validated’ status on the list, with a further 3,479 ‘awaiting evidence’ (put simply, this means that in the FSA’s view they are ‘progressing well’ towards the requirements for validation).

Where does this leave local authorities in relation to their enforcement responsibilities in respect
of CBD products? Although the FSA amnesty is only guidance, in the author’s view, if a particular product appears on the CBD Public List there is a good argument that it is an abuse of process to prosecute for placing it on the market without authorisation contrary to Regulation 4 of the 2018 Regulations. This argument would be particularly strong where an application has been validated.

That said, the products on the CBD Public List appear to represent a very small number of the products available. Local authorities remain under a duty to enforce the 2018 Regulations in relation to CBD products. If a product placed on the market is not on the CBD Public List then an offence is committed contrary to Regulation 4 of the 2018 Regulations and there is no bar to enforcement or prosecution by reason of the FSA guidance. Such offences are summary only, but punishable by unlimited fine.

Further, CBD products are often mislabelled (also an offence under the 2018 Regulations), may contain unauthorised nutrition or health claims, or may otherwise breach the requirements of food safety and hygiene law. Products that are shown by testing to contain excess THC can be referred to the police for investigation under controlled drugs legislation. There may also, in appropriate cases, be scope for an application for confiscation under the Proceeds of Crime Act 2002. Given the value of the CBD industry, such applications may be very substantial.

In summary, now that the uncertainty about which products are subject to the FSA’s amnesty has been resolved, this is an area that local authorities would be wise to turn their minds to, if they haven’t already. Given the vast numbers of products available, the speed at which they have come onto the market, and the past uncertainty about enforcement, there are likely to be widespread issues. There are already a number of major novel foods criminal investigations underway.

About the author

Laura Phillips is a specialist regulatory advocate at Gough Square Chambers with a broad practice encompassing consumer law, food standards, health and safety, fire safety and environmental law. For further information, contact lauraphillips@goughsq.co.uk

1 No comment is made as to the benefits, legality or even safety of all such products.

2 This remains part of UK law under the European Union (Withdrawal) Act 2018.

3 Regulation 3 of the 2018 Regulations and Section 5 of the Food Safety Act 1990.

4 There is at least some debate about whether the EFSA, and the FSA, are right to classify CBD as a novel food. No court, European or domestic, has ruled on the issue. The debate is, however, now almost certainly academic. It would take an extremely brave court to overturn what has been the settled position of the Home Office and the FSA for more than two years, and the entire scheme of regulation that has been developed in consequence.

 

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