Cannabis – a growing and complex area of the law
The law around cannabis is a growing area. Several London based law firms with burgeoning practice units already dedicated to the legalities surrounding the cannabis market have started to recruit cannabis experts. And it’s not just lawyers who are getting involved. The estate agent Savills recently announced that it is teaming up with a cannabis consultancy and a greenhouse builder to create a new joint venture that will offer advice for cannabis growers, helping them navigate the complex regulatory framework.
The cannabis market has grown significantly and is now estimated to be worth around $150 billion annually, thanks to its gradual legalisation. In Canada, cannabis has been completely legalised, while in many other countries, it has been legalised for medicinal use.
The rise of CBD products
It would also be difficult not to notice the increasing number of CBD products on the market in the UK. CBD (Cannabidiol) is one of the compounds of the cannabis plant, which, in its pure isolated form, does not contain any psychoactive ingredients. Extraction and marketing of CBD as a separate product is recent. However, CBD is now present in a vast range of products from oils and creams to foods such as chocolate, and drinks. With reputed calming, anti-inflammatory and other beneficial properties, it is particularly popular in the wake of the current trend for wellness products.
It therefore comes as no surprise that companies are keen to invest in this area. We have already been approached by clients who are looking to tap into this market but who need help navigating the legal framework.
In the UK, cannabis, cannabis resin, cannabinol and cannabinol derivatives are controlled drugs, which means that their cultivation, production, supply and possession, is only permitted under a Home Office licence. CBD in its pure isolated form is not a controlled drug. However, CBD will be presumed to be a controlled drug on the basis that is so difficult to isolate it from other controlled parts of the cannabis plant (such as THC). That means, anyone importing, producing and selling a CBD product has to be able to demonstrate that it meets the exempted product criteria in the legislation.
A further hurdle must be overcome if the CBD product is intended to be ingested. The European Food Safety Authority classified CBD as a novel food in 2019, which means that it must undergo an authorisation process before it can be legally marketed in the EU. Novel foods which have been authorised are on an EU list of authorised novel foods. There are currently no CBD products on the list, which means that none of the CBD products on the market has been authorised.
The regulators north and south of the border have been slow in confirming how enforcement in this area will be tackled as CBD products continue to flood the market, but a recent announcement by the Food Standards Authority, which is the regulator for England and Wales, sets a clear deadline for industry. The FSA previously stated that it would work with stakeholders to take a proportionate approach; however, the new guidance states that ingestible products containing CBD must be authorised as a novel food before 31 March 2021 or they will be taken off the market. While Food Standards Scotland has not imposed the same deadline, it has told food business operators to take immediate action to obtain authorisation as a novel food in relation to any CBD products that they sell.
How can we help?
Breaking into the CBD market, while lucrative, is not as easy as it might seem and requires careful consideration of the regulatory regime. The consequences of getting it wrong could result in products being removed from the market and criminal sanctions. We are here to help guide you through the regulatory regime. Whether you are interested in investing in property or a business or developing a business or product in this area we have experts who can advise you on the steps you need to take at every stage.
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