Will Brexit be a Golden Opportunity for UK-Based CBD Businesses?

6th August 2020
By Roland Sebestyén

Although the United Kingdom left the European Union on 31 January, it is currently still in it’s agreed-upon transitional period until the end of this year. The two sides are now negotiating a trade deal which will clarify their future relationship. At the moment, neither the public nor the CBD industry know what to expect. However, experts project that Brexit might, in fact, offer a golden opportunity for CBD businesses.

CBD is one of the most common chemical compounds found in the cannabis plant. It is classed as a cannabinoid, along with THC. However, CBD, on the contrary to its cousin THC, does not cause the ‘high’ often associated with cannabis.

It is a naturally occurring chemical known for its supposed health and wellness benefits. Among its reported benefits are its ability to reduce feelings of anxiety and depression, its anti-inflammatory properties, and its ability to ease the symptoms of spasticity-related conditions.

That is why the looming decision of the European Commission (EC) to class CBD as a narcotic, rather than a novel food, has sparked fury in the industry.

According to the UK government, “novel foods are foods which have not been widely consumed by people in the UK or EU before May 1997. This means that the foods don’t have a history of consumption.”

An EC spokesman told Foodnavigator that they had “doubts about CBD”:

“For the moment, the preliminary analysis says that it could not be qualified as food but it’s not a final decision.”

So, long story short, if it’s classed as a narcotic, it won’t be able to get through the EU’s Novel Food process – cutting off hundreds of products and businesses from the market.

What is it going to be then?

It must be stated that the UK, as a member of the EU, has adopted a number of EU rules and regulations. Brexit would mean that, depending on the agreement, this won’t be the case after 31 December 2020.

Although some believe Brexit will hit the UK economy hard, others are convinced that the CBD industry could be one of the few that clearly benefit from the country’s departure from the trade block.

A Spokesperson for The Association for the Cannabinoid Industry told Canex that the UK Food Standards Agency (FSA) would have their own novel food authorisation process, therefore, CBD businesses would be able to be granted license much quicker.

They told us: “It could offer a golden opportunity. The most direct change will be the UK removing itself from commitments to the European Commission.

“EFSA has just announced that they are putting all novel foods applications on hold until the EC decides whether CBD should be classified as a narcotic. If they do, CBD would become a controlled substance in Europe.

“FSA and the UK Home Office say they do not think CBD is a narcotic so this offers a great opportunity to companies wishing to sell in the UK.”

Liz McCulloch, Director of Policy for Volteface, added:

“If the UK continues to take the view that CBD is a novel food, while the EU treats it as a narcotic, this will pave the way for the UK to have one of the more liberal regimes in Europe and a comparatively lucrative market.

“The government should capitalise on this opportunity by introducing policy reforms that will build a domestic CBD extraction industry and make the UK a hub of research and development.”

Freedom

Experts believe that, if the FSA said that CBD was indeed a novel food, then it would see the UK a global leader of the CBD market post-Brexit.

The ACI spokesperson said: “The main point is that the CBD has to have a novel foods validation from the FSA by 31 March 2021. Without that, the raw material or finished product would not be legal to sell in the UK.

“After Brexit, the UK will have more control over its domestic hemp market, ideally CBD products sold in the UK and beyond will also be grown here in the future.”

After all those years of debating and fighting, there might be an area that would benefit from Brexit.

It may not be 100% certain, and there is still an awful lot to do until 1 January 2021, but if the UK plays their cards right, the CBD industry might be able to flourish in the upcoming age of uncertainty.

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About the Author

Roland Sebestyén
Roland Sebestyen is a Hungarian journalist with over six years experience in the field. He has worked for some of the most popular, independent national newspapers in his country. In 2019 he moved to Sheffield to study on the NCTJ-accredited MA journalism course at the University of Sheffield. Roland is now a news and feature writer for Canex.

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