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The Impact Of “Novel Foods” On Cannabis In Europe

Marguerite Arnold

January 14th, 2019

Policy

In late December, the news that the Austrian Minister of Health ordered businesses to immediately stop selling CBD infused food and cosmetics is a sign that this much heretofore misunderstood if not muted discussion is very much in the room not only in Austria, but also across Europe.

A Brief History of The Modern European CBD Market

The commercial CBD revolution has certainly hit the continent since the German medical market began to enter legitimacy in March 2017. However, as of the end of 2018, for all the exciting advancements logged over the last two years (see Switzerland in particular), there are also large and looming clouds on the horizon.

The fact that this move comes despite no new legislation to trigger it domestically is also a sign of how widespread this conversation actually is at the policy level across Europe, despite many attempts to downplay its significance by the burgeoning cannabis industry. While Austrian products made from the whole plant were not affected by the new decision, every extract and product which contains the same is.  As a result, all CBD extract-containing products are now in the crosshairs of this debate.

Further, the fact that in Austria, cosmetics are on the table too (a new and disturbing wrinkle for the industry) is also a sign that policy is catching up with a scientific understanding of delivery methods. Cannabinoids of course, can be absorbed through the skin.

However this development is hardly a surprise. The same issue also showed up in Spain in 2018, with the police literally raiding shops and taking product off of shelves. The new hard line taken in Austria means that this debate will probably show up in other places as the industry becomes large enough to actually regulate. And cannatech increasingly shows up across a spectrum of products – starting with delivery methods and beverages.

The fact that a commercialized industry had also already established itself in Austria, with an annual estimated industry revenue of 150 million euros last year is also a direct hit not only to the Austrian tax-paying, legitimate CBD business sector but far beyond it. Namely, this is actually a direct attack on the same argument that is being used to advance reform in other places. Reform, regulate and tax, in other words, might be a simple and effective slogan exported from the U.S. On the ground in Europe, however, this has already hit snags. And is of course, far beyond any one country’s CBD policy, another sign that the full recreational discussion (including THC) will take longer than advocates if not the commercial industry had initially hoped and so far projected.

So far, at least, the success of the Swiss CBD market over the last two years, has certainly driven the discussion other places because of the inherent tax value of the cannabinoid market to the government. In 2018, however, two years after this first began to bloom, the brakes are clearly being applied from the perspective of consumer safety.

Worse, at least for the industry itself, it is not just showing up in Austria.

What Is A “Novel Food?”

While the concept is essentially unheard of in the U.S. if not Canadian markets (although CBD regulation and labelling is clearly in the room in such countries as well as the UK), this is a big hurdle for the entire industry to overcome as things continue to develop in Europe.

Why?

A novel food, under European regulation, is a food that has no significant history of consumption in the EU prior to 15 May, 1997. That means that all things cannabinoid, are, by definition, affected. Further, this means that businesses must submit time consuming and expensive applications in every European country they plan to sell in.

And here is the biggest issue. While CBD oilis no longer prohibited, extracts are a very different animal.

Why?

Cannabidiol extractsare specifically included in the EU’s novel food list, which means that individual countries can set their own policies on the same. And the fight is likely to be, as a result, drawn out until European-wide policy on the same is finally amended. That said, with the pharmaceutical conversation on the drawing board, not to mention the coming impact of nanotechnology (all cannabinoid infused beverages) on the entire industry, don’t expect this to come soon, or be uncomplicated. Much less inexpensive.

Bottom line for all things CBD extract laden? Until CBD is registered in the Novel Food catalogue, consumption of anything with an extract (from food and beverages to supplements), the safest position for producers is to focus on products that are external use only. And even here, because cannabinoids can be absorbed by the skin, as in Austria, this is now dodgy territory for just about everyone. And just about everywhere.

With CBD producers looking for cross European distribution, this also means that issues like licensing and labelling costs are likely to become a major impediment to the same. Switzerland is the only country on the continent where this discussion has gone smoothly (and they are not in the EU).

Just like medicinal cannabis, in other words, major licensing, labelling and registration issues loom large. Not to mention a patchwork of changing legislation across individual countries that can be independently interpreted by sovereign governments. Further, and this is also another new twist to business development long term, will clearly be defined less by the cannabis legalization discussion and more by consumer and patient regulation far beyond it.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Marguerite Arnold

Marguerite Arnold is a veteran investigative and markets journalist, American expat and author. She has covered the cannabis industry from Germany for the last six years. Her book, Green: The First Year of Modern American Cannabis Reform about the American market in 2014 has just been republished as she is writing the sequel about Europe and the global revolution this year. Green II: Spreading Like Kudzu will be published in 2020. She is also a noted technologist and entrepreneur. Her blockchain-based digital prescription platform MedPayRx was just shortlisted by the German Ministry of Health as one of the "Top 20" use cases for blockchain in healthcare.

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