Inside Europe’s booming and chaotic CBD market

By Shane Starling

- Last updated on GMT

©GettyImages/LPETTET
©GettyImages/LPETTET
Europe’s cannabidiol food and supplements market was on display at a recent CBD expo in Berlin, with CBD supplement and cosmetic manufacturers reporting impressive margins in a controversial category defined by booming sales and baffling regulations.

“We can’t meet the demand we have at the moment and there are many other producers with the same status,” ​Slovenia-based Pharmahemp’s chief regulatory affairs officer, Dr Marjeta Česen, said from the show.

Eight-year-old Pharmahemp is one of the oldest and biggest European CBD players – and one highly concerned about the potentially damaging effects of a gung-ho, grey market.

“The market is full of CBD products that fall into ‘grey zone’ and it is obvious the demand is so high that authorities cannot follow all the companies selling such products,”​ Dr Česen said, adding pharma-style registrations could be one way to clean up the market.

Also at the show was Matthias Schedl, from AnnaBlume in Austria, which prides itself on full-spectrum, organic CBD extracts. He agreed. “There are a lot of quality problems.There are too many manufacturers. Some making good quality, some making bad quality.”

Other products spotted at the expo included cannabis energy drinks and hemp protein powder.

The classification quagmire

Cannabis Energy drink

As it stands, most CBD sources are classed as unauthorised Novel Foods in the EU as there has yet to be a successful CBD application to the European Food Safety Authority (EFSA). (The whole industry is watching and waiting for EFSA’s verdict on one major pending application from Czech firm Cannabis Pharma.)

The EU Novel Foods stance has proven open to interpretation by Member States – along with interplay with other legal realms like cosmetics and pharmaceuticals – and thus creating a state-by-state legal quagmire.

In some countries like Germany and the UK, CBD oils and supplements can be found in pharmacies, health stores, supermarkets and CBD stores, sometimes classified as cosmetics or fragrances.

Enforcement actions have included Austrian pharmacies being stripped of CBD products, and Irish authorities warning pharmacies not to stock them. The UK Food Standards Agency​ has previously suggested a crackdown may happen after the EU tightened its Novel Foods CBD definition in January.

Mark Tallon PhD, managing director at Legal Foods in the UK noted the category was “awash with illegal, high-dose and adulterated sources of CBD in the EU.”

“We still do not know the impact from chronic consumption of CBD and other cannabinoids,”​ he said.

Waiting game: Regulatory reform

EDEN CBD

Market analyst the Brightfield Group predicts “impending regulatory changes” ​will drive Europe’s CBD market (including e-cigarette fluids) from $318m (€285m) last year to $416m (€373m) in 2019, and surge 400% to $1.7bn (€1.5bn) by 2023. Analyst Cowen Inc projects the global market will be worth $16bn (€14.4bn) by 2025.

However, CBD supplements and cosmetics vendors at the expo told us regulatory reform was far from ‘impending’.

“It’s been going on like this for so long and we don’t expect it to change very fast,”​ said a spokesperson at CBD product maker, Eden Germany.

Dr Česen said it could take “a few years before new regulations are in place” ​and called for stricter safety and efficacy demands. “I assume not everyone would be able to meet those requirements.”

While not immunising them from the law, many CBD firms opted to sell their products exclusively online to avoid the potential calamity of a brickstore shelf stripping and other penalties that may go with it.

Others at the expo like Mehmet Yildirim from supplement and oils maker, NarcosEurope, voiced concern about increasing interest from the pharma sector.

“We are worried about the pharma industry,”​ he said. “They want to control everything and they want to make synthetic CBD under licence just for profit.”

Pushing for change

Moving from the expo to a recent CBD regulatory seminar organised by consultancy and CRO analyze&realize in Berlin, Dr Bernhard Beitzke from the European Industrial Hemp Association (EIHA) told us his group was pushing hard for change on multiple fronts.

The EIHA argues multiple CBD forms have documented evidence of an 80-year+ history-of-use as tinctures and extracts in the EU and therefore do not deserve their current Novel Food status.

Dr Beitzke said the German-based group remains in talks with the EC and Novel Foods Working Group about that and rested “hopeful of a political solution.”

Bulgarians reverse CBD product approval

Dr Beitzke also said he had learnt a provisional CBD-containing food supplement approval by Bulgarian authorities last month is being rescinded.

While clinical data backing CBD health benefits is sparse, the analyze&realize seminar was told there are 89 trials running around the world, and 191 completed.

The herb has been linked to improvements in eczema, arthritis, pain relief, relaxation, sleep, headache and wellbeing.

CBD is a non-psychoactive component of the cannabis plant. In industrial hemp growing, the psychoactive component, THC, is reduced to negligent levels of usually less than 0.2% in the European Union.

Under EU Novel Foods laws any food or ingredient that was not in widespread use within European Member States prior to 1997 must apply to the EU to be admitted to the food supply by proving that the substance is safe and/or has a history of consumption.

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