UK CBD maker B3 Labs, which had more than 500 products awaiting safety approval by the Food Standards Agency (FSA), has succumbed to overall struggles in the sector, the company announced this week.
While many stakeholders have blamed regulations for the industry’s challenges, B3’s closure is the result of several factors – across-the-board price increases, supply chain risks and challenges at retail, CEO Mark Burbidge told NutraIngredients Europe.
Also contributing to the company’s failure were restrictions that inhibit innovation, according to Burbidge.
“People are only able to sell one isolate of a plant which has around 300 cannabinoids that all work in synergy, and any benefit the customer might have felt initially from that isolate they no longer get as they are building up a tolerance,” he said. “So now they’re looking into other ingredients to give them that same benefit.”
Other factors
Burbidge said FSA’s drastic reduction in the suggested total daily intake of CBD from 70mg per day to 10 mg per day, a guideline instituted last year, also hit the sector hard. B3 also recently lost a key client, according to Burbidge, exacerbating the company’s decline.
Burbidge said information on the formulations his company worked with are being passed to brand holders so their products can remain in the ongoing FSA safety review for CBD products, and that his company ramped up production before closing, to supply stocks to its customers.
FSA is in the midst of evaluating some 12,000 CBD products under rules for new or “novel” foods, but the process has been slow to unfold.
CBD extracts were designated novel food in the UK in January 2019 and all CBD food products must be approved before they can be sold legally. A wide range of such products have been on the gray market for several years, including drops, supplements and beverages.
According to its website, B3 Labs was producing CBD gummies, tinctures, isolate and distillate under white label agreements. It’s 525 products before the FSA put it within the top five manufacturers in the review by stock keeping unit count.
FSA review
To remain on the market pending final approval, products already in distribution had to have been on sale before Feb. 13, 2020, under FSA rules. Those introduced to the market after that date were not eligible for the agency’s consideration.
Of 12,000 products originally submitted to the FSA, roughly 8,072 are in the “validated” or first stage of the agency’s review while 6,000 have advanced to the second stage, in which they face risk management review. More than 3,000 products submitted by a consortium of the European Industrial Hemp Association were recently moved to that stage. Nearly 600 products have been eliminated from consideration and banned from the market.
FSA had said it expected the first CBD products to be fully authorized during the latter half of 2023, but the process has lagged well beyond that timeline.
