Aiming to help set CBD framework, UK group focuses first on THC limits

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[This is the fourth in a series of stories looking at the CBD certification process in the UK]

Recommendations from the UK’s Advisory Council on the Misuse of Drugs (ACMD) for maximum allowable THC levels in CBD products are much too low and could be calamitous for domestic producers, a Parliamentary group has suggested.

ACMD last December issued guidance suggesting a THC limit of 50 micrograms (mcg) per serving – a highly restrictive level that disincentivizes production, according to the All-Party Parliamentary Group (APPG) of lawmakers and stakeholders advising on the UK framework for CBD.

Establishing a clear level for THC is critical to CBD stakeholders, who have nearly 6,000 products now going through the approval process under the UK’s rules for new or “novel” foods. As that process continues under the Food Standards Agency (FSA), CBD makers eventually need to know what level is acceptable, and develop formulas that meet that limit.

Setting proper terms

The CBD APPG has indicated that a counter-recommendation on the THC limit will come after deliberations expected to clear up confusing nomenclature, a key first step in the process of establishing the CBD framework.

The UK’s Cannabis Industry Council (CIC) – a party to the APPG – in a paper earlier this year said it is critical that common terms are established. “‘Single serving’ needs to be defined for each product, is open to wide interpretation and introduces unnecessary complexity for the consumer,” the Council said.

Also in this series:
Part I: CBD makers push back against UK novel food review that critics say is flawed
Part II: Clear leaders emerge from crowd chasing UK’s highly prized CBD jackpot
Part III: Number of CBD products with preliminary approval in UK balloons to nearly 6,000

APPG advisory board member the European Industrial Hemp Association (EIHA), meanwhile, suggested in a February paper that “ACMD’s recommendation of a ‘serving-based’ approach to controlled cannabinoids should be revised towards a “daily intake orientation.”

EIHA recommended a 2.5mg (2500mcg) single-dose equivalent it says would result in a daily average of 490mcg “for an average adult of 70 kg.” That level would be half the daily THC intake permitted in Canada, roughly the same as Australia and New Zealand, and in line with limits in Switzerland and Croatia, the Association noted.

Critical factor

“We explicitly welcome the novel food initiative and are now actively organized to contribute promptly and effectively to the series of important steps stretching out ahead,” Nicholas Morland, CEO at London-based Tenacious Labs, a private CBD company that serves as the secretariat of the CBD APPG, wrote in an April 26 letter to MPs Crispin Blunt and Zahida Manzoor, who are leading the APPG process in Parliament.

But Morland has warned separately that the ACMD’s recommended strict 50mcg limit on THC, if ultimately approved by the Home Office, would all but shut down domestic farmers and producers, eliminating the UK’s potential to cash in on demand for CBD that is growing worldwide.

‘No nothing’

“The issue is that the (50mcg) dose itself is so far outside the conventional range, there’s simply no point in any commercial business bothering . . . . It would mean that there are no jobs here, there’s no industry here, there’s no farming here, there’s no nothing,” Morland recently told the BusinessCann website.

Morland nonetheless said the ACMD THC recommendation – which he referred to as an “unintended consequence” of that body’s policy work so far – has been good in that it has drawn the industry’s attention. With the issue now in focus, “people can actually go out and legislate for it and we can put a process in place,” Morland said.

Chance for change

“The recognition that legislation and regulation is both a necessity and an essential foundation to long term premiumization is well understood, as are both the need for and benefits of getting the process right over time,” Morland said in the letter to Parliament, which suggested the CBD APPG be directed to draft proposals for legislation to guide the sector, an opportunity to address the THC issue and otherwise set a clear path for CBD products in the UK.

In addition to setting definitions and a THC limit, the framework should bring clarity regarding CBD in the context of the Proceeds of Crime Act, and specifically address consumer protection, quality standards, research and development, banking, agriculture, and insurance, and include guidelines for companies listed on the London Stock Exchange, Morland wrote.

Support for a rational CBD framework is strong, Morland said.

“The response across the board in all jurisdictions from the civil servants, politicians, businesses, trade bodies, etc. has been, and continues to be, universally positive, constructive, professional, responsive and sensible,” he wrote.

“We would be aiming for a first draft of the new legislation by the end of July (2022),” said Kyle Esplin of the Scottish Hemp Association, which is a member of the APPG. Esplin said he sees the chance for significant change now that the Parliamentary group, established last November, is engaged.

“This would also signal the start of reform in the entire cannabis space,” Esplin said.

Scotch whiskey model?

Morland said the UK could become a leading international player in CBD by following a model similar to that for Scotch Whisky, a product officially defined by the government which makes it unique in the premium spirits sector.

“If we want to own that premium discretionary space where the margin is long term, we need to have the same thing,” Morland told BusinessCann. “To achieve this, the industry would need to be ‘nationally directed,’ meaning no CBD which wasn’t grown from a nationally controlled seed and gene stock would be allowed to be classed as ‘British Isles CBD’.”

As Morland’s letter to Parliament suggests: “The Scottish Whisky industry is a commonly used benchmark – although Cannabis will be far bigger for the UK economy and British Isles, it’s a sensible starting point for the short and medium term.”

“That this self-evident positive also comes with £5.5bn (~€6.56 billion; ~$6.9 billion) of trade per year, much of it international exports, makes it more attractive still,” Morland wrote of the UK’s Scotch Whiskey industry. “Cannabis is similar but potentially bigger.”

About the APPG

The CBD APPG has 701 companies on its advisory board, which also includes representatives of trade bodies the Medical Cannabis Clinicians Society, the Cannabis Industry Council, the Cannabis Trades Association, the European Industrial Hemp Association, the Scottish Hemp Association, the British Hemp Alliance (BHA) and the Cannabis Services Advisory Board (Jersey).

Tenacious Labs, which has provided funding to support the APPG’s administration, was founded in early 2021. The company has adopted a “buy-and-build” strategy with a goal to establish an international giant in plant-based ingredients, including CBD and Psilocybin, according to its website. Tenacious so far has made two Colorado-based acquisitions, picking up female wellness brand Press Pause in April 2021, and contract CBD maker SZM Hemp the following month. The company currently has no products moving through the FSA’s novel foods approval regime.

Delarki, Tenacious’ parent company which is headed by Morland and Adrian Clarke, who also serves as COO in Tenacious, has committed £9.5m in funding to support acquisitions and operations, according to reports.

Morland is a chartered accountant with a background in private equity, commodities and finance, and experience in the London international insurance market. Clarke is an investor and entrepreneur who has worked in the food and beverage sectors.

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