Misinformation, regulation and pharma in the CBD sector

Misinformation presents an existential threat to the CBD industry and companies should support common-sense regulation, industry organisations and advances in cannabinoid pharmacology to counter it, according to industry experts in the EU.

Issues such as health claims – both those put forward by the industry and those placed upon it by consumers – can lead to significant problems for the sector, according to Joscha Krauss, CEO of Medical Hemp, a company that specialises in the extraction of cannabidiol as well as the development, production and global marketing of products containing cannabidiol. For example, his company was recently approached by a family that read online about how CBD could cure their son’s lung cancer.

Misinformation such as this can be very damaging on a personal level to the health of the people involved, the mentality of the wider population and the industry as a whole.

“Unfortunately many vultures take advantage of [the grief of families like this] to push their products as miracle cures. This damages the industry and can set it back many years,” Krauss said.

And scrutiny of issues such as this will only increase as awareness of CBD rises among the general population. So far enforcement in the EU has been limited – though reporting of illegal marketing of CBD has dramatically increased, according to Dr Thierry Kern, regulatory affairs specialist at PenTec Consulting, a specialist consultancy that advises companies on the regulatory requirements for the food and animal feed industry in Europe.

A number of reports have been recorded via the EU Rapid Alerts System since 2018, he said.

 

Regulator scrutiny leading to tighter controls

 

“The downside of the growing interest for CBD is that it generates greater scrutiny from regulatory authorities, leading to enforcement measures and imposition of tighter controls,” Kern added. “If companies want to make health claims about the benefits of CBD then a health claim approval is also required, and it is important to note that health claims are notoriously difficult to obtain in the EU.”

The involvement of the pharmaceutical industry, coupled with better regulation, may actually prove to be a boon to the industry with regards to health misinformation. The pharmaceutical cannabinoid market is already a growing sector itself and will continue to play a major role in the industry going forward, both experts agreed.

It is proving to be a benefit as perceptions of cannabis as a harmful intoxicant are changing and countries are rapidly adapting regulations to accommodate new medical uses as a result. Research conducted by pharmaceutical CBD players could also lead to justified health claims for CBD-containing products. CBD companies should think more about this potential as well as launching pure medical products themselves, according to Kern.

“Significant long-term pre- and post-approval investment of capital and resources are needed to achieve approval for a veterinary or human medicinal product. The advantage is that approval for a medicinal product allows excellent intellectual property protection,” Kern said. “Suitable commercial partners are likely to be large pharmaceutical players. However, most have a low appetite for risk and sometimes a slow decision-making process.”

Greater certainty from regulators could also eliminate some players that entered the market solely because of high CBD prices, said Krauss. Products advertised as containing CBD that actually contain little or no CBD may currently be found on the market. Better regulation and enforcement from agencies such as the European Food Safety Authority (EFSA) would provide more certainty to consumers in areas such as quality and safety, Kern agreed.

 

More balanced regulation needed

 

“We appreciate the introduction of regulation to curb these exploitative behaviours,” said Krauss. “Nonetheless, regulation is only as constructive as the room it gives for an industry to grow safely.”

It is important to draw the right line so that industry development is not hindered and a black market – rich in the same bad characters – does not grow to meet an unanswered demand, he added.

“It is a fine balance between consumer desires and protections, and companies’ quality-driven and profit-based provision. Unfortunately, we know of respectable companies who, following all the regulatory conditionings imposed by national and EU authorities, still see their products held due to suddenly implemented obstacles,” said Krauss.

For example, novel food guidance limiting the use of CBD in foods and cosmetic guidance only permitting synthetic CBD in products are both examples of regulations that run the risk of damaging the industry, he added. Companies should look to industry organisations to unify efforts around regulatory lobbying.

“Due to the multi-faceted difficulties that the industry faces, we would recommend to join together under an umbrella institution so each contribution to solving the many problems – such as regulation, misinformation, over-production – are channelled in a single agglomerated and therefore stronger strategy,” Krauss said.

– Freddie Dawson CBD-Intel staff

CBD-Intel does not provide legal, strategic or investment advice. Tamarind Media Limited, the publisher of CBD-Intel, does not accept any liability or responsibility for information or views published.

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