The hemp sector in Germany has been left in a bind after the country’s federal government recently confirmed that cannabidiol (CBD) is to be classified as a novel food. Entities interested in selling CBD products will have to apply for marketing authorization before sending their products into the market, a tedious and expensive process.
A novel food is a type of food that doesn’t have much history of consumption or is produced through previously unused methods. European Union (EU) regulations state that “any food that was not consumed significantly before March 1997 is considered a novel food. The category covers new foods, food from new sources, new substances used in the food and new ways, as well as technologies for producing food.”
The move comes after the EU added CBD to its Novel Food Catalogue in January, effectively forbidding the marketing and sale of CBD products without a permit in the EU. It follows guidance from the Federal Office of Consumer Protection and Food Safety stating that it is not aware of any case where CBD could be marketed legally in foodstuffs. In its official reply, the government added that previous European Commission (EC) guidance, which states that products containing certain hemp plants may not be considered as novel foods, is incorrect.
Luca Bucchini, Managing Director of food regulation specialists Hylobates Consulting explains further, “The significance of the ruling, beyond the technical legal arguments made under German law, is that it reaffirms that CBD hemp flowering bud extracts (as well as ‘CBD crystals’), when marketed as food or food supplements as in this case, are unauthorized novel foods.”
He adds that Dusseldorf’s Administrative Court rejected the argument that hemp in itself may not be novel, as the novel food regulation applied to the manufactured food product, even if the source itself is not novel.
He says that the addition of hemp extracts to the novel food category has “caused much upset and discussion in the industry, as it appeared to contradict a previous EC position.” Bucchini, an expert in food and supplement law, says that the ruling in itself is not surprising. “It is a rather plain and largely consensual reading of current EU law. What is important is that the reading is reaffirmed.”
All foods and food supplements on the Novel Food Catalogue require pre-marketing authorization to be sold on the market. Authorization could take more than two years, and it costs €300,000 ($332,211) per product, and this might potentially lock out the small and medium enterprises that comprise the EU market.
Experts believe that CBD industry players in North America, such as ChineseInvestors.com Inc. (OTCQB: CIIX) and Organigram Holdings Inc. (TSX: OGI) (NASDAQ: OGI), are hoping that the FDA doesn’t formulate prohibitive CBD regulations like those in the EU.
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